Mobile Programmatic Advertising: Everything You Need to Know

April 7, 2015 Emma Cullen

 

Mobile programmatic advertising is transforming the way both buyers and sellers do advertising through a mobile format, and represents one of the fastest areas of marketing and advertising growth in the world. However, it’s important to understand how you can benefit from programmatic advertising, what the main features of programmatic advertising are, and what challenges are present in relation to this technology. With that information in hand, you’ll ultimately be in a better position to utilize mobile programmatic advertising to its full potential and understand the future direction this technology will take.

The Basics Of Mobile Programmatic Advertising

At its very heart, mobile programmatic advertising involves the automation of buying and selling of digital advertising within ad exchanges and inventories. However, there are many variations to this basic concept, allowing for market participants to have a high level of customization regarding how they approach mobile programmatic advertising.

Firstly, it’s important to understand just how important this technology is to web-based advertising. The Interactive Advertising Bureau (IAB) indicates that 85 percent of advertisers and 72 percent of publishers are actively utilizing programmatic advertising, and this number is only expected to grow. Within the sphere of mobile programmatic advertising, eMarketer found that in 2014 mobile programmatic advertising experienced significant maturation, underlining the explosive growth of this marketing technology. Mark Hoelzel remarks that it will be formats such as mobile programmatic that will a major driving force in programmatic spending growth, with a predicted spend in mobile and video programmatic of  3.9 billion USD by 2018.

There are different forms of mobile programmatic advertising that represent different markets. These different markets utilize different technologies and practices, all of which impact the type of ads you can buy or sell.

Real-time Bidding (RTB) is the most well-known and widely used form of mobile programmatic advertising, and has a proven track record in the industry. Advertisers work through advertising exchanges and Demand Side Platforms (DSP). This essentially creates an exchange where a large selection of advertising inventory is available from various publishers. This inventory takes the form of impressions that are available for an advertiser to purchase based on an auction-style bidding process, all in real-time.

The RTB format enables an open market place where advertisers are able to purchase exactly the impressions they want for the price they are willing to pay. Much of these impressions are based on solid data about the type of people who will view an ad, including important demographic information, mobile device information, and other key data factors.

RTBs are not set-and-uniform exchange mediums, they also offer different exchange mediums. Open exchanges are available to all advertisers while there are also private RTB marketplaces that offer a variety of exclusive advertising inventories.

Another popular option is Programmatic Direct, also known as programmatic guaranteed deals, which deal with the selling of advertising at a 1:1 fixed rate. This is a more exclusive market than typically seen within RTB. Programmatic direct allows publishers to sell inventory material to a wide variety of clients, including advertisers and agencies at a fixed rate. This can also include invitation-only options, in which an advertiser selects certain buyers who are eligible to purchase the most valuable and sought after advertising inventories. This type of mobile programmatic advertising allows for publishers and advertisers to implement the terms of a deal with a unique Deal ID, which serves as the guarantee behind how a specific ad inventory will be displayed.

The Main Features and Benefits of Mobile Programmatic Advertising

Mobile programmatic advertising provides the opportunity to optimize your web advertising and improve targeting. Advertisers can set a bid price, what audience they want to reach, and what areas of the web they want their ads to be featured, allowing for a huge degree of customization in terms of how ads are deployed.

A key benefit of mobile programmatic advertising is data, and the ability to use this data to decrease CPM and increase CTR. Often, mobile programmatic buyers have access to the type of impression opportunities available, including mobile device information, App IDs, OS version, and ad size — this also includes the formats available, such as 320×50, 300×250 and 300×600. Ads can then be customized based on mobile users’ phones, screen sizes, and connection speeds, among other factors. In addition, there are different options for embedding ads through JavaScript or MRAID SDK.

On top of that, mobile programmatic advertising also allows advertisers to understand users through behavioral patterns, which is facilitated through:

  • Geo-location data
  • Data on users’ habits, such as which shops, restaurants and locations they travel to
  • Tracking of app usage and phone activity
  • User activity across social media platforms, and even ad deployment based on data, such as someone using a hashtag
  • The use of mobile identifiers, which allows for greater re targeting, allowing for advertisers to build long-term brand identification and improved impressions

Mobile programmatic advertising ultimately allows creatives to reach their full potential. With this technology, you know that your ads are reaching the required market through accurate targeting. This allows you to focus more on the creatives that will appeal to the specific group of people you’re looking to connect with. For example, video formats are a high-impact vehicle for delivering content that stands out. Although expensive, the data behind programmatic advertising for mobile allows these more expensive ads to reach a broad but specific audience, helping improve your ad campaign’s bottom line.

The Challenges Of Mobile Programmatic Advertising

While mobile programmatic advertising is growing fast and offering more possibilities than ever, advertisers need to rise to the challenge. Whilst advertisers and marketers appreciate the importance of programmatic, the amount of advertisers who are buying mobile ads programmatically is still low.

Research has pointed to the fact that advertising campaigns need to use multiple ad sizes and variety in order to reduce CPM. That means moving away from traditional forms of advertising that don’t connect with users. In fact, campaigns that used the top three most commonly used display ad sizes had a CPM that was more than 50 percent less than campaigns that only used a 300×250 ad size. Campaigns that utilized all seven sample ad sizes had a CPM that was 60 percent less. This underlines the need for variety and focus on high-quality ad campaigns to realize the full potential of mobile programmatic advertising.

In addition, Peter Crofut, the head of Google’s Creative Platforms Strategy, also outlines the need for programmatic creative, which means using data available through mobile programmatic advertising to build custom-tailored ads that will speak to your target market, such as delivering ads based on gender-specific audiences. Unfortunately, many companies are failing to do this, and realizing a lower ROI as a result. This is primarily because companies are still building their advertising creatives using slow, manual methods and therefore simply do not have the resources to create so many creatives.

Viewability is also an issue, with some researchers estimating that half of all ads purchased through programmatic advertising are never actually seen by the intended audience. Concerns about this phenomenon are increasingly important for practitioners of this technology who want to ensure transparency and determine the fair value of advertising.

The Future of Mobile Programmatic Advertising

Mobile programmatic advertising is constantly evolving. That means a constant emergence of new exchanges and markets that provide different buying, selling and even creation configurations for participants. In the future, the data available for inventories is expected to only increase, as technologies are better able to track user habits, location data and social media usage.

It is also expected that investments in content and campaign management systems will offer platforms that will tie different ad campaigns and workflows together. This will create a centralized and nearly automated system to improve the efficiency of mobile programmatic advertising, and also allow users to tie disparate data sources together to glean essential information such as CPM and the overall impact of an ad campaign with different demographic groups.

This same concept is also expected to expand into programmatic creatives, allowing for various aspects of the creative process to be automated and managed through a centralized system. This will reduce the need for additional coding and resizing of ad displays, and allow for ads that can deliver a message with flexibility and images with dynamic embedding technology.

Finally, ad exchanges and inventory will look to incorporate viewability information into the bidding process going into the future, ensuring buyers can better measure and understand how many ad impressions are actually being seen by their intended audience.

As you can see, mobile programmatic advertising is only expected to grow, but challenges remain. We now understand:

  • The different types of mobile programmatic advertising methods available to you;
  • How digital advertisers are creating efficiencies and ad optimization through this technology;
  • How data available through inventories is allowing for accurate targeting and retargeting to increase your ROI;
  • The challenges regarding viewability and creatives that are hindering the full potential of this technology;
  • How programmatic creatives are essential to the future of this technology and how they’re moving forward.

There’s no doubt about the power and promise of this technology. The question is what will you do with it to help your business succeed, and ensure your message reaches your desired audience.

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