the future of mobile advertising
DESCRIPTION
This presentation talks about the future of the mobile advertising ecosystem. How are the ad servers going to compete with SSPs and DSPs, the Role of the RTB and a critical view of today's mobile advertising ecosystem.TRANSCRIPT
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The Future of Mobile Advertising
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About me• Co-founder at ZestADZ;
• Hands on tech Entrepreneur with 3+ years in mobile advertising; More than a decade of experience.
• Led ZestADZ for the past 1.5 years as the President/CEO until recent acquisition by Komli Media;
• Follow me: http://twitter.com/azifali
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THE ECOSYSTEM
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Stake holders are growing
2008
Publishers and advertisers
Ad Networks
Agencies
Pub Aggregators
2010
Open source pub optimization platforms
Affiliate networks
Digital and interactive agencies
Traditional agencies
Mobile Ad Platforms
2011
Online Ad Networks
Next Gen Pub side platforms
Affiliate Agencies
Resellers
Creative Solutions Providers
& More
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Mobile ecosystem – courtesy Admeld
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eCPM’s are falling• Pub aggregators are delivering little or no value
except that of integrating various networks but collecting 10% margins
• Various other players in the ecosystem driving down gross CPC / eCPMs
• Advertiser expectation low because mobile being a new medium; Advertisers are still experimenting
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Revenue split
Ad Agencies15%
Publishers55%
Aggregators10%
Ad networks20%
Sales
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Mobile ad networks• Dozens operational; more coming up thanks to
market validation with large exits.
• Technology that delivers results is the key entry barrier
• Targeting is limited; Impression level transparency is poor.
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..Ad Networks• Yield optimization either at the impression level or
at the campaign level is extremely important. Unfortunately – networks do very little yield optimization now.
• Transparency of the data with other stakeholders is non-existant;
• Some networks have been moving towards a fragmented, single device model (iAd) which is not exactly great for advertisers.
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• Advertiser side: Sell at costs that are next to nothing; Example Rs 5-10 per download of an Android /iPhone App; Growth is at the cost of the publisher itself.
• Pub Side: 100% revenue share, which is OK for now but not sustainable in the long run.
• In some cases, publishers will make hay while the sun shines and then will switch to another network where revenue is better;
•
Some practices are unsustainable
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Will there be a shakeout?• Consolidation is happening with various
acquisitions
• Smaller Mobile Ad networks should consolidate or fade out
• Very few are above the $50m revenue / annual number
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SSPs / Publisher Aggregators• Mature SSPs are at an early stage, the established ones are
more just aggregators.
• Aggregators lack basic infrastructure to enable control of traffic flowing to ad networks. The traffic flow is blind, based on assumptions and is not automated to performance
• The Gross Margins are between 7-10%
• It requires them to do a business of $100+m to deliver meaningful value to shareholders
• RTB is mainstream in online adv but yet to take off in mobile
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Typical aggregator dashboard
Some aggregators go sell advertising!
Some Ad networks do Aggregator functions
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Publisher + aggregator relationship• Publishers use aggregators hoping to fill 100% of inventory;
• They do, at the cost of extremely low eCPMs; especially in markets where there is excess volume available
• Low eCPMS are because the advertisers have realized that they get access to the same inventory from aggregators who pass it on to any network who can fill it.
• Lack of a bidding system / RTB provides a non-optimized solution
AggregatorPub #1
Pub #2 Pub #3
Agency / Advertiser
Ad Network #1
Ad Network #2
Ad Network #3
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THE FUTURE OF MOBILE ADVERTISING - NETWORKS
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Advertisers: Its all about performance
• CPC / CPL Campaigns primarily performance driven
• Driven by user subscriptions; buy CPC but must meet CPA goals
• Want brand promotion but at performance rates
•Pure CPA / CPL models
•Online networks backfilling ads to mobile without without a great experience on mobile
Affiliate Markets
and Networks
Top Brand Advertisers
and Full service
Agencies
Digital Agencies /
smaller brands
Mobile Content
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Key trends• Significant separation in focus: DSPs to focus on advertiser
side; SSPs to focus on delivering value to publishers
• Business models will become more flexible;
• Ad networks will have to be significantly transparent in order to accommodate SSPs and DSPs
• While the metrics of measurement will remain the same; pricing will become dynamic due to the nature of Real Time Bidding (RTB)
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The future of mobile ad networks is threatened
• DSPs and SSPs tend to eat away Ad network margins
• DSPs can bypass ad networks to Ad exchanges and SSPs as targeting Can be delivered with DSPs
• SSPs can provide value ad to deliver analytics, engagement measurement.
• Large agencies are busy setting up their own (mobile) DSPs
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Why the ad network got there• Networks are blind and non transparent
• Networks share no data; have almost no API
• Most aggregators today scrape data off ad networks
• Networks are not transparent about how the pricing is decided
• Networks are trying to do a balancing act between advertisers (who want lowest cost per user) vs publisher (who want the highest eCPM)
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Networks - what can be done?• Will need to evolve to make every impression highly
transparent to generate better yields
• Will need to invest significantly in yield optimization, targeting, re-targeting, behavioral targeting and personalization
• Will need to open up to share data with other networks, exchanges, SSPs and DSPs.
• Must figure out the right ways to track users in a platform that is mostly deviod of cookies;
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Ad Networks – Where they should be
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Transparency increases the value of the impression
Courtesy: Pubmatic
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All is not lost• Agencies are still used to buying media in large
chunk from networks
• Small and Mid-sized agencies cannot setup their own DSPs easily.
• Transparency will retain all kinds of agencies
• Yield optimzation is very important; This is the ad networks core and they should try hard to improve it
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THE FUTURE OF MOBILE ADVERTISING – AGGREGATORS / SSPS AND DSPS
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Aggregators will evolve to be SSPs• Today’s optimizers / aggregators must evolve to be Supply
Side Platforms (SSP).
• Every large publisher will use SSPs instead of a single network (for better yields of course) in the near future.
• SSPs will need to enable Real Time Bidding (RTB) and provide value added services such as Engagement metrics, deep analytics and the like.
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Demand Side Platforms• Supply Side Platforms are becoming common place in online
advertising and I expect them to become common in 2-3 years in mobile.
• WPP announced that they setup the first DSP for mobile; traditional online players are also moving in to disrupt the market
• Networks are completely un-prepared for DSPs
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Role of the DSPs in Mobile• Will drive simplification on the buy side.
• DSPs will enable mobile marketers to buy media across various networks from a single console enabling a quick check of the performance across various networks.
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ROLE OF RTB
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Real Time Bidding
• Is a way in which advertisers bid for the most effective impression at real-time.
• Is going to play a huge role in the future of mobile advertising.
• All key stake holders must support RTB soon.
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How RTB works• RTB enables advertisers to buy media by
bidding at a per-impression level
• DSPs, SSPs and Ad Exchanges / Networks will need to enable RTB, the benefits which are very obvious:
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How RTB Process Works
Slide courtesy: Pubmatic whitepaper
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RTB with existing ad network tech
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Closure Points• The ecosystem is evolving faster than you
think; growth is fast paced and explosive
• Publishers can drive better yields with Ad networks + SSPs
• Ad Networks and Aggregators must evolve;
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A LITTLE BIT ABOUT US
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About ZestADZ
• Leading Global mobile advertising network ; Acquired by Komli in July 2011.
• Superb, Self service mobile ad market place with deep targeting & analytics
• 200+ staff focused at mobile advertising starting August in 12 global locations
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ZestADZ USP• Open platform: Full data transparency to external
networks and exchanges through API
• Real-time analytics with deep insight into data
• Superb self service system; Various tools that drive performance mobile advertising.
• Great customer support; Massive global sales foot print as a part of Komli.
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ZestADZ Analytics
World class, real time analytics system that delivers key
data that could be used in significant performance
enhancements to the campaign
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Real-time Advertiser Dashboard
Quickly compare data
Expand to view details
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ZestADZ Advertiser View
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Tools / API
• Local advertising: ZestADZ is one of the pioneers of local mobile advertising.
• ZestADZ also has various tools that drive performance mobile advertising
• ZestADZ has the most open marketplace with full suite of API for publishers (or SSPs) and advertisers (or DSPs)
•
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Client Success
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