It’s time for publishers to stop playing chicken with in-app advertising

Post on March 9, 2020 by Paulina Klimenko

Paulina Klimenko
Paulina Klimenko SVP, Corporate and Business Development

Google recently announced that the company removed 600 apps from their Play store and banned the developers from their platforms. The offending apps were kicked out for violating Google’s disruptive ads policy and their disallowed interstitial policy. While desktop content quality has more or less settled into a predictable constant, mobile apps still feel like they’re set in the Wild West.

Yet, our data shows that in-app mobile advertising demand, particularly video advertising demand, is growing steadily. PubMatic’s Q4 2019 Quarterly Mobile Index reports that overall mobile platform spending rose 47% over last quarter, with in-app ads growing 62%.

The report also notes that mobile in-app video ad spend grew 156% from Q3 to Q4 in the Americas, the fastest-growing mobile ad format on the platform. This sizable increase indicates that publishers that take in-app inventory seriously stand to gain significantly. Yet, many publishers haven’t put resources into their mobile in-app ad strategy. The culprit is a “chicken or the egg” kind of problem. Publishers have noted that in-app advertising doesn’t always represent a large enough share of their revenue, and so it doesn’t get high priority on the development schedule.

Focus on In-App Video

In-app video is set to increase in the coming months and years as consumers shift their viewing habits, with long-form content leading the way. The Cisco Visual Networking Index expects that mobile video will account for 79% of mobile data traffic by 2022. These growth numbers alone should get the attention of publishers trying to find new revenue opportunities.

According to a report PubMatic recently commissioned with Forrester Research, which surveyed 622 media professionals, many publishers have not implemented the technology they need to maximize in-app video advertising revenue. Now is the time for an upgrade.

In-app video inventory performs best when publishers use a header-bidding enabled SDK, which can assess all bidders equally without added latency, rather than favor individual buyers in a waterfall-type approach. Publishers new to mobile header bidding may be cautious about adding technology that could slow their user experience, and so they need to find a light-weight offering that enables server-side bidding so they can increase revenue without added latency.

Quality Matters to Advertisers

Stories like the nefarious apps on Google cause brands to be a bit more cautious when buying in-app ad inventory on the open exchange. We’ve seen high demand for programmatic direct deals, where brands have more control over the buy and have more visibility into the environment where their ad runs.

Publishers can do a lot more to help brands and attract new media spend. In addition to adopting header bidding SDK technology to maximize demand, publishers also need to show they care about quality and transparency. There are two key investments publishers can make into their in-app business to help attract more buyers, app-ads.txt and support for the Open Measurement SDK.

The IAB created the app-ads.txt initiative to help protect buyers against buying fraudulent traffic or buying through exchanges that are not authorized to represent a publisher’s inventory. The initiative also helps publishers retain the value of their content. By implementing app-ads.txt, publishers ensure that any media spend intended for them actually goes to them, rather than a counterfeit publisher. It’s a win-win for buyers and sellers alike.

The IAB created another standard called the Open Measurement SDK for brands that care about in-app quality. This SDK makes it easy for third-party verification vendors like MOAT or DoubleVerify to measure video completion and viewability, and report back transparently to brand clients. Many brands are looking to set up programmatic direct deals with publishers for transparent inventory that is enabled with the Open Measurement SDK and supports apps-ads.txt files. So publishers who haven’t implemented either will not be able to tap into these brand budgets.

Be a Leader and Get Rewarded

In our recent global summit, executives from major agencies like Dentsu and Publicis came on stage and noted their frustration with lack of transparency in mobile in-app inventory, particularly video. Too few publishers have implemented the valuable technologies that maximize programmatic buyer demand and signal a commitment to quality.

Consumer behavior has already shifted to mobile, and advertisers want their dollars to follow. With so many publishers still lagging behind, the ones that do commit to in-app excellence will be rewarded.

Paulina Klimenko, Senior VP Corporate Development & GM of Mobile, PubMatic

About: The PubMatic platform empowers independent app developers and publishers to control and maximize their digital advertising businesses and enables advertisers to drive ROI by reaching and engaging their target audiences in brand-safe, premium environments across ad formats and devices. Headquartered in Redwood City, California, PubMatic operates 14 offices and nine data centers worldwide.

Originally published in WNIP