Traditionally, the upper hand in advertising has always belonged to advertisers with big budgets. Publishers set prices for their inventory but, with the exception of a few high-end publishers, it was ultimately advertisers who set the demand, with publishers adjusting accordingly. Now mobile is turning the tables with programmatic advertising, which is the algorithmic, automated purchase and sale of ad space in real-time, using a bidding system.
This allows app developers to claim a premium for their ad slots by selecting ads which pay the most. Media owners, in this case app developers, are now earning higher payouts for high-quality users, instead of selling their inventory at a constant price.
With the high adoption rate of native ad formats among app developers and the Interactive Advertising Bureau (IAB) launching the Open RTB 2.5 standard for programmatic ads, programmatic is bound to grow significantly in the years to come, with research from eMarketer predicting that 83 percent of all ad buying this year will be traded this way. If you want to make the most of your app’s ad space, there are a couple of things you need to keep in mind.
Making the Most of Programmatic Advertising
A couple of monetization solutions out there support programmatic demand. If you keep a few things in mind, you can take even more control of your inventory and increase your payouts significantly:
- Be Transparent. Supply clean and relevant user data, such as Google Advertising IDs, Apple IDFAs and user location, for example. Programmatic exchanges use this data to sell your ad space to potential buyers who are willing to pay a premium for desired traffic. The more information you provide, the higher your chances of being offered that premium. Identifying user cohorts and making this data available to ad space buyers in real-time can take some time as patterns are identified, but it helps them to sell your inventory to the most relevant advertisers. Once the optimization based on this data kicks in, you will start seeing an uplift in effective cost per thousand impressions (eCPM).
- Use Bid Floors. The most effective way to use programmatic demand is to set minimum bid floors for your traffic in various countries and only accept an ad if it’s willing to pay you more than your minimum threshold. This way, you ensure that you are getting the most value for your users. Keep in mind that bid floors can differ per placement and country. For example, you can have a $5 bid floor for your native placement in the U.S. and a $2.20 bid floor for the same placement in Indonesia, depending on market demand. Be careful not to set your floor prices too high, as you might be left with no ads at all.
- Give Programmatic Exchanges Priority Access to Your Inventory With high bid floors comes the natural downside of low fill rates. The most effective way to maximize your inventory’s yield is to allow programmatic exchanges the first look at your inventory by setting appropriate floor prices. This way, real-time bidders like retargeting companies, get a first look at your traffic and offer you a premium if you have the users they want. This can be followed by non-programmatic demand sources, like ad networks, to help you fill the rest of your ad slots.
As the mobile advertising ecosystem becomes more sophisticated, more apps are becoming businesses in their own right. Through programmatic buying, these apps are now able to monetize themselves at premium rates, and can choose the ads that their users most want to see. The future of mobile advertising is programmatic, and as the tables turn in the mobile world, app developers can reap the benefits by ensuring their inventory is connected to a programmatic exchange.
Related story: Kellogg’s Accused of Being Anti-Family