A survey of more than 600 media, marketing and developer pros revealed their plans for 2010

1. What’s the Hap’s on Apps? State of the Industry Survey Digiday: APPS, LA 12/10/09

2. DM2Events/ DM2Media We want to provide real information on the cutting edge of choices that you need to make in your day jobs – what to make of the latest technologies, which is worth your time and attention, where you can find the resources to help. In that vein, DM2PRO.com has been built as a kind of knowledge base for case studies, video from shows like this, and research studies designed to help you understand the state of the industry in which you participate. Unlike our sister publication digiday:DAILY, it is a paid site, but at just $20/month, one way we can afford to do the work we do. 2

3. Partnership/Methodology Like any good “membership” organization, we rely on practitioners in the field to help us ask the right questions, which is why we turned to Lynn and Quattro. This apps survey is both larger and more granular than the August survey. Uses Quattro’s client lists to expand DM2PRO’s access to the developer community. With a larger respondent set, we were able to see if there were subtle differences between developers who: worked for advertisers & agencies worked for publishers or developed apps as a business developed just social apps, just mobile apps or both mobile and social apps

4. Methodology We were also able to ask developers whose livelihood is based on making apps how they promoted and monetized them. Besides developers, we reached out to essentially the same group of advertisers, agencies and publishers to look deeper into what platforms they were using for mobile and social apps: Specifically, was Android gaining ground against the iPhone? What ad units did they consider most effective? Were they still as satisfied with their apps experience nearly a half year later? How did they feel about ad nets?

5. Methodology Last but not least, we asked the entire group what mobile phone they employed for personal use. (Any correlation between that and the platform for which they developed?) While slicing these groups into more categories reduced the sample size on some questions considerably, we reached an almost equal number of developers vs. advertisers and agencies, and a higher number of publishers overall. We had more than 605 respondents by 12/10

6. +600 Respondents 236 125 244 N=605 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

7. ADVERTISERS AND AGENCIES 7

8. ADVERTISERS / AGENCY / MARKETERS Nearly 130 Agencies replied N=199 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

9. ADVERTISERS / AGENCY / MARKETERS 54% say NO N=234 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

10. ADVERTISERS OR MARKETERS WHO HAVE USED APPS Slightly more dedicated social than mobile agencies/advertisers, but considerably more do both. N=95 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

11. ADVERTISERS OR MARKETERS WHO HAVE USED APPS Facebook leads overall, then iPhone. Own branded community and MySpace rank higher than Android N=95 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

12. ADVERTISERS OR AGENCIES WHO HAVE USED MOBILE APPS iPhone: 95% RIM 44% Advertisers and agencies who develop mobile apps still rank RIM over Android. (Android INTENT is higher among those just planning apps) Android 31% 15% N=39 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

13. PUBLISHERS / ADVERTISERS / AGENCIES WHO HAVE NOT DEVELOPED MOBILE APPS, BUT PLAN TO iPhone: 91% Android 39% 65% plan to develop mobile apps in 2010 RIM 33% 19% N=107 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

14. ADVERTISERS OR AGENCIES WHO HAVE USED MOBILE APPS The top third of this market expects their mobile apps budget to increase by more than 75%, some by greater than 200% N=39 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

15. ADVERTISERS OR AGENCIES WHO HAVE USED MOBILE APPS Bigger market, client demand, more standardization lead as things that could push mobile apps N=41 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

16. ADVERTISERS OR AGENCIES WHO HAVE USED MOBILE APPS More than a third spend less than 5% of their current budgets on promotion. Note that a good 15% spends more than 60%... N=40 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

17. ADVERTISERS OR AGENCIES WHO HAVE USED MOBILE APPS: HOW DO THEY PROMOTE? N=40 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

18. ADVERTISERS OR AGENCIES WHO HAVE USED MOBILE APPS In choosing an network to help place ads in mobile apps, they care about targeting capability first, then reach. N=30 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

19. ADVERTISERS OR AGENCIES WHO HAVE USED MOBILE APPS Engagement and user feedback lead even the number of monthly active users and the impact on product sales as what makes an app effective for advertisers or agencies N=40 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

20. WHAT CATEGORIES OF ADVERTISER IS MOST ENGAGED IN MOBILE APPS? CPG Retail Automotive Entertainment Financial Health/Pharma Media Tech B2B Beverage N=40 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

21. WHAT CATEGORIES ARE LEAST ENGAGED B2B Health/Pharma Media Retail Financial Entertainment Travel CPG Tech Auto N=98 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

22. PUBLISHERS / ADVERTISERS / AGENCIES WHO HAVE NOT DEVELOPED MOBILE APPS All of the above… and 33 write-in reasons! (But many said they’re planning apps in early 2010.) N=82 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

23. PUBLISHERS 23

24. PUBLISHERS Content publishers, 88% N=106 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

25. PUBLISHERS WHO HAVE DEVELOPED APPS iPhone leads even Facebook among publishers who’ve developed apps N=54 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

26. PUBLISHERS WHO DEVELOP MOBILE APPS Majority monetize through ad sales N=53 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

27. PUBLISHERS WHO DEVELOP MOBILE APPS >35% of publishers – in tough times – expect their mobile REVENUES to increase by greater than 50% N=54 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

28. DEVELOPERS 28

29. DEVELOPERS: Mostly Mobile 74.5% 24.1% 1.4% N=214 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

30. MOBILE or MOBILE + SOCIAL DEVELOPERS: Overwhelmingly entrepreneurial ENTREPRENEUR: 83.1% N=178 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

31. DEVELOPERS: IPHONE LEADS FOR PERSONAL USE 60.9% 40.6% 15% 3.4% N=212 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

32. DEVELOPERS DIVIDED INTO: Those who work for agencies or advertisers Those who work for publishers Entrepreneurs (those who develop apps as a business) Ad supported, sold to consumers or either 32

33. ADVERTISER/ AGENCY MOBILE DEV iPhone Dominates, but Android Has Crossed the Critical 60% Mark iPhone: 92% Android: 61.5% Agency employed developers focus most of their attention on iPhone; but 2/3 develop for Android. (Overlap was allowed.) BB 38.5% N=13 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

34. ADVERTISER/ AGENCY MOBILE DEV BUDGETS ON THE RISE Ad/Agency apps budget on the rise; in at lease a couple of cases, substantially. N=11 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

35. ADVERTISER/ AGENCY DEVELOPMENT BUDGETS TO RISE SHARPLY FOR MOST While “advertiser/social” development spending has leveled off, mobile apps development is on a steep incline. With online advertising inching downward, 58% of agency mobile developers expect increases of more than 40%. N=12 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

36. DEVELOPERS WHO SELL APPS &/OR ADS N=147 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

37. DEVELOPERS WHO SELL APPS &/OR ADS iPHONE: 76.4% Android ~57% Ad-savvy developers lean toward iPhone, but Android close behind BB 22% Palm 8.3% N=72 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

38. Developers who sell apps with out without ads: iPhone is about reach, Android has a number of things going for it – including open source – but reach isn’t the least important. N=72 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

39. Developers who build apps for sale: iPhone: Reach and ease of use. Android, ease of use, open source N=25 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

40. DEVELOPERS WHO BUILD APPS FOR SALE: Apps developers care equally about revenue and reputation / user feedback. The lower the score the higher the rating. N=26 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

41. DEVELOPERS WHO SELL APPS/SUPPORT WITH ADS When we turn to ad-supported apps – whether or not they’re sold – age target matters more. N=74 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

42. DEVELOPERS WHO SELL APPS: Developers who sell apps less focused on a particular demographic N=26 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

43. DEVELOPERS WHO SELL APPS W/WO ADS: Few spend more than 20% promoting their apps. N=72 ©2009 DM2PRO.com “State of the Industry: APPS” in collaboration with Quattro Wireless

45. Drive directly to the App Store via click-to-download banners

46. Optimize results in real-time with Q Elevation targeting technology and creative rotation

48. Resulted in more than 12,000 direct Superpages® application downloads with an average CPA lower than $2.60*

49. Overall conversion rate of 3%*

50. Quattro significantly out preformed competitive mobile ad networks in both the scale of impressions delivered, and the CPA for the campaign**

51. Superpages® reached a ranking of #9 in the Lifestyle category from a position outside of the Top 100 and subsequently dropped to a ranking between 80-90***Quattro Wireless campaign performance data ** TM Advertising Superpages® is a registered trademark of Idearc Media LLC 2009

53. Achieve a rapid rise in App Store ranking without a large scale investment

54. Full click-to-download conversion tracking with real-time data allows us to determine what works and what doesn’t in the application ecosystem for a particular app

56. To See the Full Research WWW.DM2PRO.com Melinda Gipson Melinda@dm2media.com WWW.QUATTROWIRELESS.comLynn@quattrowireless.com 46