Realizing the potential of mobile programmatic advertising: three trends

October 27, 2015

Tags: 2015, Industry Perspectives

Elizabeth Gilmore
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Programmatic buying has become a key component of digital marketing strategies. It brings significant benefits to advertisers, including increased efficiency, scale, and cost-effectiveness, transparency, and enhanced targeting. Benefits to publishers can also be substantial: transacting programmatically can increase overall profitability, streamline the sales process, and afford data that can help publishers improve both the user experience and their monetization strategy.

Mobile is the new frontier of programmatic buying–with the technology poised to help marketers more effectively connect with consumers in the moment, across screens. According to eMarketer , mobile accounted for 44.1% of all US programmatic display ad spending in 2014, totalling $4.44 billion, and it’s projected to top $8 billion this year. This increase is not surprising, given that last year, for the first time, Americans’ use of smartphones and tablets to connect to the web surpassed that of desktops . Following consumer behavior, brands are looking to spend more on mobile than desktop advertising for the first time this year. We’re seeing the results of that shift here at MoPub: our Q2 Marketplace Report revealed that the top 25 brand advertisers in our Marketplace spent 112% more in Q2 2015 compared to the same period a year ago. While this shift is driven in large part by the consumer move to mobile, three recent innovations are helping to make mobile programmatic in particular the new frontier and are driving widespread adoption.

  1. Rich and native formats

New ad formats now available programmatically, such as native and video ads, are driving higher engagement rates thanks to a better user experience. Native ads allow advertisers to create a relevant, mobile-specific experience in which the ad creative looks and feels similar to the surrounding editorial environment. Advertisers report better performance with these formats, with mobile native ads performing up to ten times better than standard mobile display formats. And publishers are taking notice: our Native Ads research found that a growing number of publishers are adopting native formats, with 8X more apps featuring native ads in June 2015 compared to June 2014. Meanwhile, brand-favored rich formats like video are another way for marketers to create more engaging experiences and are also on the rise. Over $2B in video ads will be transacted programmatically in the US this year — nearly triple the spend in 2014. Demand for these new formats is benefitting publishers with strong growth in eCPMs as well. In the MoPub Marketplace, video ad eCPMs have increased by 30% year-over-year, and native ad eCPMs have gone up by 40%. Buyers and sellers alike are welcoming the opportunity to combine the effectiveness of native and rich ad formats with the efficiency and scalability of programmatic.

  1. Programmatic premium and private marketplaces

The concept of “programmatic premium” and the growth of private marketplaces has helped fuel the appetite for transacting programmatically for both buyers and sellers. Programmatic premium typically refers to space that garners more favorable conditions for buyers, such as premium placement or enhanced viewability, and more value for publishers. This can include “brand-friendly” inventory, which affords buyers increased confidence in addition to the efficiency and scalability that makes programmatic so enticing. For those looking to take it a step further, the growth of private marketplaces (PMPs) offers premium inventory on a more exclusive basis. Publishers are able to approve the buyers who can participate and often negotiate pricing guidelines in advance, while brands get access to coveted premium placements before they hit open exchanges, often with access to exclusive first-party data. These benefits have caused bidding in PMPs to become the fastest-growing segment in mobile programmatic ad spending; eMarketer estimates that it will grow from $670 million this year to over $2.86 billion by 2017.

  1. Measurement that matters

Marketers and developers alike need robust tools for targeting and measuring performance, which the transactional nature of programmatic makes even more accessible. Digital marketing generates so much data that making sense of it — and using it to make smart marketing decisions — has always been a challenge. At MoPub, we’ve created solutions that allow us and our partners to make meaningful, data-based observations quickly and use these insights to drive performance and cost-efficiency. We’ve focused on improving the accuracy and ease of use of our measurement tools, and ensure our users have access to real-time performance metrics like clicks and conversions, in addition to more granular details based on app, device, and more. Deeper insights lead to better performance — which in turn encourages further programmatic growth.

We’re thrilled to be at the epicenter as mobile and programmatic continue to converge — two key growing segments of the digital ecosystem. Effective, engaging new ad formats, premium placements, and enhanced measurement capabilities are encouraging more and more publishers to sell their inventory programmatically, and brand dollars are flowing to meet them. Mobile is growing, programmatic is growing, and both advertisers and publishers stand to benefit greatly if they leverage the latest trends in both.

To learn more about some of these trends, check out our Marketplace Report .

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