As the world’s most mobile-centric region, APAC stands at the forefront of mobile app innovation. Recognizing the immense potential and unique complexities of the mobile landscape, we recently held a conference that included some of the leading mobile publishers from diverse backgrounds across APAC. I was very fortunate to have engaged and had insightful discussions with them and want to share some of my thoughts.
Navigating Internal and External Challenges
Mobile publishers are currently navigating a turbulent landscape with challenges both internally and externally. Macroeconomic pressures, such as inflation, have significantly impacted consumer spending, resulting in a decline in in-app purchases and reduced marketing budgets. Consequently, apps relying on performance ads (i.e. rewarded videos) are having challenges with declining demand budgets for user acquisition. Industry-wide obstacles compound the situation, with heightened competition intensifying user acquisition efforts, decreasing display ad CPMs according to some publishers and the impending deprecation of device IDs posing a threat to targeted advertising.
Internally, many mobile companies face organizational challenges; as they have grown, they have started to struggle with effective communication, which has hindered adaptability and swift decision-making. Additionally, talent retention has proved challenging for many companies amid macroeconomic uncertainty, further complicating efforts to enact necessary changes to stay competitive in the dynamic mobile landscape.
Diversifying Revenue Streams
As the age-old maxim goes, “never put all your eggs in one basket”. It is well known that branding advertising has the benefit of being less disruptive to the user experience, is generally of higher quality and leads to better user retention. Accordingly, many of the mobile publishers at the event said they have started to diversify their revenue streams away from solely running performance ads. However, challenges persist, especially for publishers in regions like China and South Korea, where mediation platforms are prevalent. To address this, publishers have employed the tactic of establishing a separate bidding path dedicated to brands within their setups, facilitating auction packages and private marketplace deals.
Moreover, fostering direct communication between sell-side and buy-side stakeholders is crucial to educating buyers about the inherent value of mobile ads and the immense potential of mobile users. By better understanding of the metrics and needs on the other side of the fence, both sides can optimize strategies to maximize mutual benefits and grow mobile app brand advertising.
Addressability: The New Challenge
Most mobile publishers at the conference said they are proactively responding to the privacy regulation and data protection measures from governments as well as Apple and Google. Deprecation of Apple’s IDFA led to a decrease in CPMs on iOS traffic and higher user acquisition costs, leading to lower lifetime value. And while attendees acknowledged that it will be essential to adapt to Google’s Privacy Sandbox initiative, many are waiting until timelines and specifics are more clear before taking action.
However, alternative IDs have not yet been widely adopted in APAC due to the complexity of the mobile environment. Some publishers, such as casual games and utility apps, are encountering difficulties in collecting logged in user data. But notably, publishers embracing Google PPID and UID 2.0 have witnessed 30% uplift in eCPM. As a result, strategies to collect email information are being carefully considered. Some casual gaming publishers have yielded promising results when combing first-party game data with third-party probabilistic data.
Additionally, buyers are expecting more signals (ie contextual data) from app publishers to target audience more precisely and enhance the campaign performance, which is being enacted by many of the publishers.
Cultivating a User-Friendly Ad Environment
App developers are struggling with the balance of ad monetization and user experience. The IDFA policy shift has highlighted significant disparities in opt-in rates among different apps, one of the casual game publishers experienced players exhibiting greater receptiveness to ad opt-in as a result of user education. According to PubMatic’s research, opt-in users result in 2.7x higher eCPMs than those who are not opted-in. Educating app users about the advantages of opting in for ads is essential, as it enables them to access more relevant content for an enhanced experience. Publishers also need to gain a deep understanding of user profiles to deliver tailored advertising models or content that resonates with their audience.
In addition, publishers at the event expressed that ensuring that advertising demand remains premium and secure is paramount to safeguarding the overall integrity of the user experience. PubMatic prides itself in working with the world’s leading agencies and brands to ensure a higher standard of ad quality, and has a dedicated team to provide controls over ads. As one of the examples, PubMatic’s RTAS (Real-Time Ad Scanning) infrastructure interfaces with Confiant to scan every ad creatives’ technical problems, including but not limited to malvertising, heavy loading, video errors and undeclared audio.
Closure
While it was recognised that challenges exist with increased competition and the changing addressability landscape, the mood amongst publishers was buoyant with everyone excited by the prospects that new brand advertising bought and intent to build deeper relationships with their users. It was also acknowledged that they can leverage relationships with tech partners like PubMatic. Taking the example of audience targeting, PubMatic’s Connect provides access to automated audience levers that simplify workflow and freeing up teams to focus on strategic initiatives and higher-value tasks. By working with the right ad tech partner, these publishers can stay ahead of the ever-evolving industry as well as unlock new avenues for growth and innovation.
