Nexage: CPMs grew 44 percent quarter-over-quarter, increase in rich media and video ad impressions and brand mobile ad spend will increase next year


By Scott Reyburn Comment

Mobile advertising company Nexage released its first ever analytics report today detailing mobile advertising trends in Q3 2012. The company said that CPMs grew 44 percent from Q2 2012 to Q3 2012 and rich media and video ad impressions grew 19 percent.

“CPMs will continue to rise, if not at a faster pace,” said Victor Milligan, chief marketing officer of Nexage. The company attributed the rise in CPMs to the value shift in the audience which has valuable data tied to it such as location, demographic, and device ID, and positive mobile ad campaign ROI which is increasing demand.

Nexage brokers mobile advertising deals through its Nexage Exchange, a service that allows publishers to sell inventory to advertisers via real-time bidding (RTB). The company also features a private exchange service for “premium” publishers and buyers.

In Nexage’s quarterly report, which is said to provide in-depth analysis of the dynamics, trends and patterns shaping mobile advertising, the company said rich media and video ads now account for a quarter (26 percent) of all mobile ads served.

“The publishers are enabling more of them,” he says. “Rich media ads or expandables are better story telling devices. When you think of a smartphone and the fact that you are using your fingers to play with the ad, there’s a certain ability for rich-media ads and expandables to actually be useful in a smartphone and tablet environment, and the brands are starting to the crack the code on that.”

According to Nexage, brand mobile ad spend is now estimated at one percent of total ad spend budget, but Nexage predicts brand mobile ad spend to grow three to seven percent next year. Milligan said brands had anxiety with increasing ad spend during the movement from print to digital and now the same is occurring with movement to mobile, adding that it takes a while for organizations to change the way they operate.

“There’s this concept that was permitting in the press about being mobile first,” he says. “The more important point is don’t be mobile last. The brands are realizing that they have to engage their consumers in mobile in some way and they are trying to figure out the best way. Not engaging them on mobile doesn’t make sense to them anymore. You’ll see some going aggressively, you’ll see some dabbling, but you are going to see a much greater proportion of brand spend coming in.”

Nexage is part of a group of several smaller mobile advertising companies differentiating itself by offering an alternative to traditional mobile advertising networks like Millennial Media, InMobi and Google’s AdMob. A similar competitor to Nexage is MoPub, which also offers a RTB service and a private mobile advertising exchange.

Data from the report comes from Nexage’s real-time bidding exchange service, a service that now supports more than 20 billion impressions per month.

Nexage has received a total of $19.5 million in funding from backers that include JLA Ventures, RBC Venture Partners, GrandBanks Capital, SingTel Innov8 and Hearst Ventures.