third quarter metrics and the good news for developers is that U.S. fill rates have stabilized. The problem for developers is that fill rates have stabilized at 18%, a one-point drop from the second quarter. The question that developers have to ask themselves is whether or not mobile advertising can be relied upon to create a viable business for their products.
As we mentioned when reporting on Smaato's second quarter results, developers looking to make a living off of mobile ads should continue to find other options. Especially those developing for iPhone and Android, that have the highest inventories but the lowest click through rates. Smaato attributes the 1% drop to the seasonal summer period which is considered to be the slowest quarter in the consumer sector before the start of the holidays. Smaato notes that 13 of 20 U.S. ad networks performed above average with fill rates between 19% and 84%.
It is not a mistake that click through rates for the major smartphone OS platforms are best in least adopted platforms. Windows Phone continues to have the highest click through rate despite only being in a handful of consumers' hands. BlackBerry, which has a global install base of 70 million, ranked second with Symbian, iOS and Android rounding out the chart. Essentially, the more inventory that is available across a diverse set of apps, the lower the click through rate will be.
Smaato notes that the best performing ads are those that are either specialized or include rich media. Targeted and specialized ads, especially those that target based on location, fare the best. This confirms what we have known for a while - knowing the consumer and using analytics to target them specifically yields the best results. Companies like Flurry, Apsalar and Localytics know this and have built data driven platforms to target users based on behavior within an app.
"Specialization among ad networks is still continuing to yield great returns," said Ragnar Kruse, Smaato's CEO and co-founder, in the report. "We are seeing more and more specialization like DSPs coming into the market and generating substantial revenue."
As we noted in Smaato's second quarter metrics, the company comes from a background where it believes it can improve fill rates and click through performance. Hence, all of its findings should be viewed through the notion that the company is selling a product when it produces these quarterly reports.
Developers - do you rely on mobile ads to monetize your apps? What kind of success have you seen and is it an avenue that can work for all developers or only the ultra-successful app makers? Let us know in the comments.