Opera Mediaworks State of Mobile Advertising Q1 2013

In addition to providing our regular quarterly insights into mobile ad traf!c and monetization by device, geography and publisher category, this edition of the State of Mobile Advertising report will highlight three important drivers of the mobile advertising market.

The tight competition between iPhone and Android

The continued growth of international mobile ad markets

The importance of “intelligent prioritization” for advertisersto reach their desired audience

Advertisers include …

Insights from Opera Mediaworks The world's leading mobile ad platform

1

Publishers include …

sites & applications

12,000 + 50 BILLION +ad impressions per month

300 MILLIONglobal consumers reached

The State of Mobile Advertising | Q1 2013

© Copyright 2013, Opera Mediaworks. All rights reserved.

2

iOS regains lead over Android in mobile-phoneimpression volume; continues as the top OS in monetizationiOS continues to outperform all other device platforms in terms of monetization, with the highest average eCPM and greatest percentage of publisher revenue. In what emerged asa major competition toward the end of last year, iPhone has now regained a slight lead over Android phones this quarter. Also of interest is the continuing importance of tablet devicesto the mobile marketplace. For the !rst time we are speci!cally singling out Android tabletsas they grow to a small but noticeable share of the market. Meanwhile, the iPad dominates, growing to over 6% of all ad impressions and over 12% of all revenue. Finally, as we anxiously await the impact of Samsung’s S IV devices, note that the Galaxy S III devices drove 11% of all Android traf!c, up from 9% last quarter.

iOS

44.53%

Android

31.26%

Other

14.29%

Symbian

5.60%

RIM

4.23%

Traf!c share (mobile phone OS)

OS Share % of traf!c % of revenue

Other 14.29% 15.39%

5.60% 2.46%Symbian

4.23% 6.19%RIM

31.26% 26.72%Android

iOS 44.53% 49.23%

- iPhone 31.91% 34.24%

- iPad 6.54% 12.60%

- Phone 30.22% 26.24%

- Tablet 1.04% 0.49%

6.07% 2.38%- iTouch



3

Music, Video & Media remains #1 category forimpression volume, now the leader in revenue generationWhile Business & Finance continues to produce the highest revenue per impression, Music, Video & Media leads all publisher categories in terms of both impression volume and total revenue generation.

Site category

Social

Business, Finance & Investing

Music, Video & Media

Computers & Electronics

News & Information

Sports

Health, Fitness & Self Help

Games

Arts & Entertainment

Other

% of revenue

% of impressions

Social

Business, Finance & Investing

Music, Video & Media

Games

Computers & Electronics

News & Information

Sports

Arts & Entertainment

Health, Fitness & Self Help

Other

7.25 14.5 21.75 290

#1 Impressions

#1 Revenue



3

Majority of ad requests and impression volumeis from USA, but Europe quickly gainingAcross the Opera Mediaworks platform, the United States continues to drive the majority of ad requests,but this lead is shrinking every month. In Q4 2012, approximately 60% of all ad requests came from the USA but by the close of Q1 2013 the U.S. share of requests was 50.67%. Mobile ad traf!c in the USA is still on an upward swing, but it is not accelerating at the breakneck pace we are seeing in Europe. The European market now generates over 21% of ad requests, up from 14.61% the previous quarter. It is also signi!cant to note that 65% of all European ad traf!c originates in the top !ve countries: the United Kingdom, Italy, Germany, France and Spain. As a further indication of the internationalization of the mobile ad market the Russian Federation ranks No. 7 by impression volume, after leaping into the Top 10 for the !rst time late last year.

Spain

South Africa

Australia

Nigeria

China

Brazil

Ukraine

Japan

Saudi Arabia

Malaysia

Top 20 countries by impressions

United States

United Kingdom

Italy

Canada

India

Indonesia

Russian Federation

Germany

Mexico

France

Africa

Middle East

Asia Paci!c

Europe

Americas (non-U.S.)

United States

4.10%

14.25%

7.76%

1.71%

50.69%

21.55%

4© Copyright 2013, Opera Mediaworks. All rights reserved.


As the mobile advertising space matures, advertisers and ad networks are implementing methodsto optimize ad delivery performance — while still being careful to safeguard user privacy. Contextualinformation easily acquired from mobile traf!c data, such as device (or OS) and connection type(e.g., mobile vs. Wi-Fi) often serves as the !rst criterion. But, advertisers are !nding that simple additionsto this criteria, such as time of day or day of week, or a carefully thought-out frequency-capping regime,can provide signi!cant enhancement to CTR performance. (See chart below.)

Intelligent prioritization of ad delivery optimizespublisher reach and campaign performance

Lift from targetingExample: Music application, ad campaign for a restaurant



% o

f CTR

per

form

ance

Untargeted Intelligent prioritization

0%

50%

100%

150%

200%

250%

Last quarter, we began running top-level performance campaigns that take advantage of our intelligence prioritization capabilities. While click-through rate (CTR) is still important to advertisers, conversions are ultimately what matters. Creative, relevant rich media ads work well to engage potential customers and build a lasting relationship with them, but conversions are the goal, as they directly drive business forward.

Targeting with intelligent prioritization

Standard targeting



In the example below, we show how for one mobile ad campaign Android was recognized as the top performer among all of the OS options. We then found that within that group, honing in on those accessing data from Wi-Fi (vs. any carrier) yielded different results based on the Android version they had. Version 2.2 and 2.3 were clear leaders, while Versions 3.1 and 3.2 surprisingly underperformed. Adjusting the campaign based on those insights dramatically enhanced overall campaign performance.

Financial services campaign: 60M impressions, 415,000 clicks, 81,000 conversions

Device type CVR

Android 20.2%

iPad 12.1%

Windows 10.5%

BlackBerry 7.0%

iPod 13.9%

iPhone 13.3%

Feature phone 4.9%

Android + carrier

Cricket

CVR

AT&T 31.1%

Verizon 23.5%

23.3%

Metro PCS 17.2%

Sprint 29.3%

T-Mobile 27.9%

Alltel 16.5%

Cellular 16.7%

Wi-Fi 13.5%

Android + Wi-Fi+ OS version

1.6

4.0

2.0

3.1

3.2

2.2

2.3

2.1

4.1

CVR

19.2%

12.3%

11.8%

10.2%

17.9%

13.0%

6.9%

6.4%

4.7%

CVR = Conversion rate

Samsung Mobile launched its new "agship device, the GALAXY Note II, in September 2012. To drive awareness of the product, the company worked with Opera Mediaworks’ subsidiary 4th Screen Advertising to build an interactive Parallax unit that would explore the key features of the device through an interactive experience.

Users were invited to swipe up to reveal the ad and uncover the story of the new hybrid phone/tablet, or "phablet." The viewing speed — and the direction of the story itself — were controlled entirely by the user, who could pause, jump ahead or scroll back through the ad's content with a simple swipe.

At the end, the ad displayed a vibrant, interactive 360-degree view of the device, with detailed speci!cations and quick links to Samsung Mobile's social channels for anopportunity to engage further with the brand.

Samsung GALAXY Note II — Parallax unit



Opera Mediaworks is theworld’s leading mobile advertising platform, helping to powerthe global mobile economy.We improve ef!ciency, through technology, innovation, transparency and trust, to create an open and vibrant marketplace for publishers and advertisers across the globe. Opera Mediaworks includes AdMarvel, an ad-serving and mediation platform; Mobile Theory,a premium mobile ad network in the United States; and 4th Screen Advertising Ltd., a premium ad network in the United Kingdom. Also included are impressions served within Opera mobile properties, including the Opera Mini Smart Page and the Opera Mobile Store. Opera Mediaworks is a member of the Opera Group.

Opera, Opera Software, Opera Mini and the 'O'logo are trademarks of Opera Software ASA.

Technology

Opera Mediaworks State of Mobile Advertising Q1 2013