supersonic-logoThe mobile advertising system has exploded — but it’s also left many overwhelmed and confused. In this series titled “Maximizing Mobile Ad Monetization” and presented by Supersonic, publishers learn how to take back the reins and navigate the intricacies of mobile advertising. See the whole series here.

In the first part of the series, we explored the latest trends in mobile advertising today, and the implications they pose on the ecosystem of tomorrow.

The mobile ad channel is primed for brands and marketers with seemingly plenty of opportunities for publishers. There is a convergence of industry trends — a ‘stars-are-aligned’ type of significance — that screams “jump in”. A cross-road of cultural, consumer, and  cash craze that pledges growth. But also competition and saturation.

To gain an edge, developers depend on a variety of tools to help understand and capture a part of the growing ad spend pie. Here is the what, why, and how mobile ad mediation is at the top of their tool shed.

What is ad mediation?

In the ad marketplace, app developers each deliver a certain amount of ‘ad supply’ to the global pool. ‘Ad supply’ refers to available instances within an app when a mobile ad can be shown. This supply is filled by ‘demand’ from agencies, brands, and marketers who provide the actual ad themselves. There is an abundance of ad networks, each with their own unique set of demand, that also help fill this supply.

Developers find that the best demand is spread across various ad networks. To cohesively capture this demand, they must work with multiple networks simultaneously.

Ad mediation is software technology that solves this disconnect. By organizing disparate ad networks, mediation enables transparency and access of all available demand sources into one, centralized platform.

Mediation optimizes key ad network data like: response time, fill rate, eCPM and CTR. These metrics can then be mapped against filters like: region, app type, and device format in real time, to help developers find the most relevant and highest paying demand for their ad supply.

Why is it important?

Mediation is essential to ad monetization as it enables deeper control over how, when, and to whom ad inventory is sold. Prior to such technology, the selling of ad space was like the wild west. Manual management of individual ad networks and endless purchase IOs were cumbersome and unfortunately the standard. These formalities inundated the marketplace, creating constant shifts in price dynamics. Developers craved for more clarity and oversight.

The introduction of mediation technology leveled the playing field by encouraging real-time competition among networks. At a snapshot, users can see which networks perform the best and for which Geo segments they wish to target. This insight allows developers to create their own ad marketplace, so to speak, driving up relevancy and revenue per ad slot as a result.

The main technical distinction of ad mediation is that it eliminates SDK fatigue. Through a single kit, developers can integrate multiple demand source SDKs and manage them from a centralized dashboard — all without pushing new updates to the app store each time a new partner is added. This consolidation effectively reduces the size of their mobile apps and development time.

Beyond the technical benefits, ad mediation allows publishers to deliver richer ad experiences. Ads filled by the most relevant provider, as a result of smart mediation, generally lead to higher engagement. The better engagement, the more advertisers are willing to pay for that slot. This creates a positive feedback loop that boosts eCPM and fill quality for the app.

How does it work?

Traditional mediation platforms utilize what’s called a ‘waterfall’ approach when optimizing its ad networks. The waterfall system prioritizes and orders integrated networks, also known as buckets, according to their total potential revenue.

When a developer requests an ad for fill, the highest performing bucket is called for continually until its ad pool is completely used up. The system then moves on to the next bucket until supply is filled.

Since networks are defined by this single metric, ad performance can be over or understated. This means that developers end up requesting an entire ad network’s demand, both high and low performing, before moving to the next ad bucket. The standard waterfall approach, although simpler to manage, minimizes revenue.

The latest mediation platforms remedy this by using a ‘weight system’.

Instead of fixing an ad network’s waterfall location based on overall eCPM, each network is assigned and prioritized by their ‘weight’. Weights are determined by the performance of one network relative to another, thus giving developers a more holistic view of available demand.

This results in only the top pool of ads from each bucket being requested, ensuring developers fill high-performing ads in parallel first before moving onto lower paying content.

Developers report an average 40 percent increase in overall ad revenue from a weighted mediation system.

Although Ad monetization is just one piece of the app puzzle, it can often seem the most daunting. With tools like meditation in place, it doesn’t need to be.

Terry Koh is the Content Marketing Manager at Supersonic. Supersonic powers the largest mobile video mediation platform trusted by the world’s top publishers and developers. Connect and follow us on Twitter @SupersonicAds.

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