Welcome to the mobile programmatic world. In short order, mobile has become consumers’ primary screen and will soon be the second largest advertising spend behind only TV. In parallel, programmatic has quickly become the foundation of digital and mobile advertising and will soon support 80% of spend.
We all saw it coming: the consumers massive shift to all-things mobile changed the advertising landscape. At the same time, the shift to high-volume transaction technologies was necessary and inevitable to allow advertisers and agencies to operate in mobile and cross-screen, enable them to automate costly and inefficient processes, and successfully follow and engage consumers throughout the day. We may have seen the shift to mobile programmatic coming, but it still came upon us quite quickly.
And now it is time to mobilize and meet the opportunity (or avoid the risk of standing still).
Winning in a mobile programmatic world means taking full advantage of what mobile programmatic has to offer.
The different types of markets that are available to allow you to buy programmatically are:
> The open exchange: this is the basic building block where publishers and media buyers trade in an open-market environment, primarily through auctions
> Private exchanges: these are markets that are set up by publishers to sell specific inventory to selected buyers. Media buyers benefit from private exchanges as they gain first-look at inventory but nonetheless, buyers that are part of the private exchange compete via auctions.
> Programmatic direct: these are exclusive markets between a publisher and typically an agency (via the trading desk). Simply put, programmatic direct automates the direct relationships that may already be in place, combining the productivity of direct relationships with the power or programmatic buying.
Some programmatic platforms offer all three and enable publishers and agencies to trade in all three markets at the same time. It is all about giving market participants the flexibility to take advantage of different types of markets to support their mobile programmatic strategies.
As publishers, advertisers, and agencies form and execute their mobile programmatic strategies, several trends are becoming clear:
> Mobile is different: an early and failed strategy is to treat mobile merely as an extension of desktop. But there is no cookie, the creative is different, and there are different and new targeting parameters (e.g, carrier, OS, GPS lat/long). Perhaps the larger point is that mobile is already the primary screen for consumers and is central to any cross-channel campaign. Advertisers and agencies have shifted gears, putting in place mobile strategies and capabilities with mobile-native partners, to ensure that they excel at the consumers’ primary and most personal medium.
> App as premium: Across all markets, advertisers, their agencies and media buyers are becoming more and more familiar with targeting mobile apps and games. This targeting strategy makes perfect sense. Just look around, the same consumer advertisers and agencies target on desktop websites are heads-down playing Angry Birds or using weather applications. It is the new normal. It is increasingly part of the core mobile targeting strategy.
> Significant liquidity gains in the open market: The open exchange, which for Nexage consists of both RTB (auction) buying and mediation, is growing rapidly as more and more publishers and advertisers begin executing their mobile strategies in earnest.
> Preference for first-look: Media buyers have responded to the different private exchanges set up on the Nexage Exchange. Private exchange spend has grown significantly faster than overall mobile growth as buyers respond to first-look advantages; namely, access to high-value inventory and greater certainty that the impressions will be available. To give this some proportion, the percentage of private exchange spend grew from 5% to 30% in two years and continues to grow rapidly.
> High-preference for programmatic direct for some advertisers and agencies: Programmatic direct has opened up new opportunities for advertisers and agencies. Some advertisers are taking programmatic buying in-house to gain direct control of decisioning; some agencies have strategies that will almost exclusively use programmatic direct markets to avoid any competition for inventory and audience that they want. Not surprisingly, programmatic direct will soon be the fastest growing type of market and within two years, supporting the majority of spend in the premium segment.
The advertising market is evolving rapidly but steering to a very clear destination: mobile programmatic. Welcome to the mobile programmatic world. And it’s clear that publishers, agencies, trading desks and advertisers are adapting to the new reality by putting mobile-specific strategies in place. It’s even more apparent that private exchanges and programmatic direct markets are critical instruments to fuel growth for both buyers and sellers.
Read the first piece in the series, At the Intersection of Mobile Advertising & Programmatic Technology, here.
By Victor Milligan, Chief Marketing Officer at Nexage.
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