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.
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
Stake holders are growing 2011 2010 Online Ad Networks 2008 Open source Next Gen Pub side pub platforms Publishers and optimization advertisers Affiliate Agencies platforms Ad Networks Resellers Affiliate Agencies networks Creative Solutions Providers Pub Aggregators Digital and interactive & More agencies Traditional agencies Mobile Ad Platforms
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
Revenue split Sales Ad Agencies Ad networks 15% 20% Aggregators 10% Publishers 55%
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.
..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.
Some practices are unsustainable• 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;
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
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
Typical aggregator dashboardSome aggregators go sell advertising!Some Ad networks do Aggregator functions
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 Ad Network Ad Network #1 #2 Pub #2 Pub #3 Aggregator Agency / Ad Network Pub #1 Advertiser #3
Advertisers: Its all about performance •Pure CPA / CPL models • Want brand •Online networks promotion but at backfilling ads to mobile performance rates without without a great experience on mobile Top Brand Affiliate Advertisers Markets and Full and service Networks Agencies Digital Mobile Agencies / Content smaller brands • Driven by user • CPC / CPL Campaigns subscriptions; buy CPC primarily performance but must meet CPA driven goals
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)
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
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)
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;
Transparency increases the value of the impression Courtesy: Pubmatic
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
THE FUTURE OF MOBILEADVERTISING – AGGREGATORS /SSPS AND DSPS
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.
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
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.
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.
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:
How RTB Process Works Slide courtesy: Pubmatic whitepaper
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;
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
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.
ZestADZ AnalyticsWorld class, real time analytics system that delivers keydata that could be used in significant performanceenhancements to the campaign
Real-time Advertiser Dashboard Quickly compare data Expand to view details
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)•