Smaato urges developers to adopt multiple ad networks as mobile fillrates drop 3%

For the second quarter in a row, Smaato's mobile metrics report has detailed a disconnect between the continued expansion of the mobile market, and the amount advertisers are willing to spend on tapping up its userbase.

More and more consumers have a handset in their pockets, the ad specialist concludes, but budgets for mobile ad campaigns are yet to catch up.

The end result is a continued decline in average fillrates worldwide, falling by 2 percent sequentially and 3 percent year-on-year to 18 percent in Q2 2011.

Pushing polygamy

"Although current economic conditions are a factor, the continued quarter-on-quarter decline in fillrates is an indicator that the market is not only becoming increasingly fragmented, but also under threat of commoditisation as inventory increases at a faster rate than budgets," said co-founder and CMO Harald Neidhardt.

"While we will absolutely see more ad dollars coming to mobile and the average campaign size increase, this will be across a much wider range of inventory, which will in turn drive costs down."

Based on the numbers sourced from over 80 billion ad requests on 60 connected ad networks during the quarter Neidhardt has one conclusion: publishers and developers looking to keep fillrates up will need to sign up to multiple ad networks.

It's an expansion of the advice given in Q1 2011, when Smaato concluded the process of monetising mobile ads was becoming "increasingly more fragmented".

Platform power

"Longer term, fillrates are likely to be even more difficult to achieve as ad networks and Demand Side Platforms continue to be more selective in the inventory they leverage," added Neidhardt.

"Publishers and developers will need to be more strategic in how they monetise their inventory and consider enlisting multiple ad networks to achieve past fill rates."

Outside of the ad networks themselves (which individually range from fillrates of 58 percent to a paltry 3 percent), the performance of operating systems also fluctuates.

For the second quarter running, Windows Phone is the best performing platform for ads on Smaato's network, ahead of Symbian and RIM.

Meanwhile, bigger players such as iOS and Android continue to lag behind though Neidhardt speculates the falling price of Android devices will boost its performance significantly in the quarters to come.

"Soon we will see Android devices retailing under $100," he concluded.

"Plus there are a number of Android powered Asian tablets on the horizon, which will further accelerate Android market penetration.

"As this trend continues, we will see even greater demand from big brands and advertisers for the Android platform, and therefore greater revenue opportunities for publishers and developers as Android continues to proliferate."

Low fill fall out

Smaato's continued tracking of declining fillrates is made even more relevant by Flurry's assessment that it's the one element holding mobile ad spend back.

Flurry recently concluded mobile in-app advertising inventory in the US could surpass the $12 billion-odd online display advertising market in the country by November 2011 if only every mobile ad available was actually filled.

In reality, estimates range somewhat below than benchmark $12 billion figure. Gartner conclues the ad market in the US in 2011 will hit $700 million, while eMarketer aims higher at $1.1 billion.

[source: Smaato]