China Mobile Ad Market Deep Dive

果 合 CHINA MOBILE AD MARKET DEEP DIVE guohead.com Jan - Jun 2011 80% of ad impressions come from 10 regions 29% 16% 9% 7% 5% 4% 3% 3% 2% 1% Zhejiang Sichuan Guangdong Taiwan Macau Hong Kong Shandong / Top 5 regions cover the most prosperous areas of China | Smart-phones are more popular in economically-developed regions / Such distrubution is likely to remain in the short run ioS ad impression weighs over Android by 16% 58% 42% | iOS has largest mobile app store with high-quality mobile apps that attracts more user interaction | Such situation will change with rapid growth of free apps on Android Apple receives 58% ad impressions among all device makers 58% * LG, Sony Ericsson, ZTE & other brands 11% 15% 8% 5% 3% hTC SAMSUNG Others* / ios platform delivered over half of the impressions in 1H2011 / Leading Android phone makers such as HTC have proven their mobile ad values in China / With Google's purchase of Motorola, such situation might face new changes Smart phones have larger click-through rates than tablets 2.87% / Screen size is a key driver for click-through on 2.65% mobile devices / Android phones and iPhones with a screen size of 3-4 inches have the highest click-through rates / Tablets will be the best carrier for mobile ad due to 0.47% its display advantage Phone Android Pad Apple iPad 3-4 inches 7 inches 10 inches Mobile ad impressions on all tablet devices kept increasing iPad 2 launch 5.8% 4.8% 4.0% 4.2% 2.9% 2.3% 19 6A / iPad and Android tablets develop fast and thus will bring critical changes to mobile advertising / iPad accounts for 98%+ of total impressions in 1H2011, with Android tablets quickly catching up / Better formats of mobile advertising are yet to be developed * Tablets including iPad, Xoom, HTC Flyer & Galaxy Tab Mobile ad impressions have no significant peak time compared with LBS/SNS activities 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 10 O 13 11 17 O 19 20 21 15 16 23 O 22 Mobile ad impressions LBS / SNS activities | Mobile ad impressions scatter within the day relatively evenly / Impressions concentrated after lunch and dinner time, as supplement of LBS/SNS activities / Mobile campaigns that integrate LBS/SNS and mobile ads will provide a more complete coverage Prime time" clicks account for 60% of total 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 11 O 10 13 14 15 17 G 16 19 20 21 22 23 | Click-through rates range from 1.5% up to 3.0% during a typical day / Prime time for mobile ad clicks is 19:00-24:00, hours between dinner and sleep | Advertising plans should be developed with careful analysis of user habits and timing http://guohe ad.com/ Beijing Shanghai Jiangsu Liaoning Shaanxi