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2014

Mobile Users Prefer Ad Engagements Over Paying To Receive Premium Content, New Study Finds

App-based virtual rewards represent growing opportunity within $47.5 billion virtual currency economy

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SAN FRANCISCO, May 21, 2013 /PRNewswire/ -- Tapjoy, Inc. (www.tapjoy.com), a leading mobile advertising and publishing platform, today released the "Redefining Virtual Currency" study, conducted by Yankee Group on behalf of Tapjoy, examining the current state of virtual rewards such as loyalty points, credit card points, airline miles, app-based virtual currencies and more. The study found that mobile consumers prefer to engage with advertisements, rather than paying money, as a means to receive virtual rewards and premium content. One out of five mobile device owners engages with advertising daily in exchange for virtual rewards and premium content, and nearly one in two does so at least monthly.

(Logo: http://photos.prnewswire.com/prnh/20120731/LA49747LOGO)

Alternative payment methods, such as advertising engagements and exchange of personal information, represent a rapidly growing segment of the virtual currency economy, which Yankee Group estimates to have been worth $47.5 billion in 2012 and projects to grow to $55.4 billion by 2017. Advertising engagements represent the fastest-growing segment of this virtual currency economy, projected to grow more than 200 percent to nearly $900 million by 2017.

"Yankee Group's report confirms that mobile is disrupting how consumers want and expect to receive virtual rewards and premium content," said Peter Dille, CMO, Tapjoy. "We expect this virtual currency model will continue to grow through mobile beyond games and into other types of content, such as music, print media and video content."

"Given sizable adoption rates and comfort levels, consumers are clearly expressing that they value virtual currencies, helping set the stage for continued growth," said Jordan McKee, analyst with Yankee Group and author of the whitepaper. "Mobile device owners have demonstrated that they're willing to interact with a brand by exchanging their time (ad-views) and personal data for free digital content. Since users choose to take part in this exchange, the engagement can be far more meaningful and powerful than pop-up, banner or television advertisements. Marketers that opt to leverage this model have the potential to realize robust engagement rates because their mobile audiences view the exchange as worthwhile."

The study also found other evidence of this growing trend, such as:

  • To Pay or Not to Pay: Roughly half of mobile users have paid for in-app premium content (54 percent of smartphone users and 41 percent of tablet users). However, when given the option of paying for content or receiving the same content for free in exchange for advertising, both smartphone users (67 percent to 39 percent) and tablet users (73 percent to 46 percent) preferred engaging with advertising.
  • Free Digital Content is Worth Digital Engagement: Mobile device owners want opportunities to engage with advertising to receive digital content as much or more than physical content. Seventy-seven percent said they would be willing to engage with ads to earn a tablet app. The next most popular items were paperback books (75 percent), tablet in-app premium content (73 percent) and music (73 percent) and smartphone in-app premium content (67 percent).
  • Personal Information as the Emerging Virtual Currency: Mobile users believe their personal information has value, and they are very willing to share this personal information (such as their e-mail address) to advertisers in exchange for virtual rewards and premium content. Many mobile users are already doing so frequently, as 70 percent of smartphone owners and 53 percent of tablet owners have willingly provided personal information to advertisers to receive a paid download of an app.

The study, conducted between February and May 2013, can be read in its entirety on Tapjoy.com or at http://tap.tj/l9hB1.

About Tapjoy
Tapjoy is a mobile advertising and monetization platform whose Mobile Value Exchange model allows users to select personalized advertisements with which to engage for virtual rewards or premium content. Tapjoy empowers users on more than 1 billion devices to watch videos, subscribe to services, install applications and participate in other types of advertisements in exchange for virtual rewards they can use in their favorite apps. Tapjoy's turnkey in-app advertising platform helps developers to cost-effectively acquire high-value new users and monetize their applications, while its powerful advertising marketplace lets brand advertisers reach a global mobile audience spanning more than 116,000 applications. Tapjoy is backed by top-tier investors, including J.P. Morgan Asset Management, Rho Ventures, North Bridge Venture Partners, InterWest Partners and D.E. Shaw Ventures. Headquartered in San Francisco, the company also has offices in New York, Los Angeles, Chicago, Santa Barbara, Atlanta, Boston, Paris, Dusseldorf, London, Beijing, Shanghai, Seoul and Tokyo. For more information, please visit www.tapjoy.com.

© 2013 Tapjoy, Inc. All Rights Reserved. Tapjoy and the Tapjoy logo are trademarks or registered trademarks of Tapjoy, Inc. All third party logos and trademarks mentioned are the property of their respective owners.

SOURCE Tapjoy, Inc.



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