How OEM Advertising Has Evolved Over the Years?

Authored by Rohit Arora, VP Mobile, Xapads Media

A viable and lucrative alternative to traditional play stores, OEM Advertising is becoming a talking point as it is slowly revolutionizing the mobile app ecosystem. Over the years their market share has gradually risen and in Q1 2021 globally renowned OEM app stores accumulated a global market share of 42%. This is because OEM inventories are associated with a quality audience pool and decreased fraud risk making them a cost-efficient deal for every advertiser. 

What is Advertising over OEM?

In the smartphone universe, OEM or Original Equipment Manufacturer refers to brands, such as Samsung, Oppo, Vivo, Xiaomi, and over the years they have further developed their own app stores that help gather audience data sets and real-time insights. This can help advertisers gain quality user acquisition, premium ad placements while generating leads and giving product recommendations in a fraud-free environment. All these factors give an extra edge to brands showcasing on OEM-based play stores as they manufacture their own devices inbuilt with pre-defined features and technicalities that enable advertisers to target the broader untapped potential audience. 

How did the Evolution of OEM Advertising happen?

The mobile app market is dominated by two major app stores Google Play Store and Apple App Store and in 2021 they offer a staggering 5.70 million apps. OEMs are an alternative to these, though with a slightly smaller reach but they are slowly carving a niche in the market. This gained momentum in 2010, when Google Services & Play Store became unavailable in China due to their internal policies. This left a broader void in the smartphone market and different brands utilized this opportunity as China had the most populated internet and smartphone usage that is now close to 911.92 million users as of May 2021.  To keep up with Privacy related concerns, like Google & Apple, Huawei too had introduced its own OAID (Open Ad Identifier) when its operations were restricted in the US and this globally worked well for Huawei as 218 billion apps were downloaded in 2020 with approx. $143 billion in consumer spend and time spent on apps grew 20% Y-o-Y. 

Since its emergence, OEMs have come a long way due to their economical models that have increased their global penetration and presence. The pandemic also accelerated this adaptation because, in 2019, the total number of global smartphone users were nearly 2.7 billion that became 14.02 billion in 2020 and is expected to reach 18.22 billion by 2025. Owing to this, it is gaining momentum and these smartphones are most sold in emerging markets which helps their own App stores increase their consumer base rapidly. 

Why is OEM Advertising gaining advertiser attention and popularity? 

OEM advertising has completely transformed the digital marketing approach with quality ad spends which has inspired advertisers to shift towards incorporating better branding and performance opportunities, here’s how:

Intended Audience Targeting: Advertisers gain a better audience pool with more targeting options as it provides them with users’ history and insights, behaviour and buying pattern, time spent by users, price of the device and various associated actions. This has enabled advertisers to draw user attention towards campaigns and target them with lookalike inventory. 

Better ROAS: OEM Advertising breaks down the frequency of Ads allowing advertisers to optimize personalized campaigns based on the user’s behaviour, reallocating their marketing mix while tapping into demographics that interact with the specific inventories. This also helps advertisers to rationally use ad spends and to reap incremental ROAS and results in high-quality reach with better campaign performance.

Brand Safety & Hygiene: Advertisers while using OEMS Adverts are exploring an absolutely fraud-free environment with real-time active user acquisition. This happens because there is complete transparency and no middlemen which means the ad placement is fully controlled by the advertisers.  

App Discovery & Promotion Opportunities via OEM: Most of these integrated app stores provide interesting deals to advertisers in featuring their app tailored to a user’s interest. It does so to gain advertisers’ trust in becoming their preferred primary platform for app promotion amongst the targeted niche. They also cater to many multi-themed requirements included but not limited to RMG Apps, Short Video Apps, Social Media Apps that usually revolve around a specific target audience. 

This is just the beginning of Advertising over OEM Partners, with more technical updates and upgrades this is bound to remain one of the most engaging Advertising modes. With more power to Advertisers and App Developers, this medium ensures relatively high and better ROAS and also allows them to target wisely into the untapped market. With a higher emphasis on Privacy and User Penetration, OEM Advertising will play a very important role in the future of advertisement. 

DISCLAIMER: The views expressed are solely of the author and does not necessarily subscribe to it. 


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