The Promise of In-App Programmatic Advertising for App Developers

Post on May 8, 2019 by Kelvin Pichardo

Kelvin Pichardo Senior Director, Product Marketing

The automation of tasks has long been a cornerstone in business development, from windmills, to clocks and watches, to robotic arms on an assembly line, and beyond. However, in today’s tech-driven world, automation is key to speed, consistency, and efficiency. We may not be able to stay at home and watch TV while machines do all of our work for us (yet!), but we can embrace emerging automation technology in the advertising sphere with in-app programmatic advertising.

Growth of Programmatic Advertising

The emergence of programmatic advertising over a decade ago meant that the automated sale of digital ads replaced the humans who would traditionally be caught up with menial tasks like RFPs, ad tagging, negotiations, and insertion orders. With automated bidding on ad inventory, programmatic advertising allows for improved efficiency, increased campaign ROI for buyers, increased yield for publishers, improved targeting, greater reach, and real-time measurement. For app developers, in particular, programmatic allows you to gain incremental revenue for unpurchased inventory after direct buys.

Brand Spend Shifting to Programmatic

As the modern consumer spends more and more time using mobile platforms, we see a corresponding shift in brand spend to mobile advertising. While almost 85 percent of all digital ads are transacted programmatically, two thirds of those budgets are going to mobile with an anticipated growth of over 21 percent in mobile programmatic advertising by 2020. In fact, eMarketer reports that demand for mobile web display ads are declining alongside standard desktop display ads. The real momentum is being carried by in-app, video and native ads, and it doesn’t show signs of stopping any time soon.

Forrester reports that over 90 percent of decision makers expect their investment in in-app advertising to grow over the next year. Furthermore, the same surveyed marketers report that programmatic in-app advertising makes it easier to target intended audiences and therefore generates more effective customer engagement.

Therefore, this improved targeting and engagement is driving more marketers to programmatic advertising. In particular, mobile video ad spend is growing exponentially, worldwide. According to our Q4 2018 Quarterly Mobile Index data, the Americas saw an almost 100 percent year-over-year increase in mobile video ad spend and the APAC region saw an almost 1000 percent increase in mobile video ad spend.

Why App Developers Should Consider Programmatic Advertising

With the shift in brand budgets and the potential for increased revenue, it is vital that app developers adopt innovative monetization strategies to capitalize on the revenue opportunities. Developers would benefit from moving beyond inefficient options, like the waterfall, and moving to server-side (S2S) header bidding.

Based on data from PubMatic’s platform, in-app header bidding saw a 300X increase in impression volume YOY in 2018. With this growth, it is important that app developers not only continue to evolve with market trends but they choose a monetization partner that will provide monetization and quality benefits.

By leveraging header bidding solutions from omni-channel SSP, for example, app developers can also gain access to in-app private marketplaces (PMPs). Developers who take advantage of the technology and strategic partnerships will be well-positioned to attract programmatic brand spend.

Moreover, without exposure to programmatic selling, app developers may find their valuable inventory being spoofed, with buyers believing they are accessing an app’s inventory when in fact the traffic is coming from elsewhere. In this case, the app developer faces an opportunity cost with a demand for their inventory but through spoofed supply. This situation also highlights the importance of app-ads.txt files, which would tell the buying world that inventory from the app is legitimate and all other supply sources are unauthorized.

Key Benefits for Developers

For app developers, there are three key benefits they can reap from selling their inventory programmatically. First, developers can reap incremental revenue from adding an SSP partner to their mediation stack. Secondly, developers can benefit from increased global reach. Working with a partner who has regional end point locations will speed up your ad delivery thus helping you monetize your traffic more effectively. Finally, programmatic can improve fill rates without requiring you to integrate with more partners. With increased bid density and thus more competition, this will drive up eCPM prices and result in more revenue for you.

What’s Next?

PubMatic’s goal is to empower independent app developers and publishers to control and maximize their digital advertising businesses. There is great opportunity for app developers if they can tap into innovative programmatic advertising solutions and we are here to help. For more information, check out our mobile solutions page or contact us.