• by Jack Loechner , Staff Writer @mp_research, May 3, 2013

According to the recently released Mobile Advertising Marketplace Report from MoPub, showcasing 2013 Q1 trends in mobile advertising monetization and demand for smartphone ad inventory, the three core metrics used to track demand, eCPM, Clear Rate and Bid Depth were higher. Despite an extended down cycle, significant ad spend growth at the end of the quarter led to Q/Q growth.

In addition, the Executive Summary points out that:

• The CPM premium on impressions for iOS over Android, iPad over iPhone and iPhone over Android Smartphone increased from January to March to 39.4%, 32.0% and 76.0% respectively
• Monthly ad spend share on iPhone grew 12.4% over the quarter and now accounts for over 50% of ad spend on the exchange or more than two times the share of Android Smartphones
• Android tablets have failed to gain traction, accounting for less than 1.0% of ad spend
• Ad spend shifted to more engaging and interactive ad units as the CPM premium for impressions that support MRAID rich media increased 9.2% and their share of ad spend grew 15.7% to 79.1%
• Adoption of larger ad sizes grew exponentially as the CPM increased 161.8% and ad spend share increased 214.7% for 480X320 impressions; conversely small ad sizes like 320X50 experienced CPM and ad spend share declines
• Mobile media buyers opportunistically shifted ad spend in real time based on insights about user behavior during severe weather storms, holidays and live mass media events

This year, following an extended down cycle, came an unprecedented influx in ad spend at the end of Q1, which resulted in quarter over quarter growth (Q1 2013 over Q4 2012). Mobile media buyers took advantage of the seasonal down cycle in Q1 to make significant improvements to ad spend optimization and to refine opportunistic tactics. This allowed mobile to capture a larger share of ad spend, once it ramped up, creating a sudden and dramatic spike in ad spend in March, says the report.

Highlights from the 2013 Q1 Mobile Advertising Marketplace Report include:

The CPM premium on impressions for iOS over Android, iPad over iPhone and iPhone over Android Smartphone increased from January to March to 39.4%, 32.0% and 76.0% respectively. Monthly Ad spend share on iPhone grew 12.4% over the quarter and now accounts over 50% of ad spend on the exchange or more than two times the share of Android Smartphones. In Q1 2013, many ad buyers discovered the increase in user value on Android devices was offset by a poor conversion rate of users from these ads.

In February, Android captured monthly ad spend share from iOS; a month later ad spend for Android declined below the share it had in January. Traction was notably low for Android tablets, which had less than 1% of ad spend share. CTR remained flat and CPM declined for Android impressions.

All three iOS devices recouped their losses and exceeded January metrics in March. The unprecedented March ad spend growth, which carried Q1 after just a couple of weeks, was powered by both the addition of brand budgets, and the flight of ad spend back to higher priced and higher quality iOS inventory.

It is important to note, says the report, that Android tablets are not a part of this section because they account for less than 1% of ad spend. This means tablets trends are essentially limited to iPads. Impressions that support brand advertiser engagement needs and have proven effectiveness, retained higher demand at premium prices in Q1 2013.

Ad spend shifted to more engaging and interactive ad units as the CPM premium for impressions that supported MRAID rich media increased almost 9.2% and their share of ad spend grew 15.7% to 79.1%.

Adoption of larger ad sizes grew exponentially as the CPM increased 161.8% and ad spend share increased 214.7% for 480X320 impressions; conversely small ad sizes like 320X50 experienced CPM and ad spend share declines. Another factor driving the performance of the 480X320, opines the report, was that many game developers discovered that turn based game dynamics provided an experience that aligned with larger sized interstitial ad formats. As these games achieved significant penetration and usage, the trend exceeded the impact that an image size alone could generate.

The Mobile Advertising Marketplace Report provides market data from real-time bidding auctions for mobile ad impressions, aggregated from smartphone applications, advertisers and demand side platforms on MoPub Marketplace. The data is representative of 45 billion monthly ad impressions across two dozen verticals.

For additional information, please visit MoPub here; or, access the PDF file here.