Even though the number of auctions on Smaato's ad exchange (SMX) for the mobile Web increased by 131% in Q1 vs. 109% for app inventory compared to the same period last year, advertisers are quickly shifting their focus (and ad dollars) to app inventory, according to Smaato Chief Strategy Officer Ajitpal Pannu.
"The mobile Web to app inventory shift will probably happen in Q4, as there is a much larger in-flow of advertising dollars," Pannu predicted. "The permanent shift should occur by next year by Q2."
The demand for mobile Web inventory is still strong, Pannu added, but prices will continue to decline as the supply keeps increasing.
"Q4 had a very high demand for mobile Web inventory due to spill-over from online ad spend," he said. "Moving forward, the advertisers are going to get selective about better targeting based on content and categories, which allows apps to compete for those dollars with the mobile Web, and that will create competition and a leveling of price between both mediums."
Pannu declined to reveal the dollar amount of the mobile RTB revenue that has come through SMX, but noted that the company has seen a 459% uplift in RTB spend between Q1 2013 and Q1 2014.
In terms of verticals, entertainment and media sectors continue to generate the highest RTB ad spend in Q1 with 37% of the overall revenue, followed by technology and telecom (25%), business and finance (11%) and consumer packaged goods (8%).
The US is the top ad-spending country with 66% of the total RTB revenue across SMX, followed by the UK (7%) and Italy (3%). Turn showed similar results, although it found Europe to be quickly catching up in mobile ad spend.
"It appears that Europe is following the same trajectory as the US, lagging by about two months," Turn wrote in its report. "So if you want to know what’s going to be happening in Europe in mobile in the remainder of 2014, look at the US."