Breaking down programmatic, Episode 1: Demystifying the DSP (Part III)

Thursday, February 20, 2020
By: Julia Martin

The premier episode of MoPub’s newly launched Thought Exchange video series has been all about demystifying the DSP -- and really, demystifying mobile programmatic advertising as a whole. Today, we’re excited to release the final installment (Part III) of our first topic, in which our app marketer experts (Tyler Cooper, Head of User Acquisition, TextNow; Stevie Duffin-Lutgen, User Acquisition Marketing Lead, Mobilityware; and Cole Morris, Growth Marketing Analyst, Root Insurance) dive into actionable opportunities and share specific recommendations for their mobile marketer peers. 

How do I start to incorporate programmatic into my UA strategy?

When you’ve decided programmatic is a channel you’re ready to invest in, you’ll need to begin evaluating DSPs to find the right partner for your app and needs. During this vetting process, knowledge is key. “Educate yourself as much as possible,” Cole recommends, “so you know the questions to ask.”

Stevie adds that understanding your monetization funnel is equally as important. “You may be tempted to aim for the lowest CPI possible,” she says, but that may not be the right strategy for bringing in the right type of users. Instead, you may want to consider buying on a cost per event (CPE/CPA) or return on advertising spend (ROAS) basis.

You’ll also need to be thoughtful about the type of post-install events you send your DSPs. “Be careful that whatever event you’re sending [to your DSP] is most closely linked to revenue,” adds Tyler. For TextNow, that means sending retention events (versus registration events).

Should I work with a managed- or self-service DSP?

Tyler, Stevie, and Cole have had ample experience working with both managed-service as well as self-service DSPs, and they all agree there are pros and cons to each model. 

If you’re just starting out, Tyler says, “just go the managed service route; you’ll save yourself a lot of headaches, you’ll save a lot of money.” And that DSP markup fee? “[It] will be more than paid for with the learnings that your client manager will be able to provide.” He adds that once you’ve spent some time understanding how programmatic works and the various levers available, you may be ready to transition to a self-service DSP. 

The benefit of self-service, theoretically, is the cost savings. However, contends Stevie, “a big misconception is that it’s going to be easier.” All of our panelists agreed this isn’t the case. 

“[Programmatic] is probably the biggest pool, collectively, of inventory you can target,” Cole surmises; what’s more, accessing that pool through a self-service DSP is “tough if you don’t intimately know who you’re after and where and why you want to get them.” Root Insurance has dabbled with self-service DSPs as well as spent significant time investing in a Bidder-as-a-Service. The investment and undertaking is not insignificant. He admits, “it will blow your mind how much there is to it...you gain a new appreciation for that one-size-fits-all learning model.”

On the other hand, if you have the resources -- “a few analysts, a few data scientists, and some [dedicated] engineers,” Cole asserts, “you can do some special things.”

What’s next for mobile programmatic advertising?

Mobile programmatic advertising is on the rise. According to eMarketer, “almost 87% of all mobile display ad dollars, or $39.36 billion, [were transacted] programmatically in 2019, and by 2021, mobile’s share will sit just below the 90% mark.” With this in mind, programmatic advertising is becoming an increasingly critical piece of every marketer’s growth strategy. And with stiff competition in this ever-innovating and ever-evolving industry, we expect DSPs to continue to improve as well as targeting, efficiency and ROI for marketers. 

We hope you enjoy Part III of this episode (and be sure to tune into Part I and Part II if you haven’t already!) Next up in this series, we’re heading to São Paulo where we’ll be sitting down with two top Brazilian app marketers to discuss the many opportunities (and challenges) in the important market of Latin America. 

In the meantime, reach out to the MoPub team if you’re interested in working together.

About the author: Julia Martin, Senior Programmatic Demand Lead

Julia has been in the digital advertising industry for 10+ years, working on both the supply and demand sides of the business. At MoPub, she's currently focused on helping top mobile app marketers develop & refine their programmatic user acquisition strategies to achieve optimal scale and success. She lives in sunny LA with her husband, goldendoodle and two young (& very vivacious) kiddos. You can find Julia on Twitter at @JuliaLovesApps.

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