Q2 2012 State of #Mobile #Advertising - $MM Earnings Call Recap

Notes from Millenial Media’s 2^nd Quarter, 2012 Earnings Call. These are independent notes so I ask you to reference Millenial Media’s, AT&T’s, Verizon’s and Sprint’s Quarterly Report or investor relations to clarify all numbers. I do not have a financial interest in any of these companies and use this conference call report as an outlook as to the market for mobile advertising.  

“All trends point to Rich Media”

Highlights include that all trends are pointing to rich media as it is driving higher CPMs for brand advertisers due to the ads being highly engaging. Millenial sees user access and use of 4G networks as a driver in more rich media adoption and support.

Separately, in their own conference calls, AT&T reported that 1/3 of their postpaid wireless subscribers or approximately 14.36 million subscribers, have 4G capable smartphones while Verizon reported that their 4G LTE service is now available to 230 million people in 337 markets or 75% of the population. 22.2 million or 50% of Verizon’s 44.4 million retail postpaid subscribers have 4G LTE enabled smartphones. Sprint launched 4g LTE service in 5 markets and 15 cities and added 4 4G LTE enabled smartphones to their postpaid subscriber product mix and 2 4G LTE enabled smartphones to their prepaid product mix.

Supply vs Demand

Millenial saw advertising supply outpace demand in Q2. While not commenting on fill rates or average CPMs, they did report that their number of apps they serve to increased 17% from last year and their audience grew by 15% from last year. This outpaced advertiser demand growth.

Brand Advertisers vs Performance Advertisers

Brand vs Performance mix was 60% brands vs 40% performance in Q2. Brands favoring rich experiences while performance favor data and targeting which drove higher CPMs.

Bottom Line

Millenial had 71% growth year over year from Q2 2011 and is raising its revenue guidance for Q3 and FY 2012 from initial estimates.

Bulleted notes:

·       All trends point to rich media

·       Rich media driving higher CPMs for brands

·       4G fuels rich media adoption / support

o   AT&T reported (Q2 2012) 1/3 of their 43.1 million postpaid wireless subscribers, or 14.36 million have 4G capable smartphones

o   Verizon reported (Q2 2012) that their 4G LTE service is available to 230 million people in 337 markets or 75% of the population. 50% of Verizon’s 44.4 million retail postpaid subscribers have smartphones

o   Sprint launched 4g LTE service in 5 markets and 15 cities by July 15^th and added 4 4G LTE smartphones for postpaid customers and 2 phones for pre paid in Q2

·       Q2 Advertising mix of 60% brands vs 40% performance

o   Higher engagement driving revenue for brands

o   Data boosting performance revenue as campaigns are more effective

·       Advertising supply outpacing demand

o   Grew 17% in number of apps

o   Grew 15% in audience

·       76% Y-O-Y revenue growth from Q2 2011

·       Raising revenue guidance for Q3 and FY2012