As programmatic mediation enters its heyday, how will the mobile ad ecosystem evolve? Already, advertisers and developers alike are embracing user-centric ad models, along with the technology to make delivery more efficient. Tapjoy spoke with Facebook Audience Network’s Vijay Balan to get his take.
I’m Head of Publisher Solutions Partnerships at Facebook Audience Network. My role is two-fold – I lead the team that brings new publishers onto Audience Network. I’m also responsible for all ad tech partnerships globally for Facebook which includes our bidding partnerships.
Two of the greatest shifts I’ve witnessed have been with the skyrocketing growth of mobile gaming and the advent of bidding.
On the gaming front, to say that the gaming market is growing would be an understatement. According to a report from Newzoo, there are now more than 2.5 billion gamers across the world with most of them playing on their mobile devices. This enormous player base paired with the highly-engaging nature of games makes it an incredibly vibrant space for mobile advertising. We’ve also seen some of the most immersive and innovative ad formats borne out of this category such as rewarded video and playables.
Further, mobile game players now reflect the typical consumer (50/50 gender, mid-late 30s) more than any other app category, according to Newzoo’s March 2019 study. This means gaming apps are now a valuable channel for global brands to reach highly-coveted audiences which opens up more growth and monetization opportunities as we look to 2020.
Bidding — where we’ve seen game publishers among the earliest adopters — is another industry shift that’s come to the forefront in the last couple years. Looking at bidding, several years ago we saw the advent of header bidding in web and its rise to a dominant position in how web publishers monetize. Many app publishers noticed the success of web header bidding and wanted the same efficiency and price competitiveness brought to the app world. Over the last couple years, many businesses, including Audience Network, have been working together to make app bidding possible — a much more complex undertaking in app than in web. 2019 was the year we really saw app bidding start to take off as a reality for app publishers — a trend that I expect will continue to accelerate this year.
Safeguarding brand reputation is a priority for many advertisers and publishers alike in the digital advertising ecosystem. From an ad network perspective, this means having both high-quality advertisers and high-quality publishers participating to drive a positive experience for people. For us at Audience Network, this starts with having policies that hold publishers and advertisers accountable for delivering experiences that align with our standards. At the same time, we know that not all businesses are the same and some may want additional brand safety controls. Recently, Facebook announced a number of brand safety controls for advertisers to help address this need. On the publisher side, we offer controls that help publishers decide what types of ads they want to appear on their apps and sites. In both cases, giving businesses the power to create a brand-safe ad experience that suits their unique business needs is essential.
Waterfalls were the de facto set up for ad monetization for the past decade and most in the industry have recognized their inefficiency. Under waterfall mediation, when an ad impression becomes available, a publisher’s ad server calls demand sources one by one, in order of average historic price, not what those demand sources are willing to pay for that particular impression at that moment. This creates a potential loss of revenue. In some cases, the demand source willing to pay the most for a particular impression never gets called because it is further down in the chain. This means the waterfall is problematic for buyers and sellers. Publishers don’t know when they’re leaving money on the table. And advertisers may not get a fair shot at valuable inventory, resulting in skewed average historical prices.
Bidding — or programmatic mediation — on the other hand, allows all demand sources to bid for each impression in real-time, which significantly increases competition for publishers’ inventory and gives demand sources equal access to the impressions that matter for their advertisers. This means the source willing to pay the highest price has a chance to win every time. For publishers, this translates into more ad revenue — in fact, we’ve seen up to 30% increase in ARPDAU from publishers that use bidding vs. waterfall. Further, bidding removes the operational burden of maintaining complex waterfalls which frees up valuable time to spend on more impactful work to grow their businesses.
It’s important to remember that ad monetization isn’t a one-size-fits-all approach. Format effectiveness is highly dependent on the context, audience and the type of monetization model that your business is using. This is why we recommend a test and iterate approach for publishers to learn what format and entry points work best for them.
That said, I do think that the engaging nature of new formats like rewarded video and playables have proven themselves to be particularly effective for game publishers. In fact, recent research by Walnut Unlimited commissioned by Facebook found that, among those surveyed, 79% of developers that use a mix of ads and in-app purchases said rewarded video is their most effective format. While 33% of publishers said playable ads, which are growing in popularity, are already their most successful format.
There’s definitely been a movement toward ads becoming more people-centric with formats like rewarded video and playables leading the charge. We hear regularly from publishers that prioritizing the user experience is one of the most important things they do to attract and retain a loyal audience while building a sustainable business. In fact, in recent research, 57% of game developers surveyed agreed that ads can indeed improve the user experience and aid retention.
Our philosophy on delivering people-first ad experiences includes three key tenets central to our approach:
This all boils down to the fact that when your monetization strategy focuses first on creating a great experience for people, everyone wins.
App bidding is the trend I am most excited about as we look ahead to 2020. I see it as an inflection point for the app ad ecosystem where the long-promised efficiencies of programmatic advertising are finally coming to fruition to the benefit of mobile publishers, advertisers, and ultimately to people. In 2019, we witnessed the ecosystem begin its shift in this direction as more publishers, mediation platforms, and demand sources tested and invested in bidding. With this foundation, I see 2020 as a watershed moment as bidding becomes the norm for publishers.
Tapjoy would like to thank Vijay Balan for taking the time to join us. To read more about the evolution of programmatic mediation and why the waterfall falls short, see our blog “It’s Time For Programmatic Mediation To Revolutionize The Mobile Ad Ecosystem.”