Mobile App Programmatic Growth in 2018

Post on March 2, 2018 by Marina Gu

Marina Gu
Marina Gu
Sr. Director, Customer Enablement

In the programmatic ecosystem, our conversations, of late, have focused on header bidding, the shift to server-side, and improving transparency in any tech environment. There is understandable industry buzz about the growth and maturity of advertising technology given the benefits it provides to both publishers and buyers.

For instance, applying header bidding fundamentals with server-side architecture gives you the increased competition and revenue without the latency on the browser. This results in improved access to demand and better monetization. Choosing a server-side wrapper that is also transparent means you and your bidding partners can have confidence in the equitable nature of the auction.

However, most of these conversations about header bidding come with the inherent assumption of display-first monetization. What about header bidding in a mobile app environment?

Where are we coming from and where are we going?

Mobile Web Is Reaping Most of the Gains of Header Bidding. Studies found more than 70 percent of the top 1,000 US publishers used header bidding technology1 as of December 2017 but only 1 in 5 header bidding impressions were coming from a mobile device last year.2

This is despite mobile header bidding driving publisher eCPMs up nearly 50 percent on average.  Publishers are only 20 percent penetrated on header bidding in mobile because these solutions have been limited to a mobile web environment. Thus, the app-first publishers can’t take advantage of the same kind of competition the technology enables.

Larger Opportunity Still Exists with Mobile App. The opportunity is there – even with the increased competition in mobile web. PubMatic saw apps drive overall mobile volume growth through the close of 2017, while mobile web eCPMs rose more than 50 percent YOY globally. In fact, we expect the extension of header bidding into app environments to positively impact pricing, similar to what we have seen with mobile web.3 However, we aren’t there just yet.

Mobile App Environment Still Plagued by the Same Inefficiencies as Two Years Ago. Despite all the gains we’ve made in the desktop world, much of the mobile app world is still running on tag-based waterfall logic. The old waterfall system brings a high cost of latency when you’re making a series of calls and passbacks, not to mention the poor user experience. We also know a waterfall is inefficient from a monetization perspective – it’s why I personally have seen header bidding wrappers greatly impact publisher revenue, in some instances by as much as 50-100 percent, once they implement a solution.

The alternative of SDK solutions doesn’t look much better, at this point. While SDKs are more efficient for the information flow between your app and your demand partners, implementing each bidder’s unique SDK will significantly increase your app load latency, not to mention the heavy lifting required of your development team to complete those SDK integrations.

Given all these downsides, the choice between a multiple-SDK or tag-based setup can be a bleak one.

What’s the alternative?

Ultimately, the same principles of server-side header bidding we’re deploying across desktop publishers can be applied to the app environment.  From a conceptual standpoint, the answer is easy: A single SDK call – which means a single implementation with your engineers and a single point of execution when loading the app – and that SDK can then connect through server-to-server with all of your SSP partners.

This way, your buyers get the richness of mobile app data afforded by an SDK environment and the real-time competition of server-side header bidding. This helps to minimize the impact on your user experience and development resources.

Here is an image of what this could look like:


Server-Side Header Bidding for Mobile Apps

We are at a point where programmatic opportunities for mobile apps are reaching an exciting point. I expect this year we will see technology help publishers realize the benefits of server-side header bidding within apps. To learn more about our wrapper solutions and how we are innovating to provide these opportunities to publishers, contact us.

1 ServerBid, “Header Bidding Index,” Jan 2018
2, 3 PubMatic, “Q4 2017 Quarterly Mobile Index Report”