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Mark Robinson, CEO of deltaDNA explains that programmatic buying technology helps advertisers to reduce their costs and optimize their return, but at what costs to mobile marketers and IP owners and how can they even the playing field?
Programmatic buying has long been a technology employed by advertisers to reduce their costs and optimize their return. The consequence of this technology is reduced incomes for mobile marketers and mobile IP owners, through suppressed CPM rates across the board. This is a potential threat to the viability of game and app development, so I’d like to look at this situation and propose some solutions to even the playing field.
The results achieved with programmatic buying are very impressive, but for mobile marketers, the opposite is true, as it suppresses the eCPM value they receive.
Waterfalling
Any mobile marketer you speak with will tell you that when new ad networks are installed, eCPM values soon drop.
Implementing a waterfall of ad networks has been a common mitigation for this, and this can certainly reduce problems with low fill rates, but unless each network within the cascade is constantly re-evaluated, eCPM will continue to slide, and networks that can supply high value ads for a given user type may not have the chance to show them.
Player segmentation
The eCPM you receive is only half of the story, the number of impressions you can comfortably serve is also vital.
Most apps have a job to do, other than serving ads, and it is most often this that takes precedent, whether it’s generating in-app purchases in games or retail transactions. In these cases, user retention is critical for the success of the app, and it is widely feared that the overzealous use of high frequency advertising can scare away users.
Until recently, there’s been very little capability to link advertising data with user data to be able to test and confidently prove any links between ad frequency or ad network and user retention, so many marketers err on the side of caution. The connection between ad network data and player data is vital to determine user segments that are more responsive to advertising, identifying users who can happily receive more ads, without adversely affecting monetization through other means. For most mobile marketers though, this is a pipe dream, as they trawl through each ad network’s analytics to work out what’s going on.
Independent Mediation
Until recently, mobile marketers’ apps have been easy prey for programmatic buying, but at last we are seeing a fightback. Independent mediation platforms that evaluate all networks, providing the highest performing ads to each player are a big step forwards, but not the entire answer. The real improvements are coming from platforms that can manage the mediation, and reconcile users’ ad consumption with their in-app behaviour. This, when combined with the capability to use powerful big data infrastructure to apply real-time marketing to users, enables mobile marketers to be much more targeted with their ad delivery, sending out optimized campaigns that have been A/B tested, or enabling machine learning to optimize this for them, to negate the effect of advertisers’ programmatic systems and achieve the best results for them and their app.
In summary
Programmatic ad buying has been highly effective because of market dynamics. They pay the least amount they have to, and when static waterfalling is used, this will always become an ever decreasing amount. Until now, mobile marketers haven’t had the power to see all their data in one place and act on it. When they do, the days of static waterfalls, rapidly declining eCPM rates and strategy formulated from instinct will be numbered.
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