Increasing ad costs reveal marketers growing interest in Android: report
By Rakin Azfar
October 12, 2016
The Android platform has been closing the gap with iOS in ad spending
Cost per thousand impressions for ads on the Android platform has shown steady growth year over year before booming 112 percent this past year, indicative of growing interest in the platform, according to a new report from Fiksu DSP.
The report quantifies interest in Android through the price of ad costs, determined by competition within the mobile advertising market. With iOS ad prices also remaining competitive, the report shows that not only are specific platforms experiencing ad growth, but the mobile platform as a whole is, as well.
We may see metrics like CPM and CPP respond negatively to the Note 7 developments, but if that occurs it will likely be merely a blip on the radar, and Android will continue its growth, said Tom Cummings, vice president of new market development at Fiksu DSP
With so many Android compatible smartphones on the international market, were likely to continue to see marketers look at Android as a competitive platform for advertising. A Pew report from earlier this year noted the rapid increase in smartphone usage, much of which is Android supported.
In emerging markets (where Android is king) monetization is lower than developed countries, but so are user acquisition costs, which reflects the market they're in. Again, as the Google Play store and the user base matures, Android will increasingly be viewed as the place to be alongside iOS for marketers.
Shifts in platform
The report, based on the Fiksu DSP Indexes launched last week, measures cost per thousand impressions and cost per purchaser across a wide cross section of mobile traffic data.
The data produces a compelling image of an advertising market in upheaval, open to those who have the wherewithal to take advantage. Android seems to be closing the marketing gap on iOS, which was at one point unequivocally considered the gold standard of advertising platforms on mobile.
While competition for ads on Android was relatively flat from August to September, cost per thousand impressions more than doubled in the past year. The same claim holds water when looking at Androids cost per purchaser, which was down 14 percent since August but still managed a 59 percent increase year-over-year despite this.
Android's cost per thousand impressions vs. iOS
Android even managed to overtake iOS on both metrics over the past year, albeit momentarily: Androids cost per thousand impressions was higher than iOS in March and April of this year, while its cost per purchaser was higher than iOS during a brief period beginning in July.
The report engages in some analysis about the prospects that this data has for marketers, asserting that as marketers find more effective, profitable ways to capitalize on the Android platform, they are beginning to pay more per user. However, until Android can permeate the market in the same way iOS currently does, it will remain a solid option for marketers looking for lower cost advertising solutions.
Android's cost per purchaser vs. iOS
Competition and growth
Since the iOS ad market is invariably stable with the strong performance of the iPhone 6 and 6S buoying consistent ad growth and remaining so without the expense of the Android ad market, it may be inappropriate to position the two as in competition with each other. The more salient distinction would be to look at the mobile industry as a whole in competition with other ad platforms, a competition in which mobile is clearly gaining ground.
While the mobile sector is surging, it isnt necessarily diversifying: Android and iOS effectively have a duopoly on the platform. Last month, Blackberry announced it would halt all production of hardware after its operations had atrophied following the release of the iPhone (see story
And brands have been scrambling to compete for space on the iPhone 7s expanded storage and high quality cameras, meaning that competition for ad revenue will also be heated (see story
The main takeaway from this report is that maturity is impacting both the Android and iOS platforms, but in different ways, said Mr. Cummings.
As Android users become more savvy, the hardware improves and the Google Play store matures, marketers are becoming increasingly willing to devote a greater portion of their budget to it. Meanwhile, since iOS is more developed it now remains stable, so marketers can be more confident about what kinds of returns they'll get on their ad spend: outsized returns for advertisers are therefore more likely to be found on Android than iOS.