This article was originally published in AdExchanger's The Sell Sider column, reprinted with permission.
While adoption of header bidding has gained traction on desktop, the static waterfall has remained a defiant mainstay with mobile app publishers.
There are technical and operational nuances that must be addressed to ensure success for mobile app publishers and their monetization partners. The conversation about how bidding comes to life for mobile apps must be different.
To make bidding work in mobile, the market needs to acknowledge that the in-app environment is unique. All demand sources, including networks, must be able to participate in bidding. Demand sources should also be allowed to continue innovating while using the rich native platforms developed by device operating systems.
Mobile App Bidding Cannot Replicate Desktop Bidding
Bidding in the app world cannot be a copy/paste of what worked in desktop, but unfortunately, that’s all that is available in the market today.
To unpack this, consider the state of mobile app advertising today. Today’s publisher waterfall requires frequent optimizations, with near-constant operations focused on capturing the historical price to maximize future monetization. Mediation platforms have solved for this pain point with automated price optimization tools. While helpful operationally, these tools do not account for a demand partner that might be willing to pay a higher price in real time for a given impression.
Demand platforms that are not in the primary ad server or mediation position are jockeying for higher spots in the waterfall by instructing publishers to set up hundreds of line items signifying different price points. This setup creates operational and trafficking overhead, and it only solves for part of the overall problem and lacks a holistic vision of demand competition.
Demand Inclusivity Is Critical
Including the network demand sources that make up a large portion of overall app publisher revenue is an important piece needed to enable bidding. If bidding is exclusive to exchanges – many of which have the same demand-side platforms buying and little demand diversification – a large portion of the publisher’s overall revenue isn’t being considered, and a waterfall will have to continue to operate.
A bidding future that includes networks and allows them to respond to ad requests in real time will help publishers get closer to the actual highest price per impression. To bring app bidding to life, networks need to take the critical step of supporting per-impression bidding.
Many networks have been reliant on the CPI model. For mobile app bidding to be successful, all demand sources need to align on one metric: the CPM.
Preserving Ad Format Innovation
The mobile app ecosystem is unique because of its client-side ad format innovation and the reality that the strongest demand sources require their SDK for optimal creative rendering. Mobile app advertising has completely reimagined long-established display creatives with innovative ad formats, such as playables, native video and rewarded video.
SDKs are the native technology of mobile apps that facilitate these rich ad creative experiences. Bidding solutions must consider a hybrid approach of server-side ad valuation, with client-side ad format execution.
Iterating Toward The Next Horizon of Mobile App Advertising
The next generation of the waterfall needs to take the best parts of traditional app mediation and the best parts of exchange-based buying to create an environment where all demand sources can bid in real time while using their proprietary technology for user valuation and creative execution.
There is undeniable value in establishing equal opportunity for demand sources and trimming the unhealthy and bloated waterfall. However, that value has not yet been quantified for the mobile app space, and there is an expected and valid hesitance surrounding upending the status quo.
Leading indicators are signaling a shift in market. Mobile app-focused networks have started to evolve their models and are actively planning for the evolution of the traditional mediation stack to look more like programmatic bidding. The good news is that new implementation guidelines are not needed; the OpenRTB IAB specifications can be leveraged for industry-standard ad calls.
With an innovative and technically proficient approach, the promise of mobile app bidding can be realized.