Gil Sheinfeld, CTO at Amobee, considers the key factors that have contributed to the unstoppable rise of programmatic.
Over the past 18 months, the prominence of programmatic buying on mobile has sky rocketed. In fact, Magna Global estimates that overall programmatic ad spend will reach $33bn (£20bn) by 2017. While programmatic has grown steadily in importance for online advertising over the past five years, the speed with which the advertising community has adopted mobile is little short of astonishing.
Astonishing, but explainable. There are a few key factors behind programmatic’s rapid uptake on mobile. The key difference is that on mobile, publishers have been less reluctant to put their inventory into programmatic exchanges and networks. The online world was a world of traditional media companies who mainly used programmatic to offload unsold inventory. On mobile, however, the inventory mainly comes from app developers who know they need to look outside their own organisation to generate revenues.
There’s also a different dynamic in mobile, where programmatic has been recognised as a way of monetising massive amounts of inventory quickly. The captive audience on mobile, combined with great data, has led advertisers to see programmatic buying on mobile as a much more effective way to identify and engage audiences.
There was an initial hiatus for many data vendors and platforms as they moved away from cookie-based marketplaces, and struggled to optimize for mobile’s cookie-less environment. But in the last six months, we have seen a massive uptake of third party data, and this has dramatically improved data quality on mobile. This improved data layer is fuelling the evolution of mobile programmatic, because advertisers can now target mobile audiences in a highly contextual way. Programmatic buying on mobile also provides advertisers with immense access to a critical inventory source: mobile apps.
In addition, the emergence of the Open RTB protocol as the de facto standard for trading programmatic inventory makes it much easier for players in the ecosystem to connect. In turn, this common trading protocol creates greater liquidity in the market. But we’re not over the finishing line yet. There is definitely room for improvement in the standardization of metrics and measurement. In comparison to desktop, there are discrepancies between how different mobile ad servers, DSPs (Demand Side Platforms) and ad exchanges count option requests, bids won, and bids lost. The good news is that we now have third parties coming in and implementing standards around ad verification, counting clicks and conversions. Once these standards are more established, the medium will continue to mature and gain the trust of advertisers.
Trust, is vital for the success of any advertising channel. In this respect, the combination of the mobile channel and programmatic technology warrants trust for both the seller and the buyer. Publishers receive greater access to selling methods that they can control, while buyers gain higher confidence that they will actually see their impressions. Therefore, both receive something of value.
There is much more transparency on mobile than in the desktop arena, since mobile publishers and app developers defer channel conflict by eliminating the need for a separate sales force. Mobile publishers are oftentimes more open to monetising their inventory via programmatic buying because there are price floors that ensure their inventory will generate the highest return. This transparency is passed along to advertisers, which allows for greater trust and greater investments in programmatic spending. AdExchanger reports that nearly one-third of agency employees plan on managing at least 64 per cent of clients’ digital budget programmatically on mobile in the next year.
While it is still early days for mobile programmatic, some early success stories are emerging, with location and targeting often key ingredients for improved ROI. Mobile provides advertisers with many unique data points that are not available on desktop. For advertisers, the ability to efficiently identify users on the go via their mobile devices and target them based on their environment, whether they are at home, at work, or somewhere in between, ensures that advertisers are targeting the right person, at the right time and place, at the most cost-effective price.
For Amobee, it is self evident that programmatic on mobile is here for the long haul, as it allows advertisers to extract more value from each media dollar invested. As we shift into a mobile-first, multi-screen world, buying programmatically becomes a critical connector between consumers, their mobile devices and the advertisers that want to reach these users. In short, mobile programmatic technology allows advertisers to reach potential customers on the right device, at the right time, in the right place, with the right content, at the most efficient cost, and that’s exactly what they want.
Gil Sheinfeld is CTO at Amobee