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The Key to Mobile Programmatic Growth? S2S In-App Header Bidding

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By Kelvin Pichardo, Senior Director, Product Marketing
January 23, 2019

If you are like the majority of app developers and publishers, the following stats will make you giddy with excitement and make you sweat a little.

According to eMarketer, by 2020 mobile ad spend will outpace all traditional media combined and account for 43 percent of total media ad spending. This is the stat which should make you feel all warm and fuzzy at the opportunity this represents. Now these other stats may make your palms sweaty.

Also, projected by eMarketer, by 2020, 90 percent of all digital ad spend will be transacted programmatically and the majority will go to advanced programmatic buying models such as Private Marketplaces (PMPs). Additionally, based on IDC and PubMatic data, 77 percent of the growth in programmatic is predicted to be brand spend oriented. Your sweaty palms are probably due to the fact that your programmatic ad stack consists primarily of a waterfall setup for managing demand from your mostly performance or app install ad networks.

Given that 2020 is officially less than a year away, what can you do to align your business with the growth in programmatic and brand spend? This is where the latest crop of in-app header bidding solutions via server-to-server (S2S) integrations come into play.

Shifting from Waterfall

As programmatic brand-spend grows to represent an increasingly larger slice of the in-app monetization pie, the inefficiencies of the waterfall and current ad network mediation will drive the adoption of in-app header bidding. We saw this trend play out with desktop publishers. Header bidding reached a tipping point for desktop publishers starting in 2015 as brand spend started shifting to programmatic.

By 2018, over 75 percent of US publishers adopted a header bidding strategy. By mediating ad network SDKs in a waterfall, app developers are unable to capture real-time pricing data via parallel auctions or increase competition for their inventory. They rely on historic pricing data to set priorities for monetization SDKs installed on their apps. Increasing bid density requires installing additional SDKs, which lead to increases in app file size and resource drain on mobile devices and data plans.

Additionally, app developers are unable to easily add or remove demand partners without relying on development resources to make changes to their apps and undergoing an app review process. These limitations increasingly restrict app developers’ ability to increase yield and drive revenue in a programmatic world.

Capturing Mobile Dollars in PMPs

Another opportunity for app developers to capture brand dollars comes in the form of PMPs. Brands realize that apps are an excellent medium for reaching consumers. According to an interview by John Egan, Head of Demand for MoPub, brands look to PMPs to ensure brand safety. Even performance advertisers start in the open market and once they find inventory that works, they turn to PMPs to ensure they can secure enough scale or gain an advantage by locking out competitors.

By working with in-app header bidding solutions from omni-channel SSPs, such as PubMatic, app developers gain access to a deep PMP ecosystem. App developers can plug into incremental demands from SSPs’ preferred partnership deals with buyers and access tools for setting up and troubleshooting PMPs.

Focus on SDKs

Mediating ad network SDKs and app install revenue will continue to be an area of focus for developers, growing 65 percent from 2018 to 2020 according to an Appsflyer study. However, with brands increasingly turning to apps to reach consumers, developers have an opportunity to easily capture incremental revenue. A lightweight, server-to-server in-app heading bidding solution offers app developers a gateway to programmatic brand spend which they are currently not set up to maximize.

Want to be Prepared?

Developers gain access to true real-time pricing data via parallel auctions, increased competition for inventory, server-side management of demand partners, and PMP deals and tools. Those that do will be positioned for growth by continuing to leverage existing monetization strategies while easily accessing incremental programmatic revenues. Those that don’t may have a hard time playing catch up as mobile continues to attract brand spend.

No one likes to shake hands with someone with sweaty palms, contact us to find out more about S2S in-app header bidding and our mobile monetization solutions.