GUANGZHOU, China, April 16, 2020 /PRNewswire/ -- According to Mobvista's (01860.HK) 2019 financial report, Mobvista earned USD 500.3 million in revenue in 2019. Revenue from its programmatic advertising division reached USD 320 million, with year-on-year growth of 40.8%, further strengthening its role as a core growth engine; net adjusted profits reached USD 41 million, representing year-on-year growth of 16.1%.
In the context of slowing global economic growth and weaker advertising demand, it was not easy for Mobvista to achieve such results in its first year of listing.
It is also worth mentioning that on the same day as the release of the annual report, AppsFlyer, an independent mobile marketing analytics platform, released the AppsFlyer Index Edition X, a comprehensive report on the top-performing advertising platforms in H2 2019. In this report, Mintegral, Mobvista's programmatic advertising platform, ranked 6th on the Global Performance Index, making it the first time that a Chinese advertising platform had ever reached the global top 10 rankings.
What contributed to this achievement?
1. The "Flywheel Effect" and how programmatic advertising became the core growth engine
In 2019, the revenue from programmatic advertising reached USD 320 million, representing a 40.8% year-on-year growth and accounting for 64% of business revenue in 2019, up from 52.3% in 2018.
Programmatic advertising has been the strategic focus of Mobvista in the past few years.
In 2016, Mobvista focused on programmatic advertising through its platform Mintegral. This strategic transformation has proven to be correct, given Mobvista's rapid business growth since then.
In addition to revenue growth, Mintegral's strength was also recognized by third-party attribution platforms. According to the H2 2019 AppsFlyer Index report, Mintegral went from 13th to 6th on the Global Performance Index, further boosting its market recognition and brand value.
American and European companies typically monopolize AppsFlyer's biannual index report. With Mintegral placing 6th on the Global Performance Index, it marks the first Chinese company to enter the global top 10 list.
What are the reasons behind Mintegral's rapid growth?
First of all, this can be attributed to the flywheel effect of the programmatic advertising industry. As the number of apps accessing the platform increases, more advertisers are attracted to join as more of their needs are being met there. More advertisers mean better monetization opportunities, which in turn entices more app developers to join.
Thanks to the flywheel effect, on the one hand, Mintegral gained access to high-quality developers through incentive schemes; on the other, it improved the ROI for advertisers and obtained higher advertising budgets through continuous investments in technology. By combining high-quality traffic and technology, Mintegral was able to put its flywheel in motion exceptionally quickly. From 2016 to 2018, Mobvista's programmatic advertising revenue grew from USD 80 million to USD 227.3 million.
Since April 2019, Mintegral has gradually integrated with major mediation platforms, which changed its pattern of one-to-one traffic expansion and triggered an explosive growth in traffic. In the second half of 2019, Mintegral's number of partnered apps increased by 15,000 and the number of DAU devices reached increased by 120 million, which is three times the increase in the first half of the year.
There are two main benefits to these integrations. First, costs for developer incentive programs have been drastically reduced, with only USD 6 million for the second half of 2019 and USD 9.5 million for the first half of 2019. As a result, these costs went down from 9.8% of the programmatic advertising revenue in 2018 to 4.8% in 2019.
Secondly, the integrations accelerated Mintegral's operational momentum. With more apps joining the platform, the increased traffic meant more data collection, advertising algorithm optimization, and advertiser ROI improvements. Positive feedback generated by these results also indicated higher advertiser budgets. In the second half of 2019, Mobvista generated USD 194.5 million in programmatic advertising revenue, corresponding to a 53.3% month-on-month increase.
With the rapid growth of the global programmatic advertising market, Mintegral's growth flywheel will become a vital engine to support Mobvista's growth for a long time.
2. Focusing on the global market with rapid growth in revenue in Europe and America
In addition to the flywheel effect of programmatic advertising, globalization is another reason for Mobvista's growth.
The logic is simple. What happened to Chinese companies in the recent past will be repeated in many other countries. As more overseas companies go global, Mobvista will also benefit from new growth opportunities.
As of the end of 2019, Mobvista had set up offices in 16 cities around the world and had customers in more than 60 countries. With the development of the overseas markets, its income features geographical diversification with a balanced distribution of revenue between domestic and global customers.
Mobvista's revenue streams are derived from China, the U.S., Europe, the Asia-Pacific Region and the rest of the world. Chinese customers remained the primary source of revenue with USD 291.1 million in 2019, accounting for 58.2% of total business revenue; the revenue growth in Europe and the U.S. grew by 74.2%, with the share of total revenue increasing to 28.1% from 18.6% in 2018.
There were two reasons for this rapid growth in Europe and the U.S. First, Mobvista promoted its global localization (Glocal) strategy by continuously investing in European and American markets for the past two years. Thanks to its localization teams, Mobvista has improved the breadth and depth of its services to local customers.
Second, the Asia-Pacific region, including China, has increasingly become a target market for developers from Europe and the U.S., attracting mobile advertising budgets from all over the globe. Mobvista's previous strategy of focusing on the Asia-Pacific Region gave it an edge. As a result, many developers from Europe and the U.S prefer to use Mobvista as their primary choice for entering the Asia-Pacific market.
In addition to the mature markets in Europe and the U.S., Mobvista has also seen success in emerging markets. In 2019, the South America office in São Paulo, Brazil, was launched to continue to advance its Glocal strategy.
3. What does the future hold for Mobvista in this new digital age?
Mobvista's programmatic advertising business growth and the promotion of its Glocal strategy are inseparable from its investment in technology.
Over the past three years, Mobvista has invested USD 76.6 million in R&D, corresponding to over 6% of business revenue every year. To accelerate the adoption of technology that can be reused, shared and iterated, Mobvista focused on building central technology platform architecture. In the short term, central technology platforms enable existing businesses to improve their operating efficiency further; in the long run, they have enormous commercial possibilities.
The central technology platforms have enabled businesses to expand their commercial boundaries since 2019.
In July 2019, Mobvista joined the AWS Partner Network with a series of technical solutions available within the AWS marketplace; Mobvista also joined the AWS SaaS Factory Program to provide its capabilities across SaaS platforms.
In September, at the Yunqi Technology Conference, Mobvista and Alibaba Cloud jointly released SpotMax, a flexible cluster management platform. Over the past two years, SpotMax has saved over 60% in server costs for each server request, with Mobvista saving tens of millions of U.S. dollars as a result.
Behind the business growth mentioned above lies the long-term value of central technology platforms. This has changed Mobvista's role in the digital age, as the company previously relied solely on advertising and advertising technology to further innovation.
Following the brand upgrade, Mobvista is now positioned as a technology platform that provides comprehensive services to mobile developers around the world. By changing its position from an ad network to a technology platform, Mobvista is now able to connect more diversified services through technology.
How does it work? Mobvista is building a "tooling ecosystem" to help developers achieve global growth. From data analysis to acquisition, monetization, data management, and cloud architecture, Mobvista provides developers with full-lifecycle technical solutions.
For example, a developer's newly launched product must first undergo user behavior analysis for further improvements. Once the developer gets a specific user base, they need to look at monetization, user acquisition, and continuous iterations to achieve growth. Take game developers as an example. Mobvista's data analysis platform GameAnalytics can provide insights into a gamer's entire lifecycle behavior, which can help developers improve their products and create complex user profiles to improve their acquisition and monetization efforts.
With an increasingly deeper understanding of how to achieve growth, some developers are starting to build data centers, bridge the boundary between user data and growth, and improve their marketing automation efforts. Mobvista can help developers link data to growth, further increasing their growth potential.
In the cloud computing era, with constant user base increases, major developers need to focus on server cost optimization. This is where Mobvista's SpotMax can be utilized, as it serves as a cost optimization tool for developers' cloud servers.
Developers have different needs at different growth stages, which is why Mobvista strives to generate value at each step. By using its tooling ecosystem, Mobvista maximizes the developers' growth opportunities by offering the right tools for each stage.
Therefore, in Mobvista's 'tool ecosystem,' there is a clear growth curve' that runs through the overall logic. As shown in the image above, as the scale of developers expands, although the number of developers decreases, their needs at different lifecycle stages also broaden. What's more, Mobvista can empower small and medium-sized developers to use more efficient tools at earlier stages. As a result, there will be more players at different points on the scale, and by raising the lower limit of the curve, the market share increases. This curve can be summarized as a 'tooling ecosystem for enabling growth.'
As Mobvista's Co-founder and President Clement Cao explained, the Mobvista digital ecosystem strives to be a digital roadmap for our clients, guiding them along the way to their business goals.
This is Mobvista's new journey.
SOURCE Mobvista
WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?
Share this article