Why mobile in-app advertising is the future

By Lashanne Phang

In this second part of a three part of series, PubMatic’s APAC in-app specialist Lashanne Phang looks at the mobile in-app opportunity for the buy side – what are the pros and cons of this format for buyers? eMarketer projects that mobile ad spending will reach $400bn by the year 2023, up from $286bn this year. With numbers like these, it’s evident this growing format is here to stay. So what do media buyers need know?

 

Your audience is into mobile

If you’re a media buyer, the first thing you should know is your audience is already here.

Consumer time spent on media has already started shifting to mobile. By 2021 eMarketer predicts that users in China will spend more than 220 minutes per day on mobile, compared to just 141 minutes per day on TV. Mobile is set to be the dominant channel by which viewers consumer video - according to Cisco’s Visual Networking Index 79% of the world’s mobile data traffic will be video by 2022. And as we mentioned last week, the app is already ubiquitous in the mobile space; in their MMX Multi-Platform, Worldwide Rollup report released in June 2019, Comscore found that 75% of digital users consume all their social media, lifestyle, travel, news and utility content using mobile apps. The second thing you should know is that a mobile heavy future is a great thing for media buyers, and there are a couple of key reasons why:

Device ID

With Google’s Chrome announcement sounding the final death knell for third party cookies, device ID is a game changer for targeted media buying:

Device ID has a longer lifespan (as long as that of the handset); hence the tracking and targeting of user is prolonged and could be more accurate with richer data collected over time.

Whilst not infallible device ID is generally unique to the owner of the device; so marketers can assume that they are likely to be targeting a unique individual.

Cross-device tracking becomes more complete with device ID – allowing marketers to identify users on mobile and connect those same users with data from their desktops and connected TV devices.

Location targeting becomes more far more effective and accurate.

The 5G era

Mobile in-app advertising is about to get a huge boost from advances with 5G. By 2023, global 5G smartphone shipments will number over 424 million (compared to 73 million this year).3 5G phones are expected to represent a major performance leap for user experience on mobile, particularly with high-definition media and interactive technologies such as the mobile gaming and mobile video streaming spaces. These developments open up a raft of new opportunities for advertisers, giving them greater room for creativity, and opening the door for them to deliver high quality interactive ads onto mobile devices.

While there are lots of positives that come with mobile in-app, there are still some challenges that the media buyers shouldn’t ignore.

Quality

In the first part of this series, we talked about why traffic quality concerns have triggered alarm with media buyers. This has driven them to largely access mobile inventories via Private Market Place (PMP) deals – taking the white-listing approach. And while there are advantages to this approach, it does limit access to some inventory compared to open market buys, and potentially contributes to a longer media approval cycle.

Performance

When it comes to performance, methods that work for desktop to not necessarily translate onto mobile. Incorrect use of targeting parameters on mobile can result in mobile seeming to under-perform. One example of this is using cookies to determine a target audience vs assessing the nature of the mobile application to identify a relevant mobile user (audience). If an advertiser were trying to identify vehicle owners, on web they would use browsing history such as automobile deals to identify whether someone was a potential vehicle owner. However on mobile, app downloads such as real-time traffic apps offer a more robust way of identifying current vehicle owners. But if targeting parameters from web were applied to mobile in-app – i.e. that a person needs to have browsed automobile deals, they would be missed as an opportunity.

Compatibility

Lastly creative incompatibility can be an issue for mobile in-app, meaning ads might not load despite a winning bid. The mobile environment makes it possible for advertisers to try out exciting new formats like MRAID (mobile rich-media ad interface definitions) but sometimes these creatives are not compatible with the impressions into which they’re served. The problem is further compounded in certain markets across APAC by a preference for non-IAB standard ad-placements. For example in China, “splash” is a premium ad-placement. It is a full-screen ad placement that appears on the entire screen of the mobile device with a close button that appears 5 to 5 seconds after the app is launched. Although “splash” is a similar concept to an interstitial ad, it is not compliant with the standard IAB format. If an interstitial ad were to be served for this placement, it would likely fail to serve, or it would look distorted.

As I’ve highlighted there are some challenges we must overcome but the good news for buyers is app developers / publishers are taking note of their concerns. Many have started to adopt IAB standards, app-ads.txt and viewability measurement, particularly those looking to expand their audience base beyond domestic borders and gain access to international demand. Pixalate’s most recent App-ads.txt and Ads.txt Report found that the adoption for app-ads.txt in 2019 has skyrocketed with an increase of more than 5000%. As the industry is moving towards better transparency, now is the time for media buyers to start taking advantage of the rich data points that mobile inventories can offer in terms of targeting, ROI and better ad experiences for consumers.

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