To download the report, please visit http://bit.ly/2fyVTw5. The Q3 2016 App Install Marketing survey is the 6th of its kind since 2013. The survey provides insights, benchmarks, and trends from the top 100 grossing app developers, asking over 100 detailed questions and enjoying a 65% survey response rate. 62% of respondents represented mobile game developers, and 38% represented non-gaming developers for various app categories, including entertainment, music, news, and others.

1. App Install Marketing
Survey Results
Q3 2016

2. The Semi-Annual AdColony App Install Survey
2
Insights, benchmarks and trends from the top 100 grossing app developers
#6 6th Iteration Over 3 Years
130 Detailed Questions
65% Survey Response Rate
62% Mobile Game Developers
38%
Non-Game App Developers
(e.g. entertainment, music, news)
$1M+ Total Monthly App Install Budget
FORMAT & DATA RESPONDENT PROFILE
Based on aggregated market data of top 100 grossing ad spend & install volume.

3. State of the Market

4. 4
Top 5 Campaign Trends
App install budgets continue to increase driven by growth in mobile video & global campaigns.
Increase Spend More Video More Geos Partner Consolidation Testing New Channels
73%
75%
77%
81%
89%
78%
68%68%
76%
81%
63%
61%
59%
52%
72%
Q1 ‘15 Q3 ‘15 Q3 ‘16
Source: AdColony Q3 2016 App Install Marketing Survey

5. 2%
Share of Budget
71%
Playable Effectiveness
5
The Rise of Playable
Excitement
25%
Advertisers are impressed & excited about the future of playable ads.
Source: AdColony Q3 2016 App Install Marketing Survey

6. 6
Video Grows as Social Plateaus Agree Neutral Disagree
Source: AdColony Q3 2016 App Install Marketing Survey
Budgets Shifting to Video
Q1 '15 Q3 '15 Q3 '16
Budgets Shifting to Social
Q1 '15 Q3 '15 Q3 '16

7. 7
App Install Budget Allocation
What % of your budget do you allocate to each app
install format you currently use?
Video and display ads dominate the majority of
app install budget allocation for top publishers.
5%
3%
11%
22%
25%
33%
Video (non-social)
Social (video & display)
Display (non-social)
Native & Playable
Traditional
Source: AdColony Q3 2016 App Install Marketing Survey
Other

8. 8
Video Prevails in the Feed
34%
66%
Rich Media Effectiveness
Top mobile advertisers find video to be the most effective in-feed ad placement for their campaigns.
Source: AdColony Q3 2016 App Install Marketing Survey
37%
63%
Banner Display Effectiveness
13%
88%
In-Feed Video Effectiveness

9. Budget
Video
Reach
FewerPartners
NewChannels
CLV
CPI
Social
iOS
Programmatic
Android
Interstitials
DirectDeals
NativeAds
Television
Display
OutofHome
Print
Radio
OfferWalls
AppNetowkrs
9
Campaign Shifts in 2016
Compared to last year, my app install campaigns have increased in ______, or shifted more toward ______.
Disagree Agree
Source: AdColony Q3 2016 App Install Marketing Survey

10. Top App Install Formats

11. 91%
85%
82%
71%71%
64%
58%
38%
33%
25%25%
22%
15%13%
9%9%
11
Top App Install Formats by Usage
Video, display, and native ads lead the way.
Print App networks Offer walls Television Rich media In-feed video Social display Interstitial display
Radio Outdoor Cross promo Playable Native ads Banner Social video Full-screen video
Source: AdColony Q3 2016 App Install Marketing Survey

12. 12
App Install Budget Allocation by Channel
Video, display, and native ads lead the way.
Print Radio Offer walls Cross
promo
Rich media In-feed video Social display Social video
Outdoor App networks Playable ads Television Banner Native ads Interstitial
display
Full-screen video
Source: AdColony Q3 2016 App Install Marketing Survey
24.5%
14.8%
10.3%10.1%9.7%
8.8%8.6%
3.0%2.6%2.2%
1.6%1.4%1.4%
0.3%0.2%0.1%

13. 42.3%
25%
19%
6%
4%
2%2%
Video Drives Advertiser Excitement
71% of app install marketers are most excited about video advertising in 2017.
13Source: AdColony Q3 2016 App Install Marketing Survey
Full-Screen Video
Playable Ads
Social Video
In-Feed Video
Television
Cross Promotion
Radio

14. 86%
74%
65%
41%39%
33%33%
29%
26%25%
21%
19%
11%
5%
14
Most Effective App Install Formats
Share of advertisers awarding top 2 box responses regarding
channel effectiveness at achieving campaign objectives.
Offer walls Cross promo Outdoor Television Playable ads Social display Social video
Free app networks Rich media Banner Interstitial Native ads In-Feed video Full-screen video
Source: AdColony Q3 2016 App Install Marketing Survey

15. Targeting & KPIs
What matters to top advertisers

16. 16
Retargeting Campaigns
More advertisers find retargeting to be effective in 2016 than in 2015.
Retargeting Usage
Q1 '15 Q3 '15 Q3 '16
75%
68%
70%
How effective are your retargeting campaigns?
Very Ineffective Ineffective Neutral Effective Very Effective
37%
33%
11%
17%
2%
5%
36%36%
18%
5%
9%
34%34%
19%
3%
Q1 ‘15 Q3 ‘15 Q3 ‘16
Source: AdColony Q3 2016 App Install Marketing Survey

17. 17
Look-alike Campaigns
Look-alike campaigns continue to be both popular and effective at achieving app install goals.
Look-alike Usage
Q1 '15 Q3 '15 Q3 '16
93%93%
89%
How effective are your look-alike campaigns?
Very Ineffective Ineffective Neutral Effective Very Effective
77%
16%
7%
44%
38%
15%
4%
46%
32%
4%
15%
2%
Q1 ‘15 Q3 ‘15 Q3 ‘16
Source: AdColony Q3 2016 App Install Marketing Survey

18. Targeting
18
Which targeting parameters are most important & help maximize the performance of your app install campaigns?
Geography OS Souce App Gender Look-alike Demographics Age Device # Source Connection Carrier
Key Requirement Nice to Have Not Required
Source: AdColony Q3 2016 App Install Marketing Survey

19. Social Log-In Positive Review Session Time Tutorial Completion Retention Early IAP
71%
68%
26%
19%
8%6%
73%
83%
33%
25%
3%2%
76%
89%
33%
11%
0%
17%
19
Leading Indicators of High Quality Loyal Users
What are early indicators of a high quality loyal user who is likely to monetize via IAP?
Source: AdColony Q3 2016 App Install Marketing Survey
Q1 2015
Q3 2015
Q3 2016

20. Campaign Optimization
Team Size & Optimization Frequency

21. 21
Frequent Campaign Optimization
How often does your team review app install campaign
results and optimize accordingly?
78% of app install teams optimize their
campaigns multiple times a week, if not every
single day.
7%
15%
33%
35%
10%
Multiple times per day
Every day
Multiple times per week
Once a week
Less than once a week
Source: AdColony Q3 2016 App Install Marketing Survey

22. 22
Campaign Optimization Frequency
On average, top UA teams optimizes their campaigns 3.25 times per week.
Weekly or Less Every Few Days Daily or More
44%
33%
22%
42%
32%
27%
30%
41%
28%
Source: AdColony Q3 2016 App Install Marketing Survey
Q1 ‘15 Q3 ‘15 Q3 ‘16

23. App Install Team Size
65% of UA teams have 4 or more people
23
8%
31%
26%
21%
14%
Source: AdColony Q3 2016 App Install Marketing Survey
1 (just me)
2 to 3
4 to 5
6 to 9
10 +

24. 24Source: AdColony Q3 2016 App Install Marketing Survey
Medium Sized App Install Teams Grow in Prominence
Teams are running leaner than this time last year, with the the average team having 4 members.
1 2-5 6-9 10+
8%
31%
47%
14%
18%18%
58%
5%
9%
20%
48%
24%
Q1 2015
Q3 2015
Q3 2016

25. Other CPL CPE CPM CPCV CPC CPA CPI
96%
31%
21%
17%17%
4%3%1%
95%
22%
33%
43%
22%
15%
12%
3%
25
CPI Dominates as Campaign Pricing Model
CPA becomes more prevalent as CPM, CPC, and CPCV campaigns fall.
Source: AdColony Q3 2016 App Install Marketing Survey
Q3 ‘15 Q3 ‘16

26. Budget & Spend
Channels & Methods

27. 27
App Install Budget Allocation
What % of your budget do you allocate to each app
install channel you currently use?
Video and display ads dominate the majority of
app install budget allocation for top grossing
publishers.
5%
3%
11%
32%
48%
Video
Display
Native & Playable
Traditional Media
Other
Source: AdColony Q3 2016 App Install Marketing Survey

28. 28
App Install Budget Allocation by Channel
Video, display, and native ads lead the way.
Print Radio Offer walls Cross
Promo
Rich media In-feed video Social display Social video
Outdoor App networks Playable ads Television Banner Native ads Interstitial
display
Full-screen video
Source: AdColony Q3 2016 App Install Marketing Survey
24.5%
14.8%
10.3%10.1%9.7%
8.8%8.6%
3.0%2.6%2.2%
1.6%1.4%1.4%
0.3%0.2%0.1%

29. Channel Usage
What’s fallen in and out of favor

30. 30
Channel Usage Over Time: Tried & True
Video Social Interstitial Display Banner Display
71%
85%
89%
98%
92%92%
97%97%
93%
96%96%98%
86%
90%92%
100%
86%
83%
94%
100%
89%
100%
68%
100%
Q1 ‘13 Q3 ‘13 Q2 ’14 Q1 ‘15 Q3 ‘15 Q3 ‘16

31. 31
The Demise of Incentivized
Incentivized installs fall out of favor as advertisers continue to focus most on user quality
Q1 '13 Q3 '13 Q2 '14 Q1 '15 Q3 '15 Q3 '16
22%
19%
54%
47%
64%
100%
13%
22%
41%
35%
64%
95%
Free App Networks
Offer Walls
Source: AdColony Q3 2016 App Install Marketing Survey

32. Channel Effectiveness
What’s working for the top app install marketers

33. Full Screen Video Social Video In-Feed Video Television
33
Channel Effectiveness: Video
Full-screen mobile video remains the most effective format, with television offering mixed results.
Least Effective
Moderately Uneffective
Somewhat Uneffective
Neutral
Somewhat Effective
Moderately Effective
Most Effective
Source: AdColony Q3 2016 App Install Marketing Survey

34. Social Interstitial Banner Rich Media
34
Channel Effectiveness: Display
Display remains moderately effective for app install marketers.
Least Effective
Moderately Uneffective
Somewhat Uneffective
Neutral
Somewhat Effective
Moderately Effective
Most Effective
Source: AdColony Q3 2016 App Install Marketing Survey

35. Television Out of Home Print Radio
35
Channel Effectiveness: Traditional Media
Out of home and television are the most promising traditional media channels for app installs.
Least Effective
Moderately Uneffective
Somewhat Uneffective
Neutral
Somewhat Effective
Moderately Effective
Most Effective
Source: AdColony Q3 2016 App Install Marketing Survey

36. Native Ads Playable Ads Cross Promo App Networks Offer Walls
36
Channel Effectiveness: Other Formats
Native and playable ads prove the most effective for alternative app install channels.
Least Effective
Moderately Uneffective
Somewhat Uneffective
Neutral
Somewhat Effective
Moderately Effective
Most Effective
Source: AdColony Q3 2016 App Install Marketing Survey

37. Popular & Effective
37
Use Rate vs Effectiveness
Source: AdColony Q3 2016 App Install Marketing Survey
Full-screen video
Social video
In-Feed video
Social display
Native ads
Interstitial
Banner
HighUseLowUse
More EffectiveLess Effective
Less Popular
Playable ads
Television
Outdoor
Rich media
Cross promo
Free app networks
Offer walls

38. Top KPIs
What the top app install marketers look for

39. User Quality Price Volume Level of Service Targeting
39
Top User Acquisition KPIs
User quality is the undisputed top KPI for top app install marketers
Not important at all
Somewhat important
Moderately important
Very important
Most important
Source: AdColony Q3 2016 App Install Marketing Survey

40. 40
Most Important KPIs Over Time
User quality remains most important, with price increasingly on advertisers’ minds
User Quality Price Volume Level of Service Targeting
23%25%
38%
45%
87%
14%15%
24%22%
80%
26%26%
30%
39%
85%
Q1 2015
Q3 2015
Q3 2016
Source: AdColony Q3 2016 App Install Marketing Survey

41. 2%
15%
43%
39%
2015 Q1
41
KPI Importance: Targeting
6%
23%
49%
23%
2016 Q32015 Q3
24%
63%
14%
As UA costs rise, targeting rebounds in importance.
Source: AdColony Q3 2016 App Install Marketing Survey
Least Slight Moderate Very Most

42. 2%
13%
54%
30%
2015 Q1
42
KPI Importance: Level of Service
2%
21%
53%
25%
2016 Q32015 Q3
2.1%
13%
70%
15%
Service is important to nearly all app install marketers.
Source: AdColony Q3 2016 App Install Marketing Survey
Least Slight Moderate Very Most

43. 17%
57%
26%
2015 Q1
43
KPI Importance: Price
8%
9%
38%
45%
2016 Q32015 Q3
3.4%
12%
63%
22%
App install marketers are becoming more price conscious.
Source: AdColony Q3 2016 App Install Marketing Survey
Least Slight Moderate Very Most

44. 2%
13%
54%
30%
2015 Q1
44
KPI Importance: Install Volume
2%
21%
40%
38%
2016 Q32015 Q3
9%
67%
24%
Volume is becoming slightly less important as attention shifts to quality.
Source: AdColony Q3 2016 App Install Marketing Survey
Least Slight Moderate Very Most

45. Looking Forward
How campaigns will change in 2017

46. 46
Video Drives Advertiser Excitement
71% of app install marketers are most excited about video
advertising in 2017.
2%2%
4%
6%
19%
25%
42%
Source: AdColony Q3 2016 App Install Marketing Survey
Full-Screen Video
Playable Ads
Social Video
In-Feed Video
Television
Cross Promotion
Radio

47. Budget
Reach
NewChannels
Video
FewerPartners
CLV
Social
CPI
Programmatic
iOS
DirectDeals
Native
Android
Television
Display
Interstitials
OutofHome
OfferWalls
Print
Radio
AppNetworks
47
Campaign Projections for 2017
Compared to this year, in 2017 my app install campaigns will increase in ______, or shift more toward ______.
Disagree Agree
Source: AdColony Q3 2016 App Install Marketing Survey

48. 48
Display Rebounds
To better leverage retargeting data, advertisers once again looking to increase display budgets.
10%
2%
4%
8%
11%
0%
Q1 ‘13
Q3 ‘13
Q2 ‘14
Q1 ‘15
Q3 ‘15
Q3 ‘16
Source: AdColony Q3 2016 App Install Marketing Survey