America is a small part of mobile web traffic, but a big part of mobile ad spending
Living and and breathing ad-tech in America, you hold certain things as given. That is until you speak to people in the industry internationally and realize not everything is the same around the world. For example, iPhone users worldwide aren’t all affluent big-spenders and not all countries are app-hungry maniacs.
Released yesterday, a report by China’s largest mobile RTB network, AppFlood, looks at mobile advertising trends globally from the first quarter of 2014 on Android devices and puts some intriguing and probably needed context around the American mobile advertising market. It shows that while North America might take in the biggest share of ad dollars globally, it is an insular market built on a small fraction of total mobile traffic.
North America accounts for only 11 percent of mobile Web traffic, according to AppFlood. Exactly half of all traffic on the mobile Web internationally comes from Asia (leading, with 27 percent) and the Middle East. Smartphone use in the Middle East is exploding, with mobile ad spend increasing at an average of 62 percent every quarter in the past year.
But for how comparatively small North America's portion of global traffic is, the American market is outsized in terms of spending. Thirty percent of all mobile ad dollars are spent here. Mobile advertising dollars are generally sticking to the West, for now. Taken together, North America and Europe represent about 60 percent of mobile advertising spending, but just 30 percent of traffic. The balance of power is slowly shifting, however. Chinese ad spend grew 110 percent quarter-by-quarter over the last year, where North America only grew by 86 percent. The lag between traffic and spending was most pronounced in the Middle East.
Breaking down the discrepancies in spend and traffic, a quirky correlation in AppFlood’s report was in how active app use was by region; global ad spend corresponded closely with the share of app installs.
North Americans really do have a love affair with apps; almost a quarter of all downloads happen here. As I've reported here before, we're said to now spend 86 percent of the time we're online on our phones, inside apps. AppFlood found that our app install rate from ads seen was 7.72 percent, compared to just 2.83 percent across Asia.
AppFlood's report does however, damn the North American mobile advertising market as tremendously inward-focused: 62 percent of all North American mobile advertising dollars are spent in America. Chinese advertisers are spending less than a third of their advertising budgets inside Asia. Chinese companies are thinking globally, and they’re not prioritizing America either, putting more money in the Middle East, Latin America and Europe than they do North America. In emerging markets like Southeast Asia and the Middle East, Chinese advertisers are outspending American advertisers on mobile by more than two-to-one.
Going off these findings, American mobile traffic is easily the most valuable in the world: we love to download and we love to consume. For every one percent of global traffic, the region takes in three percent of global ad spend.
But the larger question is, why is the mobile Web a conversation we’re having largely with ourselves? It is a trend that risks leaving us outpaced and out of step as mobile devices reach saturation point in America, while the rest of the world catches up in penetration and infrastructure.
[illustration by Brad Jonas for Pando]