Vietnam Mobile App Advertising & Monetization Report (2017)

1. 2017 REPORT An Advertising Company Under Appota Group Vietnam Mobile App Advertising & Monetization

2. Part 00 SUMMARY 2017 – A year in Vietnam mobile ads review Part 01 VIETNAM MOBILE MARKET OVERVIEW Vietnam digital & mobile overview Vietnam OS market share Global & Vietnam mobile app market Part 02 VIETNAM MOBILE ADVERTISING & APP MONETIZATION Mobile ads spending: Vietnam & Southeast Asian countries In-app ads Mobile app marketing – UA insights Mobile app monetization insights Vietnam in-app ads revenue Part 03 HIGHLIGHTS 2017 Yearbook of Mobile & Mobile Ads - Vietnam Experts’ Evaluation Mobile & In-App Ads Trends for 2018 Table Of Content

3. Summary 2017 was another successful year for Vietnamese mobile ads industry. With big growth in smartphone adoption, Vietnamese Internet users have a tendency to move online activities towards mobile devices and mobile apps, especially. Mobile ads, thus, attracted advertisers’ attention and received higher ads budget. In 2017, mobile app ﬁeld of Vietnam, one of the fastest growing market in APAC region, received lot of support and investment from big technology corporations, which resulted in considerable changes and total upgrade to Vietnamese mobile ads landscape. Adsota’s Vietnam mobile ads & mobile app monetization report 2017 presents mobile ads key insights and trends in Vietnam of the whole year 2017. Happy reading! Adsota Team VIETNAM MOBILE ADS & MOBILE APP MONETIZATION REPORT 2017

4. 01VIETNAMMobile Market Overview

5. Vietnam Digital Overview Source: We are social, Google, Nielsen, VNTA (2017) 2G 3G 4G2G 3G 4G Subscriptions 75.1M Subscriptions Subscriptions 44.9M 7M Population 95.6M (2017) Internet Users 67% (of total population) Mobile Web Traffic 24% Tablet Web Traffic 3% Laptop & Desktop Web Traffic 73% (Based on each device’s share of web pages served to web browsers)

6. Vietnam Mobile Overview Source: We are social, Google, Nielsen, VNTA (2017) Population 95.6M (2017) Mobile Users 73% Smartphone Users 42% (of total population) (of total population) Primate Cities 84% Secondary Cities 71% Rural Area 68% Social Mobile Users 50M Social Mobile Users 52% (of total population) (Percentage of Smartphone users/Total Mobile Phone Users in each type of human settlement)

7. Source: Google Barometer (2017), Note: surveyed-based statistics, n= 1,000 Vietnam Smartphone Users Behavior According to Google Barometer survey in 2017, searching, visiting social networks, playing game, watching online video and shopping were top 5 weekly activities among Vietnamese smartphone users. Watching online video and visiting social networks were the most 2 popular weekly activities done by Vietnamese smartphone users, with almost 80% of those surveyed agreed. Searching came third with 66%, followed by playing games (36%) and shopping (18%).0% 20% 40% 60% 80% 100% Shopping Online Video Gaming Social Networking Searching Weekly Smartphone Activities of Vietnamese Users Searching SocialNetworking Gaming Watching Video Shopping

8. Source: Stat Counter Note: Based on each operating system’s share of all global mobile web requests at the end of every year Vietnam – Mobile & Tablet OS Share As can be seen from mobile web request on each operation system over the last 3 years in Vietnam, Android’s been the most popular platform on mobile, while tablet’s been dominated by iOS. At the end of 2017, Android reportedly captured nearly 2/3 of total mobile OS market, and iOS accounted for about 30%. On the contrary, almost 80% of tablet market share was constituted by iOS, leaving a small share of roughly 20% for Android and a very tiny share for other operation systems. 0%20%40%60%80%100% 0% 20% 40% 60% 80% 100% 2015 2016 2017 ANDROID iOS Others

9. Source: AppBrain, Statista (2017) Global Mobile App Market Overview Until the end of 2017, Google Play remained the world’s biggest app store with more than 3.5 million active mobile apps. Apple Store came second with 3 million. Same as previous years, in 2017, a majority of apps on both app stores were free (94% on Google Play, 88% on Apple Store). Capturing 12% of total app number in 2017, paid apps had better chance on Apple Store than Google Play (6%). Over the past years, Game has been the most popular category with the highest downloads on both app stores. Communication, productivity and personalization category of app were recorded to be downloaded more on Android than iOS platform. And, iOS Users cared more about ﬁnance, travel and education. APPLE STORE 3M+(Number of active apps, 2017) 88% Free 12% Paid GOOGLE PLAY 3.5M+(Number of active apps, 2017) Free 94% Paid 6% Top Popular App Category, By Downloads APPLE STORE 3M+(Number of active apps, 2017) 88% Free 12% Paid      Game Tools/Utilities Entertainment Communication Photo, Video Social Productivity Music, Audio m-Commerce Personalization           Game Entertainment Photo, Video Tools Social m-Commerce Finance Lifestyle Travel Education     

10. Most Popular App CategoriesIn Vietnam, by Monthly Downloads and Installs Game Social Messaging, Communication Media Entertainment Music, Audio Search Book, Comic, Magazine News, Weather Education Shopping m-Commerce 69% 68% 66% 63% 62% 62% 59% Source: Google (2017) Note: Surveyed-based, Question: How often do you install new app of each category? Vietnam Mobile App Market In 2017, sharing the same mobile trend around the world, in Vietnam, Game was the most popular app categories, with the highest installs and downloads per month. According to 2017 survey on install and download frequency of each category, in Vietnam, among new apps downloaded and installed each month, game came ﬁrst with 69% of those surveyed, closely followed by Social (68%) and Messaging & Communication (66%). Other categories getting into top 10 included Media & Entertainment; Music & Audio; Search; Book, Comic & Magazine; News Weather; Education and Shopping & m-Commerce. 58% 57% 55%

11. 02VIETNAMMobile Advertising & App Monetization

12. Source: eMarketer, iab (2017) Southeast Asia Mobile Ads Spending Mobile ads spending in Southeast Asian countries ranged from 78 million to 194 million USD in 2017. Singapore lead the area with the highest mobile ads spending, which also captured the biggest share of total digital ads spending. Vietnam had the smallest mobile ads market among those countries. In 2017, about 78 million USD was spent on mobile ads, accounting for 36.6% of total Vietnam digital ads spending. Percentage of Total Digital Ads Spending Note: Mobile Ads Spending on mobile phones, tablets & other internet-connected devices, excluding MMS, P2P messaging-based ads

13. Source: eMarketer, iab (2017) Vietnam Mobile Ads Spending Percentageof Total Digital Ads Spending Note: Mobile Ads Spending on mobile phones, tablets & other internet-connected devices, excluding MMS, P2P messaging-based ads Mobile ads is on the rise, and will continue to play a more signiﬁcant role in the future of Vietnamese digital ads industry. Vietnam mobile ads spending increased from 17.2 million USD (13.1% of total digital ads spending) to 78.7 million USD (36.6% of total ads spending) during the period between 2015 and 2017. It’s forecasted that mobile ads spending in Vietnam would keep growing gradually to 220 million USD, and capture a bigger share (68%) of total digital ads spending in 2020. $- $50.0 $100.0 $150.0 $200.0 $250.0 $300.0 $350.0 2015 2016 2017 2018 2019 2020 13.1% 22.5% 36.6% 55.3% 67.4% 68% Mil.

14. Source: Smaato (2017) In-App vs. Mobile Web Ads Spending Along with the development of mobile industry and mobile ads, the growing inﬂuence of mobile in-app ads over the last 4 years is obvious. Globally, in-app ads spending share increased impressively from 66% (2014) to 96% (2017). Mobile web ads spending’s left with substantially diminishing share, from 34% (2014) to only 4% (2017). Mobile Web Ads Spending Global IN-APP Ads Spending Share 66% 73% 80% 96% 2014 2015 2016 2017

15. Source: Smaato (2018) In-app Ads Request Y/Y Growth Asia-Paciﬁc, 2016 - 2017 With in-app ads spending share rise from 80% to 96% globally, in comparison with mobile web ads spending, the period from 2016 to 2017 witnessed a global growth in in-app ads request. APAC is the market with the highest in-app ads request year-over-year growth. Within this area, the biggest growth went to Japan (+147%), South Korea (+105%), and Singapore (+96%). Vietnam and other Southeast Asian developing mobile markets like Thailand, Indonesia, Philippines were recorded an increase of 50-70%. +147% +105% +96% >75% 50 - 75% <15% NA 30 - 50% 15-30% Japan South Korea Singapore >75% 50 - 75% <15% NA 30 - 50% 15-30% Japan South Korea Singapore +147% +105% +96%

16. Source: AdColony (2017) Mobile App Marketing UA Insights A majority of app marketing budget was spent on video and display ads. Video ads, including full-screen, social, in-feed received about 57% of budget. 24% of total UA budget was spent on display ads, including social, banner, interstitial and rich media display. App Marketing Budget Allocation 57% Video Ads 24% Display Ads 1% 8% 21% 27% OthersIn-feedSocialFull-screen 8% 7% 7% 2% Social Banner Interstitial Rich media 2%2%2%2%2% 4%5% OthersOﬀer wallsInﬂuencerFree app networks Cross promo Native adsPlayables

17. Source: AdColony (2017) Note: Surveyed-based Mobile App Marketing UA Insights Video (including social, in-feed, playable) were rated by global mobile marketers as the most effective channels to drive app installs. Social display, voted by roughly 40% of those surveyed, were also considered an effective install-driving channel. However, other types of display ads (banner, interstitials) weren’t viewed as useful method to acquire users. About 2/3 of mobile marketer joining the survey thought KOLs campaigns, cross promotion could play particular role in their UA campaign. UA Channels Ranking, by Effectiveness 0% 10% 20% 30% 40% 50% 60% 70% Offer walls Insterstial display Free app networks Cross promotion Influencer campaigns Native ads Playable video In-feed video Social display Video

18. Source: AdColony (2017) Note: Surveyed-based Mobile App Marketing UA Insights Both gaming and non-gaming app marketers relied heavily on CPI (Cost-Per-Install) model to acquire users, with 100% of surveyed mobile marketers’ vote. CPA (Cost-Per-Action) contributed more to non-gaming than gaming app. On the contrary, CPL (Cos-Per-Lead) model’s more useful to games than non-gaming app UA campaign. 0% 20% 40% 60% 80% 100% CPI CPA CPM CPC CPE CPCV CPL Gaming app Non-gaming app UA Model Eﬀectiveness Games vs. Non-gaming Apps

19. Source: AdColony (2017) Note: Surveyed-based, Ranking based on the importance of each indicator in evaluating app user quality Mobile App Marketing UA Insights Retention was the indicator that mobile marketers in APAC and EMEA relied on the most to evaluate users quality. In North America, the most important indicator was in-app purchase; and, retention came second. In these 3 areas, other trustworthy user quality criterions were tutorial completion, session time and positive review. Different from EMEA and North America, in APAC, user sending invitation’s hardly considered as a factor to appraise value of app users. User Quality Indicator Ranking, by Region North AmericaEurope, the Middle East and Africa (EMEA)Asia - Pacific (APAC) Retention In-App Purchase Tutorial Completion Session Time Positive Review Invitation Sent Social Login User Quality Indicator Ranking, by Region North AmericaEurope, the Middle East and Africa (EMEA)Asia - Pacific (APAC) Retention In-App Purchase Tutorial Completion Session Time Positive Review Invitation Sent Social Login

20. Source: Chartboost (2018) Note (1) Game App CPI, Note (2) Norway wasn’t included in global top CPI on iOS platform. CPI Statistics Global Top CPI

21. Source: Chartboost (2018) Note: Game App CPI CPI Statistics Singapore lead Southeast Asia (SEA) in CPI ($1.37 on Google Play, $1.67 on Apple Store). Excluding Singapore, CPI in Southeast Asian countries ranged from $0.2 to $0.4 and from $0.3 to $0.9 on Google Play and iTunes, respectively. Surprisingly, top 3 most potential and fastest growing mobile markets of SEA (Indonesia, Philippines, Vietnam) were recorded with the lowest CPI on both Android and iOS platform.

22. 56% 39% 5% Others In-App Purchase Video Ads Display Ads Native Ads 31% 20% 5% Paid Installs Subscriptions m Source: AdColony (2017) Mobile App Monetization Model: Gaming vs. Non-Gaming App More than half of total mobile revenue were generated through in-app mobile ads, including video (31%), display (20%) and native (5%). 39% of revenue came from in-app purchase. Other sources like paid installs, subscription, m-commerce and affiliate contributed very insignificant share. 56% 39% 5% Others In-App Purchase 2% 1% 1% 1% Paid Installs Subscriptions m-Commerce Affiliate 31% 20% 5% Video Ads Display Ads Native Ads

23. Source: Newzoo, AdColony (2017) Mobile App Monetization Model: Gaming vs. Non-Gaming App In 2017, 82% of worldwide app revenue was generated through gaming apps, leaving a small share of 18% to non-gaming ones. In gaming apps, in-app purchase & m-commerce contributed the biggest earnings share (43%), followed by video ads (31%) and display ads (19%). In non-gaming apps, the biggest revenue share was from video ads (39%); display ads and IAP & m-commerce came behind with 30% and 21% respectively. Native ads account for 10% of app revenue in non-gaming apps, but only 2% in games.

24. $- $0.10 $0.20 $0.30 $0.40 $0.50 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Android AdMob Smaato Facebook Google DFP $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec iOS Source: AppotaX, Appodeal (2017) Note: Comparison might not be relevant due to diﬀerence of ads platform Vietnam Mobile App Ads Revenue eCPM Statistics - Ads Format: Banner $- $0.10 $0.20 $0.30 $0.40 $0.50 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Android AdMob Smaato Facebook Google DFP $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 Jan Feb Mar Apr May Jun Jul iOS

25. $- $1.00 $2.00 $3.00 $4.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Android AdMob Facebook Chartboost Google DFP $- $1.00 $2.00 $3.00 $4.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec iOS Source: AppotaX, Appodeal (2017) Note: Comparison might not be relevant due to diﬀerence of ads platform Vietnam Mobile App Ads Revenue eCPM Statistics - Ads Format: Interstitial $- $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Android AdMob Facebook inMobi Chartboost Google DFP $- $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 Jan Feb Mar Apr May Jun J iOS $- $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 Jan Android

26. $- $1.00 $2.00 $3.00 $4.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Android $- $1.00 $2.00 $3.00 $4.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec iOS Vungle Unity Ads AdColony Chartboost Source: AppotaX, Appodeal (2017) Note: Comparison might not be relevant due to diﬀerence of ads platform Vietnam Mobile App Ads Revenue eCPM Statistics - Ads Format: Rewarded Video Aug Sep Oct Nov Dec Mar Apr May Jun Jul Aug Sep Oct Nov Dec $- $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec iOS Vungle Unity Ads AdColony Chartboost

27. $- $1.00 $2.00 $3.00 $4.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec iOS $- $1.00 $2.00 $3.00 $4.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Android Vungle Unity Ads AdColony Source: AppotaX, Appodeal (2017) Note: Comparison might not be relevant due to diﬀerence of ads platform Vietnam Mobile App Ads Revenue eCPM Statistics - Ads Format: Video $- $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 Jan Feb Mar Apr May Jun iOS $- $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Android Vungle Unity Ads AdColony

28. 03HIGHLIGHTS Aug Sep Oct Nov Dec

29. Highlight 1: 2017 Yearbook of Mobile & Mobile Ads - Vietnam Vietnam Telecom Innovation: 4G and beyond 2017 experienced a big change in telecom, with users moving forwards to 4G from 3G. The growth of the 4G services upgraded IT infrastructure and added more value to mobile phone ecosystem of Vietnam. Smartphone Battle Apple celebrated 10th anniversary with iPhone X. Google Acquired HTC, marking a substantial expansion of Google's hardware efforts. Artificial Intelligence (AI) Revolution 2017 was a year of AI, with the rise of device connection, big data, machine learning, etc. Cryptocurrency Conquest Cryptocurrencies like Bitcoin BTC, Ethereum ETH, Ripple XRP, Cardano ADA, etc. shook the world of finance and technology. Cyber Attack In 2017, Vietnam suffered from more than 10,000 cyber attacks (VNCERT). Vietnam was also one of 20 most damaged victims of WannaCry attack (May 2017) Conflict between advertisers and social media publishers Firms, advertisers in Vietnam were called on to stop advertising on Facebook and YouTube due to toxic anti-government information. Rise of Vietnamese Smartphone Brand Smartphone under Vietnamese brand name like Viettel, BKAV and Asanzo made incredible remarks, in 2017, in affordable and affordable premium smartphone segment. Programmatic Ads Innovation Google Ad Exchange For Publishers was introduced in Vietnam for the first time, providing the bigger app monetization opportunity for Vietnamese publishers. The first Vietnamese Tech Startup to undertake IPO in USA VNG Corp signed memorandum to list on The US’ second largest stock exchange, Nasdaq.

30. Entertainment, music and photo & video categories of app have always had significant roles on Vietnamese smartphone activities over the last years. This fact will certainly remain the same in 2018. Based on statistics and positive perspective towards heath-care, in 2018, health & fitness apps, especially ones integrated with artificial intelligence, will attract more attention from users. In 2017, AR may not be trendy in Vietnam yet despite supportive technologies from Google and Apple, like ARKit or ARCore. Mobile App Development Evaluation Artificial intellectual (AI) like chatbot can be made full use of to increase user engagement in effective and customized way. Highlight 2: Experts’ Evaluation Guest Experts Mr. LE HAI ANH CMO – HD APPS Mr. MAI CHAN CHINH Co-Founder – Eco Mobile Team Mr. DAM TRONG DUC Co-Founder – Bazooka Team Mr. TRAN MANH HUNG Co-Founder – Onesoft Team

31. In 2018, numerous Vietnamese app developers are confidently going to aim for big markets like North America, EU and Japan, etc., where payment, sharing-service type apps, in particular, are in high demand. Artificial intellectual (AI) like chatbot can be made full use of to increase user engagement in effective and customized way. Though there are chances for in-app purchase monetization model, Vietnamese publishers still depend mostly on in-app ads. Publishing Trends Evaluation: Globalization – Localization – Personalization Monetization Trends Evaluation Highlight 2: Experts’ Evaluation Guest Experts Mr. LE HAI ANH CMO – HD APPS Mr. MAI CHAN CHINH Co-Founder – Eco Mobile Team Mr. DAM TRONG DUC Co-Founder – Bazooka Team Mr. TRAN MANH HUNG Co-Founder – Onesoft Team

32. Source: Smaato (2017) Highlight 3: Mobile & In-App Ads Trends for 2018 Mobile Video Ads Video was in high demand with high in-app ads request during 2017. This ads format also received positive review from both advertisers and publishers. Video will singularly contribute to mobile ads success in 2018. ePrivacy Directive (Cookie Law) ITP (Intelligent Tracking Prevention), ad blockers or data protection regulation will be huge challenges for mobile & in-app ads industry in 2018, requiring action from programmatic ads strategists to adapt to the situation . Rising eCPMs The growth in smart devices adoption and time spent in mobile apps encourages advertisers to invest more in app platform, which generates higher in-app revenue (eCPM). Global eCPM’s forecasted to increase about 4% month-over-month throughout 2018. Rewarded ads As a value-exchanged solution, rewarded ads oﬀers advantages of UX friendliness and high revenue for app publishers, and beneﬁts of full ads engagement for advertisers, at the same time. The rise of rewarded ads in 2018 is predictable.

33. Publisher Social Platform Carriers Media Events Infrastructure Advertising & Marketing Foreign Publishers Mobile Payment Live Streaming Platform Vietnam Mobile Ecosystem

34. Video-Oriented Ad Network Ad Network Ad Mediation Demand-Side Platform (DSPs) Supply-Side Platform (SSPs) Ad Exchange Measure & Analytics Vietnam Programmatic Mobile Ads Ecosystem

35. Adsota, as the official partner of Google and Facebook in Vietnam, pro- vides advertisers with effective solution to achieve high return-on-investment including driving high-quality users and boosting sales performance & brand awareness for businesses. On the aspect of app monetization, Adsota, the official partner of Google Ad Exchange, proudly helps mobile publishers in Vietnam and South East Asia maximize in-app ads revenue. ABOUT ADSOTA cpi User Acquisiton [CPI/CPA, Burst-top, Adsota network, ASO] Traffic Monetization [Official Partner with Google in Ad Exchange] http://adx.appota.com Integrated Marketing Campaign [Media Coverage/Viral Clip/KOLs/Community] Lead Generation Service [The First & Only Facebook Gaming Agency in Vietnam]

36. CONTACT US HEAD OFFICE: Building 11 (LE Building), Alley 71, Lang Ha St., Ba Dinh Dist., Hanoi, Vietnam Tel: (+84) 435 191 618 Hotline (For Advertisers): (+84) 911 983 189 Hotline (For Publishers): (+84) 168 999 1490 Email: sale@adsota.com Fanpage: facebook.com/adsota Twitter: twitter.com/Adsota Website: adsota.com

Vietnam Mobile App Advertising & Monetization Report (2017)

Vietnam Mobile App Advertising & Monetization Report (2017)

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Vietnam Mobile App Advertising & Monetization Report (2017)