This sponsored post is produced in association with Appodeal.
Until recently, monetizing through ads has not provided a level playing field for app publishers with impressions to sell.
The technology, processes, and margins involved have all favored buyers who have been able to dictate the market, largely because they’re the ones with millions to spend.
But a new development in advertising sales that leverages a real-time auction-styled approach as a way for publishers to monetize in-app ad inventory on a piecemeal basis is changing the game for sellers — and giving them greater control over the sales process, and a bigger piece of the ad revenue pie.
The evolution of advertising
The sad truth is that ad networks don’t much care about publishers’ revenues.
In a traditional mediation, app publishers (aka sellers), use waterfall methods to manage traffic with a few selected ad networks that mediate things between publishers and advertisers. These methods create a lot of work for the publisher, with ultimately limited opportunity to scale or realize returns.
Real Time Bidding (RTB) marketplaces favor advertisers (aka buyers), as well. In these scenarios, advertisers use automated one-time bids to negotiate the best ad placements and Cost per Thousand (CPM). If you’re using mediation, congrats — it’s a lot better than dealing directly with ad networks. But, still, it’s an old way of doing things that tends to leave app publishers mystified at the process and light-pocketed.
Programmatic ad mediation (or real-time auction based selling), however, is something quite new that offers much stronger value propositions for app publishers.
Real-time auction-based selling — aka programmatic mediation — levels the playing field for app publishers
Basically, auction-based selling is the opposite of auction-based buying. It uses an RTB-like approach leveraging programmatic mediation that’s been modified to service the seller’s side of the market equation, rather than the buyer’s — creating new opportunities for publishers to monetize.
The transparent process begins when a user opens a publisher’s app, thereby creating screen real estate for an advertiser to appear on. This triggers a bid request via an ad network (RTB or any other demand side of mobile ad marketplace), which passes the opportunity along to advertisers who bid on that individual impression. Whoever bids the most, wins the impression — and their ad gets served up to the user inside the publisher’s app. This process, which takes maybe one-tenth of a second, happens over and over, every time a new in-app impression becomes available. This is where the future for app publishers really lies.
The benefits of auction-based selling for publishers are multiple:
First, publishers get access to the entire marketplace, meaning they can take advantage of both traditional ad networks and mediators, as well as RTB methods. This gets publishers the power to access both traditional ad networks such as Admob, Adcolony, and the Facebook Audience Network, as well as OpenRTB-enabled bidders and other RTB marketplaces, like Liverail or Spotxchange.
Second, with auctions, buyers can change their bids multiple times, rather than just bidding once, creating a more competitive marketplace and improving CPM revenues for sellers. Every auction is open and all bids are transparent to everyone. Every demand source is allowed to increase their initial bid for impression to outbid the other guy. It’s a continuous process that happens almost instantly.
Third, programmatic ad mediation combats missed revenue opportunity as a result of second price auctions. How do those work? Let’s say Buyer A bids $5.00 for 1,000 impressions on a publisher’s app, and Buyer B bids $3.00. Buyer A wins and pays the $5.00 CPM, right? Wrong. RTB marketplaces that favor buyers reduce that amount to match the second-highest bid ($3.00) in order to ensure the buyer always gets the best possible deal. Seller-side auction solutions solve that problem by setting dynamic price floors. That puts the power back in the hands of publishers by ensuring higher revenues and better margins.
Finally, programmatic mediation means publishers are able to offer data-enriched bidding opportunities. Every auction comes with real-time user data, including age, sex, address, zip code, GPS, income, etc. The value of this data to advertisers in targeting specific market segments commands higher bids, again increasing monetization opportunities for publishers.
Keep in mind, that programmatic mediation — or auction-based selling — is still very new. Not a lot of publishers even know it exists.
One of the early entrants in the space, Appodeal, is making its mark by offering a single SDK and account to connect to all the major ad marketplaces, cross platform promotion, no fees for publishers, and immediate payouts — a significant benefit for cash-strapped app publishers.
Go-forward, auction-based selling may well become the standard for how publishers offer in-app impressions to advertisers. Certainly, the technology can create an immediate opportunity for publishers long marginalized by an uneven playing field to grab a larger share of advertising revenues in a way that is non-disruptive to the publisher’s core strength of making great apps.
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