What's Ahead For Mobile Programmatic

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While many people are bullish about mobile programmatic—after all, time spent on mobile devices is surging—there’s a learning curve and challenges for marketers that want to dive in.

Digital research firm eMarketer projected that U.S. mobile programmatic ad spending will reach $9.33 billion this year and account for 60.5% of total U.S. programmatic display ad spending.

I spoke with Joe Prusz, SVP & head of mobile, Rubicon Project, about this and more.

RTB: What are some of the challenges facing brands that want to buy mobile inventory programmatically?

Prusz: One of the challenges in mobile is the sheer number of apps (millions in both the Apple App Store and Google Play) that marketers have to wade through. Private marketplaces (PMPs) allow buyers and sellers to easily package and transact the highest quality audiences, at scale.

After seeing mobile orders on our platform grow by 1,400% in 2015 and then reading 2016 global forecasts, it’s clear to us that these programmatic and private settings—that now support both non-guaranteed and guaranteed orders—are rapidly becoming an essential part of buyers’ and sellers’ programmatic toolkits.

RTB: You’re saying that PMPs are likely to see a lot of mobile action?

Prusz: We see the shift to PMPs as a "flight to quality" that's being led by a new breed of brand-direct buyer who’ve built their own demand-side platforms (DSPs) or have taken their programmatic functions in-house. They’ve told us that they’re moving 80% to 100% of their mobile budgets into automated PMPs.  This enables them to handpick their seller partners and still execute programmatically via real-time bidding  at scale.

RTB: Rubicon isn’t the only provider that’s prepared for brand-direct business.

Prusz: I believe that mobile advertisers want to buy quality inventory, and the best way to do that is through private marketplaces and the biggest DSPs.  

I’m most excited about the top five—The Trade Desk, Adelphic, MediaMath, AppNexus and Turn—growing aggressively in mobile. The mobile budgets are significantly increasing at these places. I think the big DSPs will double their budgets this year.

The first couple of years in mobile were difficult for us. We weren’t mobile-first. Now, app developers are coming to us and saying they want programmatic-first partners like us.

RTB: Rubicon’s Fourth Annual Global Mobile Survey found that 33% of North American agency buyers say they’ll spend between 81% and 100% of their client’s budget on location-enabled inventory. What’s your take?

Prusz: This is a larger number than I expected. But agencies say it’s easier to sell location-enabled inventory to advertisers because of the intent data that comes out of location. People thought the holy grail was about delivering an ad to people just as they’re passing a Starbucks so they could deliver a coupon.

But the holy grail is more about delivering better advertising based on something people have seen in the past. Agencies love the data that comes from location targeting so they can build richer audience segments.

The challenge of delivering an ad on location is that the scale is much smaller. But once you create audience segments, more inventory will open up that can be targeted.

RTB: How should the buy and sell sides prepare for the challenge of buying mobile video programmatically?

Prusz: Sellers need to embrace new innovations, such as InLine outstream video for the mobile Web. These units insert a video player into text-based articles, autoplay when the articles come into view, offer user-activated audio and stop or disappear when a user scrolls out of view.

Rewarded video is the kind that comes up when you’re playing a game—and in order to advance to the next level of the game, you have to watch the video ad. By engaging with the ad, a user gets a reward. The CPMs for these types of units can be as high as $100.

RTB: What’s going on with programmatic mobile native?

Prusz: Sellers need to get serious about their mobile app strategies. It’s time to upgrade to one of the many app templates that support native ad formats, and to start to court these brand dollars in earnest.

Right now, the only way to do mobile native at scale is via Facebook and Twitter. Our research showed that buyers are putting more money into native but sellers aren’t seeing it. Only one or two sellers are seeing it: Facebook and Twitter.

Rubicon co-authored the Interactive Advertising Bureau’s native spec, the OpenRTB 2.3 native ad spec. We need more sellers to create their native placements around that spec. It’s taken a lot of education for us to increase the number of buyers who buy against it, and we now have nearly two dozen. The big players like AppNexus, Turn The Trade Desk and Audience Science need to adopt this spec.  

A lot of the DSPs offer banner ads or static formats for mobile native. There needs to be more education about mobile native ad formats. And we need to show how the new standard makes it easy for advertisers to buy mobile native on Facebook. 

One reason why native hasn’t grown as fast is because video got so hot in mobile last year. A number of DSPs updated to video on our platform first. Video has grown fast in mobile, but it’s come at the expense of mobile native.