In this Sounding Off-Thought Leadership column Patrizio Zanatta, Managing Director, Latin America at Rubicon Project makes a case for the trading of premium mobile inventory through programmatic buying platforms.
It may come as a surprise to some, but until recently the ad network model still dominated mobile advertising.
Just as in the desktop world of old, the way this usually works is as follows: third parties aggregate inventory, and sell it on blind and in bulk, often taking up to a 50% cut of CPMs. Buyers have no guarantees around where their ads appear, and sellers lack control around how their inventory is priced or packaged.
In many ways, the automated advertising technology that’s now replacing the ad network model (also known as programmatic or real-time bidding) is the polar opposite of that approach.
Why the Opposite?
Automated advertising is completely transparent. Buyers can view seller URLs and select which sites or applications they do or don’t want their ads to appear on. What’s more, even the openRTB protocol which automated advertising rests upon is transparent, public, and evolves under the guidance of a dedicated IAB committee.
Added to this, the ad network model in mobile is most often associated with a ‘waterfall’ approach, which couldn’t be further from the ethos of programmatic. One of the principles of automated advertising is to enable a holistic auction of buyers in real-time, competing on price and thereby generating optimal value for the publisher. It’s a simple case of supply and demand with the aim of bringing buyers and sellers closer together. By comparison, the ‘waterfall’ approach prioritises different buyers in a pre-set and fixed order, which doesn’t take account of variations in pricing or demand.
All of which is a rather longwinded way of saying that premium publishers have good reasons to favour automated advertising over other approaches to mobile. Automation technologies are giving them the tools they need to sell inventory safely and transparently, while controlling which advertisers they allow access to their inventory, and at what price.
Automated advertising is also allowing publishers to take advantage of a growing agency focus on mobile, as buyers look for the most effective, scalable ways to reach people on new devices and formats.
In last year’s survey of buyer attitudes to mobile, 90% of agency trading desks said they are buying mobile inventory programmatically, compared to less than 50% last year. Respondents also suggested that mobile ad spend would double this year.
Mobile private marketplaces are also playing an important role for buyers – offering quality inventory backed with qualified, trustworthy audience or intent data, as well as providing a solution to the lack of 1st party data in this space. And to quote our research again, 95% of buyers said they had either already bought mobile private marketplaces, or planned to this year.
Finally, native advertising in mobile is another area buyers have shown great interest in. In the words of MEC UK Head of Mobile Jide Sobo “Demand for native ads is increasing, as their high performance makes them very attractive to advertisers.” Our own partnership with InMobi aims to bring together ROI and engagement of native with the agility, scale and efficiency of automation.
According to research by the OPA, fully three quarters of US publishers are already selling native adverting – and it also suggests that number may have hit 90% by now.
The Case for Premium in Mobile Advertising
Native advertising is clearly important for premium publishers. But why should premium inventory be so important for mobile in particular?
As a relatively new medium, many brands are still in a ‘test and learn’ stage, so brand-safe environments are absolutely critical for buyers to experiment, while retaining their customers’ trust.
In fact, advertisers may be even more conscious of reaching consumers in premium environments on mobile than on desktop, TV or print, as a report from Advertiser Perceptions has suggested.
The UK Association of Online Publishers (AOP) has also conducted research in this area with Mindshare, which brings the impact of advertising through mobile rich media ad formats on premium inventory into sharp focus.
The fact that consumers are on average 50 per cent more positive about advertisers on premium brand mobile sites – even where these formats could be construed as ‘intrusive’ in other contexts – is just one of the report’s findings, whose panel covered around a quarter of the UK’s total mobile population.
Finally, a global ad forecast from Zenith Optimedia in April highlighted mobile growth and the adoption of programmatic as the two leading factors in display overtaking search revenues worldwide by 2016.