We seem to have reached a crossroad in the battle for mobile platform dominance. For years now the two major players, Google’s Android and Apple’s iOS have been fighting it out, with Android commanding the lion’s share of the market. According to a recent report from Gartner, Android commanded 81.7% of the smartphone shipments share compared to iOS’s 17.9% in Q4 of 2016. Interestingly, despite Android having a huge advantage in market share, iOS has typically dominated in its share of monetized app impressions as well as eCPMs, with advertisers considering the iOS user base more valuable. This dynamic, however, is changing rapidly, according to the latest data released by PubMatic.
One of the key observations published in Quarterly Mobile Index report by PubMatic is the sharp upward trend in Android app monetized inventory volumes and eCPMs. Globally, the mobile app inventory has emerged as an important driver in the growth of digital displays in 2016, with Android apps leading the charge.
Android app eCPMs rose by 79% year-over-year in Q4 of 2016. This follows a trend of double-digit growth year-over-year in each quarter of 2016. This is the first time that Android eCPMs have overtaken their iOS counterparts in a single quarter. That is not to say that iOS eCPMs have fallen; iOS registered a 5% increase year-over-year in Q4 2016, a value that pales in comparison to Android’s growth.
Android’s leadership in eCPM growth has been uniform across all regions, with any value differential being practically nullified now.
In North America, which has traditionally been a market favourable to Apple, iOS app inventory saw a slight decline in average prices in Q4 2016. The decline was surprising considering the fact that Apple gained some ground in iPhone sales share which went up to 31.8% in June of 2016. Android remains the leader by smartphone sales share despite the increase in Apple iPhone sales attributed to the launch of the iPhone 7 and iPhone 7 Plus.
The EMEA region observed the highest increase in mobile app eCPMs across both operating systems with 110% improvement for Android compared to a 70% increase for iOS in Q4 2016.
In the APAC region, which is the second largest mobile device market overall, Android once again proved its domination with 87% year over year growth in eCPMs in Q4 2016. In contrast, Apple iOS had to settle for a more modest 23% growth despite the flourishing market scenario of smartphone and apps.
Android’s rate of growth dominance has not been only limited to eCPMs, with the considerable ground being made up in volume gap of monetized app impressions too. The volume disparity has all but disappeared at the end of 2016, with Android claiming 49% of total monetized app impressions squeezing the share of iOS to 51% in 2016.
Even if we were to compare data only for Q4 of 2016, we find Android take the lead with 62% compared to iOS’s 38%. The increase of 12% point in the share of Android in 2016 and 18% points in Q4 2016 as compared to the same duration in 2015 is a clear sign that advertisers are findings greater ROI from spending advertising dollars on Android apps.
This data points to a worrying trend for Apple, where they are quickly losing ground to Android in the app marketplace where they have traditionally dominated. Android is rapidly cannibalising Apple’s share of paid app impressions while also experiencing vastly improved eCPM values.
A lot of this can be attributed to Android maturing as a platform over the last few years. While Android has dominated the budget and mid-tier smartphone market for a while now, they have also been making serious inroads into the high-end. Apple is facing considerable competition in the premium smartphone segment from various Android manufacturers like Samsung and Google. Offlate both the companies have invested heavily in premium smartphones to challenge Apple in the premium segment with the launch of the Galaxy S7, Pixel and Pixel XL phones.
However, things are not bleak for Apple. Mobile PMP (Private Marketplaces) impression volumes have grown over 200% in Q4 2016, with eCPMs also doubling year-over-year, records PubMatic. This has in large part been due to buyers’ shift to programmatic adverting and a more widespread adoption of Header Bidding. Mobile monetized header bidding impressions grew an astounding 50 times year-over-year in Q4 of 2016. Significant opportunities are available for mobile advertising across the globe, with APAC being the fastest growing market with a 124% year-over-year growth in Q4 2016 and North America leading in eCPM growth with 36% growth in Q4 2016 compared to Q4 2015. The increase in eCPMs has been attributed to better user targeting and higher quality ad inventory as a benefit of programmatic buying.
Despite Android’s significant strides, Apple has continued to display growth in both eCPMs and monetized app impression volume overall. With great opportunities across the globe, there seems to be enough room for growth for both platforms, albeit with Android outpacing its counterpart by quite a bit. If current trends hold, Android app monetized inventory volumes will likely overtake iOS in the coming year, having already taken the lead in eCPM values for the first time.
The above findings must be considered only as indicative trends within mobile app monetization industry and changing dynamics of Android and iOS. The PubMatic report is based on the data and impressions that were recorded on PubMatic platforms only.