The programmatic industry is young and energetic, new tech pops up fast and trends fade away rather quickly.
In 2017 we saw video budgets breaking records in the programmatic funnel. In an effort to improve ad quality standards across the industry, both buyers and sellers demonstrated willingness to experience short-term loss. Consolidation became the new buzzword and only the strongest SSPs providing unique value to publishers were able to survive. So what will 2018 bring? Here are the 4 trends you should be jumping on this year.
Header bidding has been around for a few years now, but until 2017, it wasn’t relevant for the in-app community. As there’s no header bidding for apps, it’s time to get used to the term, parallel bidding, if you haven’t already. Similar to header bidding for websites, parallel bidding gives mobile publishers a way to connect to various demand sources simultaneously, and in turn, it helps them achieve better results for in-app advertising.
The traditional waterfall is still king at the moment as the preferred in-app mediation method, but soon parallel bidding will take its place. Google’s EBDA and Amazon’s A9 have been leading this development, but a number of small players with a technology edge (like MAX) are also gaining real traction from app developers. SSPs and exchanges will have to adjust and provide parallel bidding for developers if they want to stay on the market and to remain competitive; they’ll have also had to be available as a demand partner on external parallel bidding solutions. As for the video, there’s still no solution yet, but that doesn’t mean the industry isn’t working on one.
Video demand giants have been encouraging VPAID’s growing popularity over the last couple of years, and for a good reason: the demand side has all the power with VPAID because they manage the format. But this doesn’t work for developers who also want to maintain a level of control and not let just anyone play with their video players.
The industry needs a solution to mediate the needs of both supply and demand. For demand, the solution needs to measure ad quality and performance of the video with standardized performance metrics that show viewability and completion rates. For publishers, the solution should enable them to play the video on their assets. The good news is that this solution already exists in the form of VAST 4.0, but the industry has been slow to adopt it. This year, we expect to see wider use of VAST 4.0 across the board as the industry becomes more aware of the limitations of VPAID.
To maintain large budgets at full scale for the programmatic world, advertisers need to see stronger returns on their ad spend. Since 2017, the programmatic landscape has been in the process of improving its targeting capabilities with the introduction of large-scale audience targeting. SSPs are integrating DMPs and building their own “brains” to handle their big data and making audiences a priority. This tech challenge is almost behind us and business will soon follow. It will take time for DSPs to adjust as it’s still a walled garden controlled by the giants: Google, Facebook, and Amazon – but, it will happen eventually. With the new data-tech, users will be targeted in a much more accurate way. Users, faced with more relevant advertising, will enjoy a better experience, and in return, advertisers will see stronger ROI. As long as all of the players in this game will play fair and adopt measures like GDPR to protect individual users, everyone will benefit.
Ads.txt goes in-app?
Ads.txt was adopted faster than expected. Yet for the moment, it’s only a solution for desktop and mobile web and doesn’t address in-app inventory. As budgets continue to shift to the in-app market, finding a solution is now more important than ever to combat those who are manipulating auctions and masking their fraudulent traffic as legitimate traffic. A possible solution that could work is as simple as adding a domain field to the app stores. Once a solution like this is implemented, expect to see a shift in advertising power towards those with direct connections over arbitrage networks who offer little unique value.
What else should you know about for a successful 2019?
Supply path optimization
Supply path optimization’s been around since 2017, but we see its effect mainly since 2018 Q2. More platforms like SpotX and Oath are applying this method as a feature on their exchanges, joining a handful of older users. This solution should help buyers to purchase their white lists of bundles efficiently through media channels connected to the exchange they are using. As a result, they see better ROI, the developers get better CPMs that compensate in exchange for the decrease in fill rate. Like ads.txt, this trend will also support SSPs with direct integration.
In-App 1st Price Auction
In accordance to the rise of parallel bidding solutions for the in-app environment, we see more SSPs examining different types of auctions to challenge the traditional 2nd price auction. 1st price auction was a big NO-NO for DSPs in the in-app space, but gradually part of them was warming up the idea and are giving it a chance. The RTB protocol supports it with a relevant flag, and nowadays in-app SSPs build their supportive features to separate waterfall traffic from the parallel auction media. Transparency is a key to the success of this initiative which probably will gain more traction in the following months.