1、MEF MARKET REVIEW-MOBILE CONTENT AND ADSHistorical context,market data and future trends compiled by MEFs Content and Advertising programme C NTENTSEXECUTIVE SUMMARY.3INTRODUCTION.4THE MEF CONTENT AND ADVERTISING PROGRAMME.9PART 1:MOBILE CONTENT.11MARKET DYNAMICS DATA AND PROJECTIONS:THE APP BUSINES

2、S.12MARKET DYNAMICS DATA AND PROJECTIONS:THE MOBILE GAMING MARKET.16MOBILE CONTENT IN DEVELOPING MARKETS.21PAYING FOR MOBILE CONTENT:DIRECT CARRIER BILLING.22PART 2:MOBILE ADVERTISING.24MOBILE ADVERTISING.25MARKET DYNAMICS DATA AND PROJECTIONS:THE IN-APP AD BUSINESS.26MOBILE ADVERTISINGS 2021 RE-BOO

3、T NEW RULES FOR TRACKING AND MEASUREMENT.29AD FORMATS.30EMERGING MOBILE AD TRENDS.31CONCLUSION AND TAKE AWAYS.372Today,the MEF represents the interests of companies across the mobile value chain from payments to IoT.We are the Mobile Ecosystem Forum after all.But go back to our beginnings in 1999 an

4、d it was all about content.MEF launched as the Mobile Entertainment Forum with a mission to bring together the worlds of entertainment and telecoms.23 years on,that remains a priority.So whats changed?Well obviously the nature of mobile content itself.Weve moved on from the static personalisation pr

5、oducts of the early 2000s to a world of rich video,massively multiplayer games and streaming music.The delivery mechanism has also evolved;we now have app stores transacting billions of dollars every year.And then there is the payment rail/business model.The pioneering content publishers of 1999 had

6、 one option:take a cut of premium SMS revenues.Today,they can take a rev share from card and direct carrier billing transactions.Or they can fund by advertising.In fact,the ad ecosystem plays a central role in the ongoing progress of mobile content.Its now a vibrant and dynamic space.Its for these r

7、easons that content and advertising exist together as one of MEFs six ecosystem programmes.So what is the current state of content and advertising in 2022?How large are these markets?What form do they take?What are their key challenges and opportunities?In this market review,we will attempt to shed

8、light on these questions and provide you with a useful and convenient resource based on MEFs unparalleled 22 year experience and insight.Executive summaryDARIO BETTI,CEO,MEFMEF MARKET REVIEW-MOBILE CONTENT AND ADSBACK TO CONTENTS3INTRODUCTIONToday,the mobile medium pervades every walk of life.The sm

9、artphone is the place where we organise our diaries,read the news,watch movies,binge social media updates,listen to music and of course do our shopping.We take it for granted.But just 20 years ago none of this was possible.The mobile handset was purely a communications medium.Phone users just talked

10、 or to a lesser extent texted.So what happened?The ringtone happened.Ringtones were the first mobile consumables.They were not communication products.Instead,they were all about entertainment and personalisation.This changed the way people thought about the mobile phone.The arrival of the ringtone a

11、lso shook up the value chain around mobile.Ringtone providers were third parties.They existed outside of the incumbent ecosystem of carriers and their partners.They wanted to get paid.The payment medium that emerged was the reverse-billed premium SMS message.Here,the customer received a text that he

12、 or she paid for.The ringtone provider received a share of the revenue.Premium SMS was another industry innovation no one had thought of before.This is how the mobile content market sector was born.It comprised an entirely new value chain:content providers(publishers and developers),messaging interm

13、ediaries,payment specialists,localisation firms,optimisation specialists(who made sure products worked across all devices and OSs)and more.It was at this time that the MEF launched.Back then we were the Mobile Entertainment Forum.As the name implied our mission was to bring together the mobile and e

14、ntertainment industries,and help them grow this vibrant new space.This was an exciting historical moment.The major Hollywood studios,games publishers and global record labels were intrigued by the potential of this new medium.INTRODUCTIONA short history of mobile content and advertising5BACK TO CONT

15、ENTS“The arrival of the ringtone also shook up the value chain around mobile.Ringtone providers were third parties.They existed outside of the incumbent ecosystem of carriers and their partners.They wanted to get paidThis is how the mobile content market sector was born.”MEF MARKET REVIEW-MOBILE CON

16、TENT AND ADS6BACK TO CONTENTSThey all launched mobile divisions for the first time.Of course,the technology was limited.Phones couldnt support video.The premium network tech of the time was 2.5G(GPRS).For consumers,affordable always-on connectivity was a pipe dream.But necessity is the mother of inv

17、ention.Clever content providers invented products that made sense in a world of small(often mono)screens,numeric keypads and virtually non-existent data capability.They launched text based products(horoscopes,sports results,chat),personalisation services(wallpapers,screen savers)and rudimentary down

18、loadable games.The momentum was unstoppable.Consumers revealed an insatiable appetite for these new mobile consumables.But there were still major hurdles.Perhaps the biggest was distribution and discovery.Where could consumers go to find these exciting new products?There wasnt any single trusted des

19、tination.In the vacuum,a cohort of(mostly ringtone)companies went direct.They advertised their own subscription services heavily in print and TV.This resulted in some regrettable mis-selling scandals(which locked unwitting consumers into subscriptions).Meanwhile mobile operators launched their own c

20、ontent portals.Some,such as Verizons Get It Now and NTT DoCoMos i-mode,were successful.But they only succeeded by mandating that developers work to a rigid set of standards and that consumers choose from a small number of compatible devices.The handset companies,most notably Nokia,also tried many ti

21、mes to launch their own content services.None of these projects achieved long term momentum.Nothing really stuck until Apple and Google entered the mobile space.When Apple followed up the launch of iPhone in 2006 with the App Store in 2007,it defined the model for content distribution and set in mot

22、ion a new market that would generate hundreds of billions of dollars.Apple simplified the distribution of mobile content by creating a new format(the app)and offering developers a simple SDK they could use to make compatible products.Just as important,it gave customers a simple shop front accessible

23、 on any iOS device,and then simplified the billing process.Once the user had assigned a payment card,they could buy any app in a few clicks.No long forms to fill.Finally,Apple simplified the industry value chain.It assured the app maker of a 70 percent rev share on every purchase.Suddenly,for develo

24、pers,here was an opportunity to reach millions of users without the need to go through aggregators or payment intermediaries.Google followed the model a few months later with an app portal for its Android MEF MARKET REVIEW-MOBILE CONTENT AND ADS7BACK TO CONTENTSplatform.Together,the two stores unlea

25、shed an explosion of creativity and a commercial goldmine.In the next few years,the app economy evolved.Most significantly,app stores supported the introduction of a new model:freemium.This saw developers give away their apps.Some monetised via advertising.A vast new in-app ad sector emerged as a re

26、sult.It supported a complex ecosystem of companies offering localisation,measurement,tracking and more.The alternative freemium model relied on in-app payment.Here,developers would launch limited free versions of their products.Users would then pay to unlock bonus features,turn off ads or access pre

27、mium services.Another important innovation to hit app stores was direct carrier billing(DCB).After a few years of success,it became apparent that a significant cohort of smartphone users were unable or unwilling to use credit/debit cards.Many of these users were young,unbanked or in developing marke

28、ts.DCB was the obvious answer;it lets users pay from the phone bill.Both Apple and Google introduced the option to their customers.MEF MARKET REVIEW-MOBILE CONTENT AND ADS8BACK TO CONTENTSToday,while the app stores dominate the mobile content landscape,they are not the only show in town.In developin

29、g markets,there are still plenty of value added service(VAS)providers selling text-based products directly to enthusiastic mobile-first consumers.Sometimes they work with mobile operators.Many developing market MNOs have built content services that give customers(and developers)a convenient storefro

30、nt for mobile entertainment products.Meanwhile,in more mature regions,MNOs frequently team up with premium content specialists Netflix,Disney Plus,Spotify et al to create bolt-ons which they pre-load ion handsets as part of the monthly subscription.These bundles increase the MNOs average revenue per

31、 user(ARPU)while massively increasing the addressable audience of their partners.20 years on from the creation of the first mobile consumable,the mobile content and advertising space is flourishing.Its total worth is hundreds of billions of dollars and its still growing.In this yearbook,we will look

32、 more closely at the current status of mobile content and mobile advertising.We will outline:An overview of all the key MEF content and advertising programme activity Headline 2022 market data and projections Market structure and value chains The key challenges The key opportunities Speculation on f

33、uture trendsMEF MARKET REVIEW-MOBILE CONTENT AND ADSThe MEF was founded as the Mobile Entertainment Forum in 2001,so it has a strong heritage in media,content and advertising.Two decades on,the industry and MEF has evolved.But it still represents the interests of many members in the mobile value add

34、ed services space.MEFs Content and Advertising programme gives these members a forum through which they can promote the industry and launch initiatives to ensure consumer-facing products are safe and secure.This is encapsulated in the programmes mission statement.“To become the industry voice on how

35、 to better serve customers through personalisation whilst protecting consumer trust in the digital era.”THE MEF CONTENT AND ADVERTISING PROGRAMME9BACK TO CONTENTSThe MEF Content and Advertising programmes members are drawn from industry sectors including value added services,m-commerce,payment and a

36、dtech.They comprise:Aegis MobileAlchemy TelcoAWGBICSBTCheetah DigitalChina Mobile InternationalDexatel DireqtDotgoEmpelloEnabldEngage MobileGlobal Point ViewGlobe TeleservicesGMSGolden GooseimimobileInfobipIntis Telecom Kaleyra LANCK Telecom Mavenir Messente MCP InsightMobilesquared Morethan160Oored

37、oo GroupOut There Media PM Connect Sam Media TeleSignMEF MARKET REVIEW-MOBILE CONTENT AND ADS10BACK TO CONTENTSMeanwhile programme deliverables include:A monthly forum for the review and discussions of new industry trends impacting all stakeholders such as consumer behaviour,technology and media/con

38、tent Information resources for members Whitepaper/reports/infographics/webinars/videos/social media to educate the market and stakeholders.Published papers include:Mobile Metaverse Whitepaper and the Mobile Games Consumer Survey 2021 Creation of best practices for enhancing digital advertising and c

39、ustomer experiences across media platforms,protecting consumer trust and combating ad fraud Offering access to thought leader innovations around monetisation,personalisation,adoption,ad fraud and data privacy that are applicable across all regions.For example,in May 2022,Shiven Misra,Director IAB Te

40、ch Lab(APAC),spoke to the group about the IABs work on introducing technical standards for programmatic digital advertising Profile-raising opportunities for membersMEF members are at the forefront of developments in mobile content and advertising across all regions.They are developing innovative pr

41、oducts and services.Examples include:Sam Media has launched e-learning and VR products Cookies Digital launched Play&Play,an esport platform offering exclusive videos,playable tournaments and more.It hired former footballer Alessandro Del Piero to record a series of video interviews with esports inn

42、ovators,which it plans to sell to fans via MNO partnerships CIS-based Golden Goose developed an international mVAS(value added service)marketplace:the DCB HUB.It brings together 40 MNOs,advertisers and more than 50,000 publishers in a single marketplace.Golden Goose manages the direct carrier billin

43、g platform that links the various playersMEF MARKET REVIEW-MOBILE CONTENT AND ADSPART 1:MOBILE CONTENTMARKET DYNAMICS DATA AND PROJECTIONS THE APP BUSINESS12BACK TO CONTENTSIts difficult to define precisely mobile content.Perhaps we can start by asserting that it broadly relates to entertainment,inf

44、ormation and learning.This implies that we exclude any apps,sites or services that relate to commerce or business.We can also assume that mobile content is consumed on the handset.Though even this can introduce grey areas.For example,YouTube videos are certainly consumed on the phone,but not exclusi

45、vely.And they are not exactly made for mobile.Then there is the format.As we explained in the introduction,mobile content can be everything from a simple text service to a multi-player game to a hi-def streaming video.It can take the form of a downloadable app or a browsable web page.The nebulous na

46、ture of mobile content can make it hard to measure in value terms.That said,some elements of the market are very well monitored.The app business especially.So here is some headline data.The app business:consumer spendTotal spend in the two dominant app stores has been rising since they launched more

47、 than a decade ago.Despite regular predictions of app fatigue,the economy just keeps growing.In 2021,total outlay thats direct spend on premium app downloads,subscriptions or in-app purchases reached its highest ever total.Global spend across iOS and Google Play reached$170 billion in 2021,says data

48、.ai,up from$135 billion in 2020.Meanwhile Sensor Tower predicts App Store and Google Play revenue could reach$270 billion by 2025.In terms of spend,iOS dominates:65 cents in every app economy dollar is spent by Apple users.The vast app economy has yielded a number of unicorn products.According to da

49、ta.ai,233 apps have grossed$100m or more in annual consumer spend.Meanwhile 13 apps have grossed more than$1 billion.Total consumer app spend(projected)2021.$142 billion2022.$170 billion2023.$201 billion2024.$235 billion2025.$270 billionSource:Sensor TowerMEF MARKET REVIEW-MOBILE CONTENT AND ADS13BA

50、CK TO CONTENTSThe app business:downloadsFirst-time app installs set a new record in 2021 as the App Store and Google Play collectively reached nearly 140 billion downloads.The dynamics of downloads are the opposite of spend.Here,its Google Play that dominates.In 2021,Google Play accounted for more t

51、han 100 billion app downloads alone.The app business:time spentThe era of the family gathered around the TV is receding into the distance.Today,consumers are far more likely to be spending time in front of their phones.And the two year pandemic merely accelerated this trend.In 2021,according to data

52、.ai,the worlds consumers spent 3.8 trillion hours in mobile apps.Across the top 10 markets it tracks,the weighted average surpassed 4 hours 48 minutes.70 percent of this time was spent in social and photo/video apps.Global app downloads(projected)2020.143 billion2021.155 billion2022.171 billion2023.

53、188 billion2024.209 billion2025.230 billionSource:Sensor TowerMEF MARKET REVIEW-MOBILE CONTENT AND ADS14BACK TO CONTENTSThe app business:most popular categoriesGaming is the dominant force in apps.Games generated$116 billion of the$170 billion total in 2021.Thats 68 cents of every$1 spent in the app

54、 stores across iOS,Google Play and other Android stores combined.More than one third of the remaining spend came from entertainment and social apps.Google Play apps by categoryCategory Percentage of all appsGames.13.44%Education.9.43%Business.6.91%Tools.5.98%Entertainment.5.86%Music&Audio.5.50%Lifes

55、tyle.5.38%Books.4.36%Personalisation.4.12%Shopping.3.65%Food&Drink.3.61%Productivity.3.54%Health&Fitness.3.53%Travel&Local.3.13%Finance.3.0%Communication.2.08%Apple App apps by categoryCategory Percentage of all appsGames.21.86%Business.10.11%Education.8.68%Lifestyle.8.62%Tools.6.12%Entertainment.5.

56、79%Travel&Local.3.80%Food&Drink.3.57%Health&Fitness.3.41%Productivity.3.08%Finance.2.45%Shopping.2.42%Books.2.39%Music&Audio.2.32%Social.2.28%Photo&Video.2.06%Source:PocketgamerMEF MARKET REVIEW-MOBILE CONTENT AND ADS15BACK TO CONTENTSThe app business:volume of products Competition is fierce in the

57、app business with millions of products competing for consumer attention.Publishers released two million new apps in 2021.This brought the all-time total of apps and games released on iOS and Google Play to over 21 million.Its worth noting that the two format owners do occasionally cleanse their stor

58、es of dormant or unqualified products.This explains why the yearly totals sometimes fall.Number of apps in app stores(Q2 2022)Google Play.3.3mApple.2.1mAmazon.475,000Source:StatistaThe app business:free vs.paid appsThe freemium model dominates the app stores.Of course,many apps are utilities that ar

59、e not meant to be profitable in themselves.Still,many commercial products are now funded by adds or in-app purchases.This is especially the case for Android apps.Google PlayPricing%(total number)Paid.3.7%(99,000)Free.96.3%(2.57m)Source:AppBrainApple App StorePricingPercentagePaid.16%(812,000)Free.84

60、%(4m)Source:PocketGamerRevenue sources for app publishers Ads.63%In app purchases.18%Subscriptions.8%Installs.4%eCommerce.4%Affiliates.2%Source:AdColony(2020)MEF MARKET REVIEW-MOBILE CONTENT AND ADSMARKET DYNAMICS DATA AND PROJECTIONS THE MOBILE GAMING MARKET16BACK TO CONTENTSMobile games:market siz

61、eIn 1997,Nokia pre-loaded Snake onto its 6110 handset.The game became a global phenomenon.It also made people believe that the mobile phone could be a viable platform for gaming.Mobile proved to be much more than merely viable.Indeed,by 2017,mobile/handheld became the worlds biggest gaming format by

62、 revenue bigger than console or PC.According to market analyst Newzoo mobile gaming grossed$46.1 billion in 2017.This accounted for 32 percent of the$108.9 billion industry total.By contrast,the console market accounted for 31 percent.Five years on,mobile has more than doubled in size.The headline n

63、umbers for data.ais State of Mobile Gaming 2022 Report say consumer spend on mobile games reached$116 billion in 2021,with downloads at 82.98 billion.Mobile has also increased its lead in the overall gaming space.NewZoo(whose market estimates are a little lower than data.ais)estimates the shares as

64、follows:Games industry revenues by format:2022(projected)Mobile .$91.4 billion Console.$58.6 billion PC download.$38.7 billionTablet.$12.1 billionBrowser.$2.3 billionTotal.$203.1 billionSource:NewZooGaming and customer behaviourAs part of its commitment to understanding shifting consumer attitudes t

65、o mobile,the MEF conducts regular research.In our Mobile Games Consumer Survey 2021,we assessed the global landscape,how it compares to other categories,barriers to growth,and all with relevant case studies and regional spotlights.Headline findings include:68 percent of smartphone users globally hav

66、e played a game in the last 6 months Globally,gaming is more popular than listening to music or watching video content but in China,Spain,UK and Germany,listening to music is slightly more popular than playing gamesMEF MARKET REVIEW-MOBILE CONTENT AND ADS17BACK TO CONTENTS 59 percent of players are

67、frequent gamers.But in Japan 76 percent of those who have ever played a game are frequent gamers 22 percent of gamers feel satisfied with their current usage levels and would not want to spend more time,17 percent do not limit their usage at all Over a third of those who have played a game play once

68、 every six months or lessThe changing complexion of mobile gaming from ultracasual to coreWhat explains the extraordinary success of mobile gaming?The answer is obvious:reach.Mobile appeals to every demographic because the hardware is inexpensive,the user interface is uncomplicated and the games the

69、mselves are affordable if not free.Whats more,you can snack a mobile game anywhere and anytime.This accessibility led to the phenomenal popularity of so-called casual games such as Candy Crush.It generated$1.19 billion in 2020,and has more than 250 monthly active players.However,as handsets have imp

70、roved(in terms of screen resolution,size and processing power),the dynamics of mobile gaming have changed.As a result,there has been a boom at the two extremes of the market.On one side,hypercasual.On the other,core.The hypercasual gaming phenomenonAs stated,games like Candy Crush democratised gamin

71、g by dismantling some of the barriers that deterred players from console and PC.Hypercasual games go further.They remove almost all the friction.They have virtually no gameplay mechanics and are usually free.Popular games such as Bridge Race and High Heels can be played instantly.Theres nothing for

72、the player to learn.In 2021 gamers downloaded nearly 12.4bn hypercasual games.As an indication of how far they have come,in 2018 total downloads were 1.8bn.The core mobile gaming phenomenonIn parallel with the rise of hypercasual has been the ascendancy of its complete opposite:the core game.Titles

73、of this genre are graphically sophisticated,often multi-player and complex in their gameplay.They are frequently drawn from the categories of RPG,4X March-Battle(Strategy)and Team Battle.“What explains the extraordinary success of mobile gaming?The answer is obvious:reach.Mobile appeals to every dem

74、ographic because the hardware is inexpensive,the user interface is uncomplicated and the games themselves are affordable if not free.”MEF MARKET REVIEW-MOBILE CONTENT AND ADS18BACK TO CONTENTSUnsurprisingly,they earn the most revenue of all mobile games,with players happy to pay for premium in-app p

75、urchases that confer gameplay advantages.In 2021,4X March-Battle(Strategy)games grossed$9.7billion.Some titles have achieved extraordinary returns.Genshin Impact an Open World RPG has amassed 118 million downloads and$2.8 billion consumer spend to date.Meanwhile the world-building game Roblox now ha

76、s 48 million daily active users.Future trends in mobile gaming:metaverse,cloud,contextual adsMetaverse No topic is as hot as the Metaverse right now.Many insiders see this interactive 3D world(or worlds)as the future iteration of the internet.But for all the talk,the Metaverse remains a slippery con

77、cept to grasp.Its for these reasons that MEF published its own report in 2022 on the topic.The Mobile Metaverse Whitepaper provided:An insight into the origins of the Metaverse A deep dive into the various definitions How the Metaverse intersects with Web 3.0 and blockchain Examples of existing proj

78、ects from Meta,Roblox,Nvidia and more The technological advances that are making the Metaverse feasible How MEFs key areas of focus payments,identity,trust,communications apply in the MetaverseIn the report we proposed that we can think about the Metaverse as the next phase in a 30 year online story

79、.First there was web 1.0,which let users read and share(mostly)content via hyperlinks.Later,Web 2.0 added a social dimension in which people could create and share their own content.Now Web 3.0 offers the prospect of a decentralised web built on top of Blockchain MEF MARKET REVIEW-MOBILE CONTENT AND

80、 ADS19BACK TO CONTENTStechnology.It has the potential to let users roam 3D virtual worlds and to earn and create value.Still,there are so many unresolved questions:do you have to wear a headset to enter the Metaverse?Or can you simply scroll it on a phone screen?Do you need an avatar?Will there be o

81、ne Metaverse or hundreds?And if there are many,do they have to connect to each other?The jury is out on these questions.But one thing is for sure,at the early stage of the Metaverses development,the most popular expressions of the concept are games.Today,Minecraft,Fortnite and Roblox demonstrate man

82、y of the qualities we associate with the Metaverse concept persistence,avatars,mass participation etc.Are they true Metaverses?App industry analyst data.ai thinks so.It predicts that Metaverse-related app projects will generate$3.1 billion in consumer spending in 2022?Other influential figures see g

83、ames as early Metaverses.In a frank interview in 2021,John Carmack,the consulting CTO of Facebook-owned Oculus,said:“Minecraft and Fortnite are closer to the Metaverse than anything Facebook has built,or frankly,is likely to build,unless we wind up getting really lucky.”Minecraft,Fortnite and Roblox

84、 are already showing the industry what is possible in terms of mass simultaneous user participation.Roblox has also gone big on virtual events.In November 2020 a virtual gig by rapper Lil Nas X attracted 36.9 million visits.It also hosts brand partnerships such as the Vans World virtual skate park,w

85、hich drew 40 million visits in its first month.The Metaverse is also birthing a new kind of digital economy.Players on Roblox already make money from creating tools,characters and assets in these platforms.However,there are downsides to this embryonic new economy as evidenced by the controversy surr

86、ounding Axie Infinity.This metaverse game rewards players to play with unique blockchain-based tokens.It became hugely popular before a collapse in the value of these tokens in 2022 led many players to lose money.Cloud gamingThe digital era has seen content move from local to remote.Music is a good

87、example.Its form factor of music went from CD to downloads to streaming.The games“Minecraft,Fortnite and Roblox demonstrate many of the qualities we associate with the Metaverse concept persistence,avatars,mass participation etc.Are they true Metaverses?App industry analyst data.ai thinks so.It pred

88、icts that Metaverse-related app projects will generate$3.1 billion in consumer spending in 2022.”MEF MARKET REVIEW-MOBILE CONTENT AND ADS20BACK TO CONTENTSindustry,however,has resisted this transition.Even in 2022,most games still require some kind of local processing.The majority of people dont str

89、eam games like they stream Netflix.Why not?Technical reasons.Think about streaming video.Yes,video files are large and complex,but they are linear and the same for every recipient.Now compare gaming.Games streams are dynamic and every players experience is unique.And there are fewer economies of sca

90、le.The more people play,the more it costs.And yet,these hurdles are falling.The first cloud native games services are now live.They include major launches such as NVIDIA Game Stream and Google Stadia.NewZoo estimates there were 23.7 million paying cloud gamers in 2021.Meanwhile,some companies are fo

91、cusing their attention on the opportunity in developing markets,where many gamers lack the income to buy expensive console hardware.AWG,for example,is now offering a customized cloud gaming solution to telcos and ISPs in Latam and Africa.They are good reasons for these companies to persevere.Cloud g

92、aming removes many traditional barriers to entry.With processing done remotely,players dont need to buy powerful consoles or expensive software to get started.Money and geography matter far less.A new model for in-game ads:contextualThe huge popularity of mobile gaming has inevitably attracted adver

93、tisers to the space.Free ad-funded games now constitute a significant slice of the market.But there are problems.First,the most popular ad formats banners,interstitials etc support performance advertising.They exist to encourage players to do something.This precludes the kind of advertising that mer

94、ely wants to raise awareness.Also,many gamers find ads intrusive and annoying.And who wants to annoy their customers?This is why a cohort of specialists such as AdInMo are trying to establish a different format:contextual ads.The ads are highly visible and effective(in terms of recall).They are code

95、d organically into the game(for example,on the cars in a racing title)and they require no click.This makes them perfect for awareness-seeking brands.This is not a new idea.A decade ago,a handful of companies inserted contextual brand ads into console games.It didnt work.But now mobile gaming has rev

96、ived the concept.Mobile has vastly expanded the addressable audience while the smartphones always on connectivity gives brands the ability to inject dynamic and relevant ads that are personalised for every player.MEF MARKET REVIEW-MOBILE CONTENT AND ADS21BACK TO CONTENTSAcross more developed regions

97、,the mobile app has emerged as the dominant mobile content form factor.This makes sense in the context of blanket smartphone ownership and affordable data packages.But there remains a vast constituency of consumers all over the world that require a different channel for mobile content.In low income

98、countries,where feature phones and pre-pay contracts are still the norm,old-school models remain:text based infotainment services(news feeds,gossip and horoscopes etc)and personalisation products sold as one-offs or on-going subscriptions.Users pay for them via the phone bill or via proprietary mobi

99、le money platforms.Needless to say,this makes the content ecosystem fragmented.Content providers need to configure their products for a diverse handset market and to find channels through which to reach end users.In Africa,for example,specialists such as Sam Media,Basebone and Telecoming have built

100、their own entertainment portals which serve as storefronts for their products.But they frequently form partnerships with MNOs too.This makes sense carriers offer a logical destination for mobile subscribers.MNOs can also use their inherent advantages to reach consumers by sending them notifications(

101、via SMS)and by pre-loading content onto their own handsets.However,it would be a mistake to think that these markets support only basic content services.In fact,some of these providers have developed advanced and ambitious products.Its also true that,at the high end of the market,developing nations

102、are fostering their own mobile-first streaming services to rival Netflix et al.According to Digital TV Research,Africa had 4.89 million subscription video-on-demand users in 2021 and this could rise to 13.72 million by 2027.The opportunity lies with the ability to understand local tastes.Africa has

103、a vibrant market for domestic content product:Nollywood for example.Digital TV Research says local services such as Showmax and iROKO as well as those run by MNOs such as MTN and Etisalat are well-placed to license and even fund it.MOBILE CONTENT IN DEVELOPING MARKETS“In low income countries,where f

104、eature phones and pre-pay contracts are still the norm,old-school models remain:text based infotainment services(news feeds,gossip and horoscopes etc)and personalisation products sold as one-offs or on-going subscriptions.Users pay for them via the phone bill or via proprietary mobile money platform

105、s.”MEF MARKET REVIEW-MOBILE CONTENT AND ADS22BACK TO CONTENTSThe history of digital content shows the central importance of payment.No matter how compelling your mobile entertainment product,if customers cannot pay quickly and transparently,it will fail.As we explained in the introduction,the first

106、mobile content products were paid for using reverse-billed SMS.So,lets say the customer clicks to buy a ringtone.She receives a text message which she rather than the sender pays for.After this transaction is complete,the receives the ringtone.The premium reverse billed SMS was a clunky payment solu

107、tion.The process was not user friendly,and it couldnt be broken into small monetary amounts.It was also ill-suited to refunds and other customer service issues.Premium SMS gives way to DCBIn time,premium SMS was phased out.Instead intermediaries began connecting their processes to the operators bill

108、ing systems.This allowed merchants to move away from text as a payment instrument.Instead,they could place a pay by phone button on their apps and web sites.This process is called direct carrier billing.It remains an important component of the mobile content business all over the world.DCB has much

109、to recommend it.First,there is reach.There are an estimated 6.3bn mobile subscribers in the world,but 1.7bn adults remain unbanked.To make carrier billing transactions,a consumer only needs a mobile device and a SIM card.Then there is user experience.With DCB,consumers can make a payment in one or t

110、wo clicks.The system can verify the identity of the user and the status of their credit in the background.This simple checkout experience leads to lower abandonment and higher conversion rates.Finally,theres data safety.Theres no need to share personal data during the payment process.This is importa

111、nt in a time of rising privacy awareness.It PAYING FOR MOBILE CONTENTDIRECT CARRIER BILLING“Direct carrier billing has much to recommend it.First,there is reach.There are an estimated 6.3bn mobile subscribers in the world,but 1.7bn adults remain unbanked.To make carrier billing transactions,a consum

112、er only needs a mobile device and a SIM card.”MEF MARKET REVIEW-MOBILE CONTENT AND ADS23BACK TO CONTENTSalso reduces the risk of identity theft in comparison with credit card-based transactions.The barriers remainBut against this,there are obstacles.Carrier billing can be expensive for merchants up

113、to 50 percent rev share in some regions.Settlement can be slow with unclear guarantees.There is the issue of refunds and also regulation.In some regions,DCB is considered a form of lending which leads to tighter rules on what is permitted.In fact,these hurdles arguably held back DCB.For many years,t

114、he tech held promise but didnt really deliver on its potential.A change came with the when Google made DCB available in its Google Play app store in 2013.Apple did the same in 2015.Suddenly digital commerce was an option for millions of app store customers who either did not have a bank card or pref

115、erred not to use one.Streamers give DCB a boostAt around the same time,a new class of digital merchant entered the market:streaming services.Netflix,Spotify,Sony Playstation and others took advantage of 4G and flat rate data plans to sign up millions of customers.Though they grew fast,they came to r

116、ealise there were underbanked users they cannot reach.DCB unlocks these users.The other important factor is distribution.Mobile operators might not be able to offer the best payment terms,but they do have unrivalled access to billions of potential customers.In one bundling deal(adding a subscription

117、 to the cost of a monthly post-pay contract),they can instantly target a huge cohort.In 2019,Netflix Chief Product Officer Greg Peters said:“Mobile is a great place for folks to find out about Netflix,to sign up for the serviceIt works really well with our partners,because whether its handset partne

118、rs,which we can work to sort of preload our application on,or the mobile operators,which can bundle Netflix as part of their standard offering.”MEF MARKET REVIEW-MOBILE CONTENT AND ADSPART 2:MOBILE ADVERTISING25BACK TO CONTENTSPART 2:MOBILE ADVERTISINGWhen it became apparent that mobile content woul

119、d deliver a sustainable new market,it was inevitable that advertising would follow.Brands are obviously interested in consumer attention and all over the world consumers were switching their focus to mobile-based services.While its difficult to pinpoint the start of this process,one can note the lau

120、nch of AdMob in 2006 as a useful date.The startup made it easy for publishers to buy and host simple banners on their mobile sites.Today,AdMob is owned by Google and supports more than one million developers.Needless to say,the mobile ad business has moved on significantly from static banners.It now

121、 offers a huge variety of formats from hi res video to interactive mini games.Mobile advertising is everywhere.Indeed,it is now the largest component of overall digital advertising spend.According to Statista,global mobile advertising spending is projected to reach$327.1 billion in 2022.This figure

122、marked an increase of 17.2 percent compared to the previous year.It says spending will amount to nearly 399.6 billion by 2024.“Mobile advertising is everywhere.Indeed,it is now the largest component of overall digital advertising spend.According to Statista,global mobile advertising spending is proj

123、ected to reach$327.1 billion in 2022.This figure marked an increase of 17.2 percent compared to the previous year.”Mobile advertising spending worldwide from 2007 to 2024 2018.$176m2019.$212m2020.$271m2021.$279m2022.327mSource:StatistaMEF MARKET REVIEW-MOBILE CONTENT AND ADSMARKET DYNAMICS DATA AND

124、PROJECTIONS THE IN-APP AD BUSINESS26BACK TO CONTENTSThanks to the emergence of the freemium model,advertising is now the primary source of income for a huge number of mobile content makers.According to data.ais State of Mobile 2022 report,mobile ad spending reached$295 billion in 2021.Thats 23%year-

125、over-year growth.So how does this lucrative industry function?What is the nature of the ecosystem?On one level,in-app advertising is straightforward.A consumer uses an app,and sees an ad.If he or she takes an action as a result(clicking,watching a video,downloading,starting a subscription etc),the a

126、dvertiser pays the app developer.But behind this process is a complex web of activity.In-app advertising is largely automated.It is built on programmatic systems that use algorithms to buy and sell inventory in real time.Over time,more and more specialists have entered the market.These intermediarie

127、s exists to answer questions such as:Where are the ads placed in the app?What kind of ads are shown?What kind of actions should result in an advertiser making a payment?How much should the advertiser pay?MEF MARKET REVIEW-MOBILE CONTENT AND ADS27BACK TO CONTENTS What happens to make sure the right a

128、d appears at the right time for the right person?How should advertisers measure the performance of their ads?How can developers track and improve their revenues?How can developers improve engagement and retention(to ensure more eyeballs on ads)?Every intermediary in the value chain exists to make in

129、-app advertising more efficient or profitable.But they also add another layer of complexity and of course take their cut of the advertiser pay out.Heres a basic outline of the key links in the value chain.The advertiserA brand creates an in-app ad.It loads the ad to a demand-side platform(DSP),in wh

130、ich it defines its user targets and the price it is prepared to pay.The ad is then offered to app publishers via three channels.Individual publishers Ad networks(comprising a specific cohort of publishers)Ad exchanges(programmatic buying marketplaces based on auctions)The app publisher/developerApp

131、publishers and developers make their inventory available to advertisers via a supply-side platform(SSP).They set the price floor for ads,state the type of ad format supported,stipulate preferred advertisers etc.IntermediariesAs we described,there are a large number of intermediaries involved in the

132、in-app advertising business.They exist to make ads more appealing or trackable.Here is a summary.Targeting and re-targetingApp makers need to identify their users in order to give advertisers the ability to target them better.Historically,they used the unique device ID to do this.Armed with a person

133、s device ID,an advertiser can collect lots of data and then associate it with an individual customer.However,this method is vanishing(see box).“On one level,in-app advertising is straightforward.A consumer uses an app,and sees an ad.If he or she takes an action as a result clicking,watching a video,

134、downloading,starting a subscription etc the advertiser pays the app developer.But behind this process is a complex web of activity.”MEF MARKET REVIEW-MOBILE CONTENT AND ADS28BACK TO CONTENTSNow,app developers are investigating alternatives with the help of specialist intermediaries.One is fingerprin

135、ting.This method analyses a persons phone habits sites visited,browser type,OS,screen size,language preferences and so on to create a profile about them.However,this method has been attacked on data privacy grounds.Zero party data is another option.Here,the publisher asks a customer to share(via a s

136、urvey or similar)his or her preferences,purchase intentions,opinions and more.Finally,some app makers can ask users to log in.With registration in place,they can collect data on users because they have actively opted-in.App performance/monetisation analyticsDevelopers always want to improve the expe

137、rience for users and in so doing deliver better results for advertisers.A range of companies offer SDKs that let developers track user journeys so they can see how users are interacting with an app.These metrics will can also reveal the revenue publishers make from ads,in-app purchases,subscriptions

138、 etc.They include:Average revenue per user Purchases Time to first purchase Lifetime value per user Conversion rate(%of total customers who make a purchase)Cost per install App opens Registrations Shares Invites NotificationsHow can app developers keep their existing users engaged(and therefore see

139、more ads)?This is a critically important question given that most people only use a fraction of the apps they download.Some specialists offer messaging and notifications(via email,text and app push)that encourage dormant users back into the app.ReportingIf advertisers pay based on how many users hav

140、e taken an action,then they obviously need to know the metrics are correct.Specialists can answer questions such as:What percentage of ads are viewable?Which apps did the ad ran on?Was the ad unit displayed correctly?Was the ad placed next to problematic content?AttributionIn the case of app install

141、 advertising,an important question arises:how can the app developer be sure that the download was prompted by an ad?Specialist attribution companies can help.They analyse the data to decide whether a download came as a result of advertising or thanks to an organic source.MEF MARKET REVIEW-MOBILE CON

142、TENT AND ADS29BACK TO CONTENTS2021 was a challenging year for the mobile in-app advertising space.Why?Because of Apple decision to make it harder for brands to track and measure users of apps.It did so by making big changes to its Identifier for Advertisers.Heres some context:The IDFA is a unique id

143、entifier that lives inside iOS devices.When a mobile ad firm gains access to the IDFA,it can then track the users activity across other apps and sites.With this info,the firm can see how successful its clients campaigns are.It can personalise future ad campaigns to make them more successful.Obviousl

144、y,the IDFA sits at the heart of the in-app advertising space.However,in 2021 Apple made the IDFA opt-in only.It mandated that app developers must receive active consent from the user to use it.Analysts called the move an earthquake.Facebook/Meta estimated the move wiped$10 billion from its revenue i

145、n 2021.App makers are still digesting the consequences of this move.However,one clear implication has been to focus attention on first-party data,and on publishers that can collect this data reliably and at scale.Apple has also benefited.According to Omdia,its Search Ads business grew 264 percent in

146、 2021 to hit$3.5bn in revenue.MOBILE ADVERTISINGS 2021 RE-BOOT NEW RULES FOR TRACKING AND MEASUREMENTAd payment modelsAdvertisers pay out on the number of clicks.But over time,this model has evolved to become a little more sophisticated.Options now include:CPC:Cost per click:a set amount for every c

147、lick.CPM:Cost per thousand impressions:a set amount for every thousand clicks.CPA:Cost Per Action.Here,advertisers pay only for those clicks that lead to visitors performing specific actions as a result the purchase of a product,an impression,a download,sign-up,etc.MEF MARKET REVIEW-MOBILE CONTENT A

148、ND ADS30BACK TO CONTENTSIn the formative years of mobile advertising,a static banner ad was pretty much the only option.Now,with improved handsets and cheap data,developers can choose from an array of richer alternatives.Here are the main formats.Banner adA static ad usually located at the top or bo

149、ttom of the screen.Expandable adStarts as a banner and increases in size when the user clicks or even scrolls across it.Pop-ups/Pop-undersPop ups take over the entire screen often with little warning.Pop-unders are a little more discreet.They appear behind the main contents of the screen.Playable ad

150、sInteractive ads that function like mini-games.High engagement but expensive to produce.InterstitialsThese ads cover the entire mobile screen and usually appear at moments where there is a natural break.Video adsAs handsets,batteries and connectivity have improved,video ads have become more viable.T

151、here are two key types.In-stream video runs on the devices native video player.Out-stream ads play inside a regular static ad.Rewarded adsRewarded ads give users something in return for clicking a banner or watching a video.The reward can be something from real-life,or it can be something that appli

152、es to the app itself,such as access to extra levels.Native adsThese ads look like part of the app the digital equivalent of newspaper advertorials.Rich media adsThese ads let the user interact:shaking the phone to make something happen;rubbing the screen to reveal something etc.App install advertisi

153、ngIn a market of millions of apps,how can any product stand out?Theres only one credible answer:advertise it.AD FORMATSMEF MARKET REVIEW-MOBILE CONTENT AND ADS31BACK TO CONTENTSApp install advertising In the early 2010s the app economy exploded.Suddenly,there were tens of thousands of app developers

154、 flooding into the space.How could they get attention for their products?Inevitably,by paying for it.In quick time,app install advertising became a thing.Facebook was the main beneficiary.In 2012.it saw that its users were going mobile so it launched ads that would link(via a click)directly to the d

155、ownload page of the relevant app store.Within a couple of years,the new ad format was helping Facebook to earn$1.37 billion a year from mobile advertising.Today,there is a huge market for app install advertising.And its growing fast.According to research by AppsFlyer,65 per cent of installs for smal

156、l apps in 2019 were non-organic.It says app install ad spend could hit$118 billion in 2022.Location-based mobile advertisingIn a world of growing restrictions on individual user targeting,location-based advertising offers a compelling solution.Its also unique to mobile(as opposed to desktop online a

157、dvertising where the user is typically static).Geolocation lets a brand know where its customer is now,and supports the delivery of contextually relevant advertising and content.The received wisdom around location-based advertising is it requires a user to turn on GPS and then give consent.This is c

158、ertainly one possibility.Another requires the addition of a cookie.But,as we have discussed,this option is falling out of favour.IP geolocation is an intriguing technology.This uses the phones IP address as the basis for determining its location.It can target users down to postcode level,and is also

159、 entirely anonymous.IP geolocation can also determine connection speed,device type and whether a user is on 4G,5G or wi-fi.All of these extra attributes can help brands to personalise goods and services.MNO ad playsIts hard to think of an industry cohort that has better data on consumers that MNOs.F

160、or this reason,the worlds operators have periodically launched into the ad space EMERGING MOBILE AD TRENDS“In a world of growing restrictions on individual user targeting,location-based advertising offers a compelling solution.Geolocation lets a brand know where its customer is now,and supports the

161、delivery of contextually relevant advertising and content.”MEF MARKET REVIEW-MOBILE CONTENT AND ADS32BACK TO CONTENTSoffering exchanges that give brands the ability to target users by demographics,behaviour and location.But there are major hurdles not least privacy concerns.For this reason,many of t

162、hese projects have failed.In the UK,there was the of Weve by three large MNOs.It launched with great fanfare in 2012,but didnt last.Still,the advantages remain and the launches keep coming.In 2022,for example,T-Mobile US created T-Mobile Advertising Solutions to let marketers track,segment and targe

163、t T-Mobile Android subscribers.The platform tracks customers engagement patterns,including apps they open,the wifi networks they join and the websites they visit.Conversational commerce and message-based advertisingCan rich messaging platforms such as RCS,WhatsApp and Apple Business Chat rival the m

164、obile app?Many believe so.They argue that rich messaging can deliver all the compelling features of an app video,carousels,maps etc but without requiring the consumer to download anything.If rich messaging does deliver on its promise,can it revolutionise mobile advertising?Insiders are already exper

165、imenting.They say there is great potential in brands making rich messaging campaigns that become the start point for customer conversations.And those conversations can end up with the customer buying something.They call this invitational advertising.Specialist LivePerson has revealed research that c

166、laimed 85 percent of people say they want the option to message with brands.Meanwhile Vodafone has run a number of RCS campaigns of this type,reporting that its McDonalds South Africa promotion generated a three per cent redemption rate.MEF MARKET REVIEW-MOBILE CONTENT AND ADS33BACK TO CONTENTSMobil

167、e advertising value chainAdvertisers/agenciesThis cohort comprises brands and traditional of mobile-focused ad agencies.Demand side platformsSoftware platforms through which brands and agencies can offer their ads and manage their campaigns.Ad networksThese companies exclusively manage the inventory

168、 of selected app publishers and developers.Ad exchanges These companies run programmatic public exchanges that link together advertisers and app publishers.Supply side platformsSoftware platforms through which app publishers can offer and track their inventory.App publishers and developersSince most

169、 apps are free,most app makers are in the market for in-app advertising.App performance analyticsThese companies help app publishers track download numbers,revenue and more.App attribution analyticsThese companies help app publishers understand what prompted users to download or take other actions.U

170、ser acquisition,engagement and retention analyticsThese companies help app publishers track user behaviour patterns including session times,churn and more.They also provide tools for increasing engagement with the app.Market intelligence/MeasurementThese companies help publishers understand the wide

171、r market and benchmark their apps performance against similar products.App storesThe destinations where consumers buy or download apps.MEF MARKET REVIEW-MOBILE CONTENT AND ADS34BACK TO CONTENTSFrom creation to click:the mobile advertising value chainThe advertiserUser/ConsumerDemand-side platform(DS

172、P)Supply-side platform(SSP)App DevelopersAd networksPublishersAd exchangesTargeting and re-targetingApp performance Monetisation analyticsNotificationsReportingAttributionIntermediariesMEF MARKET REVIEW-MOBILE CONTENT AND ADS35BACK TO CONTENTSThe growing problem of ad fraudIn the formative days of m

173、obile content,fraudsters frequently duped unwitting customers into expensive subscriptions.When the industry defended against these scams,some fraudsters merely transferred their attention to the industrys new focus:in-ap mobile advertising.They devised ad-based scams in order to dupe consumers and

174、de-fraud advertisers.Alarmingly,some insiders say these scams can drive as many as 90 per cent of all app installs and traffic in some regions and niches.The most common types of fraud include:Unviewable adsHere the advertisement is loaded,but never displayed to the end userFraudulent traffic/impres

175、sion launderingAds appear on a site,which is not the one the advertiser paid forClick jackingMalware hijacks the ad slot on a website and displays an ad,generating revenue for the attacker rather than the publisherClick FloodingWhen a fraudster claims credit for an organic app installClick Injection

176、An app already on a phone knows when another app is being loaded and claims credit and payment for the downloadSDK Spoofing/attribution fraudA bot sits inside an app and generates ad clicks from inside itBot trafficBots rather than people click on ads and perform fake installs.Fraudsters make bots b

177、ehave like real users.MEF is,leading the fight against the fraudsters via schemes such as the Trust in Enterprise Messaging(TEM)programme and industry VAS Code of Conduct.MEF MARKET REVIEW-MOBILE CONTENT AND ADSCONCLUSION AND TAKE AWAYS 37BACK TO CONTENTSMore than two decades since the birth of the

178、mobile consumable market for ringtones and wallpapers,the mobile content space is flourishing.The sector pulls in hundreds of billions of dollars a year and its still growing.Todays content market embraces everything from text-based alerts to subscription-based streaming video.Its literally changed

179、the way people consume entertainment.And in so doing it has transformed adjacent industries.The mobile payment space created carrier billing to make it easier for consumers to check out their purchases.Meanwhile the advertising industry developed a radical new real-time programmatic process with mob

180、ile content in mind.The Mobile Ecosystem Forum has been at the heart of mobile content and advertising since our launch in 2001.In fact,we have evolved alongside this dynamic business.Today,we represent the interests of many members in what is often called the mobile value added services space.We do

181、 this via the MEF Content and Advertising programme.It provides a showcase for the industrys achievements and a forum through which to launch initiatives that protect consumer trust.If you are interested in joining the programme,please contact James Williams at .CONCLUSION AND TAKE AWAYS MEF MARKET

182、REVIEW-MOBILE CONTENT AND ADSMOBILEECOSYSTEMFORUM.COM 2022 Mobile Ecosystem Forum Ltd.All Rights Reserved.Disclaimer Mobile Ecosystem Forum makes no representation,warranty or undertaking with respect to and does not accept any responsibility for,and hereby disclaims liability for the accuracy or co

183、mpleteness or timeliness of the information contained in this report.The document was developed by MEF in collaboration with its members in full compliance with the programmes antitrust compliance policy.The information contained in this document may be subject to change.Please check for latest versions online.