Modern performance marketing is no longer limited to paid placements on Facebook or Google Ads, as there is an alternative. Android mobile phone manufacturers have built their own advertising platforms as a part of the operating system. There is a list of predominant factors suggesting that OEMs are going to take the leading role as User Acquisition channel in the next couple of years.
It is high time the marketing experts who have never heard about OEM paid attention, since it is about to become ‘the new black’ of performance marketing – here’s why.
OEM: The new black in UA
OEM stands for Original Equipment Manufacturer. If we talk about Android phones, manufacturers offer advertising placements on their phones which are integrated in the pre-installed operating system. The share of the OEM advertising market depends on the popularity of Android phones and their sales volume in the region.
In 2021, Android mobile phone manufacturers were building up their global presence. They increased the number of shipments, focused on improving brand awareness in local markets and adjusting their pricing policies.
Q1 2022 established a strong position of Android smartphones globally. According to new research from Strategy Analytics, Samsung became the global smartphone market leader with a 24% share and shipped 75 million units in Q1 2022. Apple was the second with 18% share. Xiaomi, OPPO (including OnePlus) and Vivo stayed in the top five list.
Another factor that indicates OEM market growth is the launch of new online mobile platforms that generate OEM traffic. These platforms can be broken into three categories:
- Recommended ecosystems are the first type. They are integrated in the Android operating system at the hardware level via a system app (APK). These OEM channels provide on-device traffic without turning to any third-party solutions.
- The second type is advertising platforms that purchase traffic from manufacturers by integrating it with third-party technology platforms (SSPs). OEM traffic may not be the only type of traffic in these sources.
- Lastly, the third category is the platforms of Android smartphone manufacturers such as Xiaomi, Huawei, Oppo, Vivo and others.
The cost of OEM traffic will not always be the cheapest when working with original manufacturer ad platforms. Advertising platforms provide different types of optimisation and pricing policies – it is possible that similar traffic will be cheaper there.
OEM advantages in the UA market
OEM-channels often get confused with in-app traffic sources. Sometimes they are said to have the qualities they don’t possess, e.g. ad fraud. That is incorrect because OEM traffic is fraud-free thanks to its design and user experience.
The technical stack of an OEM channel is either a direct channel, or an APK solution, or SSP that delivers traffic directly from a manufacturer to a user. The first two OEM channel designs deliver traffic from the manufacturer directly to the user: this means that OEM channel traffic is transparent and easy to track.
The high transparency of OEM traffic and, therefore, the reliability of forecasts help OEM ad campaigns reach their performance goals more easily.
The performance of OEM advertising is similar to organic traffic because:
- OEM ad messages look authentic and are a part of Android user interface.
- Users trust the brand, therefore OEM advertising is not overlooked when they get exposed to it as a part of their user experience.
As a result, the average CR per installation and CTR of OEM traffic is higher than that of other in-app sources.
Not everyone will be taken into the future: market visions
According to Business of Apps Android has a staggering 75% global market share with 2.8 billion active users worldwide.
The OEM market is growing thanks to Android manufacturers actively expanding into the global market – in particular, in the last two years in the US and Europe.
For example, in Q2 2021 Xiaomi shipped 12.7 million smartphones to Europe, which resulted in becoming thу top-selling smartphone brand in Europe with a 25.3% market share. In the meantime, Vivo has announced its exclusive sponsorship of the Fifa World Cup 2022. AVOW reports that OEMs already have a 45% market share in Europe and the US and it keeps growing.
As we know, Android manufacturers are predominantly brands of Asian origin. In the global market of mobile advertising OEMs develop as a response to the monopoly of Facebook and Google, whose reputation has been tainted by, among other things, country-level scandals on GDPR issues.
In contrast, OEMs are transparent about traffic attribution and follow GDPR policies, thereby making OEM advertising even more attractive to advertisers in the US and Europe.
While Android market share keeps growing in Europe and the US, it has already reached 85% market share in Brazil, India, Indonesia, Turkey and Vietnam.
The data indicates that OEMs hold a strong position in the global smartphone market. The OEM market is developing due to the variety of advertising OEM platforms available these days. The latter provide new solutions to advertisers, including product and financial ones.
Advertisers should be getting OEMs on their radar as they are rapidly growing and set to become a really promising part of performance marketing in 2022.