Today’s post is a guest blog from Rob Beeler, Chair of AdMonsters and Managing Editor of Research for The 614 Group
Just in time for the biggest mobile event in the digital media and advertising industry, Mobile World Congress, The 614 Group is releasing two chapters from its latest research report, “A Journey Into Mobile Monetization.” These two chapters, titled “The State of Mobile Creative Elements” and “The Exchanges and SSPs,” highlight a number of key insights from The 614 Group’s in-depth research on the ever-evolving mobile advertising ecosystem.
Below we’ve outlined three key trends we identified while writing this report that we believe will be of particular interest to publishers and advertisers actively buying and selling mobile inventory programmatically. We uncovered these insights by conducting in-depth one-on-one interviews with representatives of five of the largest mobile monetization companies, including PubMatic, AerServ, AppNexus, OpenX, and Rubicon Project.
Through our analysis, we learned that:
- Mobile Header Bidding Has Arrived.
All of the companies interviewed for this report have implemented a header-bidding solution for mobile inventory across both mobile web and mobile apps. Although interviewees provided “comprehensive answers as to how their companies approach a pre-bid or a democratized auction process for the mobile channel,” our report found that there are differences in how the market will develop in practice.
When I asked PubMatic Vice President of Product Management Evan Simeone about this trend, he had the following insights to share with regard to PubMatic’s mobile header bidding solutions:“
Since 2012, PubMatic has had a robust header bidding solution that spans multiple environments, including mobile. We have both a header and a wrapper solution, which can contain the header tags from other providers. In the mobile environment specifically, there are two classes of inventory—mobile web and mobile app—with a few differences between the two. [PubMatic] can support the tag in mobile web, since it has a header in which to place the tag. Mobile app requires an API and server-to-server connection, which we support for the header right now, and are in the process of releasing a server-side wrapper solution as well.”
- Non-Human Traffic, Viewability & Transparency Remain Challenges, While Ad Blocking Has Little Mobile Impact.
According to industry estimates, mobile app fraud can cost advertisers up to $350 million per year, making brand safety a major concern for publishers and advertisers alike as they choose an ad tech partner for mobile. At the same time, even with various reports finding up to 25% of mobile devices having ad blocking software installed on them, none of the mobile ad tech providers interviewed for this report feel that ad blocking has had any significant impact on their business, and many believe that creating a better user experience will solve any ad blocking problem that does exist.
With regard specifically to transparency in the mobile ecosystem, Simeone shared the following insight with regard to PubMatic’s role:
“Transparency levels are set by the publisher… They certainly have the capability to be open to everyone if they choose, or to be transparent to some buyers and completely opaque to others, or in between. We do recommend more transparency, and some buyers are only interested in inventory that is wholly transparent. Some large, premium publishers are reluctant to offer full transparency, preferring to monetize through indirect channels at a lower rate as a tradeoff. But it’s entirely up to the publisher.”
- Publishers Are Still Testing Some Aspects of Mobile.
While certain aspects of mobile such as curating demand have become table stakes for mobile monetization partners, there are other areas where publishers still are looking for better performance. Our report found that many mobile publishers are disappointed in the CPMs for app inventory—interesting in light of other industry research that has found that mobile app inventory garners significantly higher CPMs than mobile web. According to our analysis, these low app CPMs could be the result of a number of factors, such as desktop publishers attempting unsuccessfully to port the same strategies they’ve used over to mobile, but the fact remains that mobile app CPMs at times are higher than their mobile web counterparts.
Of course, monetization strategies for desktop versus mobile are very different, as are strategies for monetizing mobile web versus mobile apps. Evan Simeone commented:
“The biggest difference between mobile app and mobile web is the audience targeting capabilities. The mobile web—specifically the iOS and Safari browsers—doesn’t support cookies, which makes it more difficult to target distinct audiences, a key driver of value in RTB-based monetization. There are a number of approaches to solve this problem, such as first-party cookies, partnering with the publisher, different demand partners, ad solutions that do cross-device targeting and so forth. We’re working with a number of partners on the demand side to support their standards, but it’s still a fragmented situation in the market at this point. There’s a different set of issues in mobile app, where you can have a device ID—not available for mobile web—and in general you can solve for these problems.”
To find out more about The 614 Group and download their latest reports from “A Journey Into Mobile Monetization,” please visit their library page at www.614group.com.
Rob Beeler is Vice President of Content and Media for AdMonsters and has worked in Ad Operations for over 15 years. Rob oversees the development of content for AdMonsters events and is Editor in Chief for AdMonsters.com.