Top Trends That Will Shape the Future of the Mobile Advertising Industry ARNDT GROTH PRESIDENT, SMAATO
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1 Top Trends That Will Shape the Future of the Mobile Advertising Industry ARNDT GROTH PRESIDENT, SMAATO
2 Complexities of Mobile Programmatic Who Are All the Players in Mobile Programmatic Advertising? Demand Side Smaato Platform Supply Side Advertisers Agencies & Trading Desks DSPs & Demand Partners App Developers & Mobile Publishers Ad Networks DSPs The Leading Global Real-Time Advertising Platform for Mobile Publishers & App Developers 90,000+ Publishers & Developers Advertise To Get Customers Buy Audiences Buy/Sell Publisher Inventory Aggregate/Enrich Publisher Inventory Deliver Relevant Ads Request Ads 4/4/2018 2
3 Direct Relationships With 90,000+ Publishers & App Developers Worldwide 1+ Billion Monthly Unique Mobile Users and 500+ Billion Monthly Impressions Advanced Traffic and Audience Targeting Private Marketplace Options Connecting Advertisers to the World s Mobile App Audience Transparently & Securely Connected to Over 450+ Founded in 2005 DSPs & Ad Networks Clean, Protected Mobile Advertising Marketplace & almost 100% Fraud Free Global Real-Time Bidding Ad Exchange Serving 91 of Top 100 Ad Age Advertisers San Francisco New York Hamburg Singapore Shanghai
4 Top Mobile Advertising Trends For 2018 and Beyond Complexities of Mobile Programmatic Mobile Video Advertising In-App beats Mobile Web Transparency Enhanced Attribution: Digital to Offline General Data Protection Regulation (GDPR) 3/28/18 4
5 Complexities of Mobile Programmatic Our Industry Continues to Evolve Copyright 2017 Smaato Inc. All Rights Reserved. 4/4/2018 5
6 Complexities of Mobile Programmatic Copyright 2017 Smaato Inc. All Rights Reserved. 4/4/2018 6
7 Complexities of Mobile Programmatic Our Industry Continues to Evolve Copyright 2017 Smaato Inc. All Rights Reserved. 4/4/2018 7
8 The Industry Is Moving Towards First-Price Auctions First-Price Auction Second-Price Auction Advertiser A bids $2.00 Advertiser B bids $3.00 Advertiser C bids $4.00 Winner! Advertiser A bids $2.00 Advertiser B bids $3.00 Advertiser C bids $4.00 Winner! Clearing Price Clearing Price Advertiser C pays $4 for the inventory Advertiser C pays $3.01 for the inventory 3/12/18 8
9 Reduction of Buyer Fees Exchanges have long charged additional fees to buyers Fees are often not transparent or communicated effectively To improve transparency, buy-side fees are being reduced or eliminated throughout the industry Smaato does not charge buyer fees 3/12/18 9
10 Supply Path Optimization Untangling the Mobile Programmatic Supply Chain Both buyers and sellers can optimize the supply path by building and choosing partners with direct relationships Buyers optimize their ROI Sellers maximize their revenue 3/12/18 10
11 Header Bidding 3/12/18 11
12 Ads.Txt for Mobile The Interactive Advertising Bureau's method of preventing digital advertising fraud # Ads.txt file for example.com: greenadexchange.com, 12345, DIRECT, d75815a79 silverssp.com, 9675, RESELLER, f blueadexchange.com, XF436, DIRECT orangeexchange.com, 45678, RESELLER silverssp.com, ABE679, RESELLER Publishers place a publicly accessible "ads.txt" file on their server describing what supply-side platforms and networks are allowed to sell their inventory Currently used for web-based advertising but being considered for apps 3/12/18 12
13 Mobile Video Advertising 3/28/18 13
14 Mobile Video Advertising Video Ad Spending Is Skyrocketing Ad Spending Growth by Mobile Video Ad Format, Q vs. Q Interstitial Video +97 % Instream Pre-Roll Video +102 % Rewarded Video +32 % Outstream Video +60 % Source: Smaato Publisher Platform (SPX) - Q vs Q /28/18 14
15 Mobile Video Advertising Advertisers Investment in Video Continues to Grow Mobile Video Ad Spending Growth, Q Q Source: Smaato Publisher Platform (SPX) - Q Version - Q /28/18 15
16 Rewarded Video An effective method for gaining informed clicks and high-quality conversions is to use rewarded video ads. Since this ad format is opt-in, with users choosing to watch in exchange for a reward, it has the highest viewability rates of any mobile ad format. Technology: Vast standard User Experience: Forced ad, non-skippable Tracking: Quartile / VTR etc. Placement: In-app games Viewability: 100%, full-screen Price: Medium range: $ $6.00 3/12/18 16
17 In-App beats Mobile Web 4/4/
18 In-App beats Mobile Web Enables Reliable 21+ Month User Tracking TV 1950s 1980s Internet 1980s 2010s Apps 2010 Present Mass Audience Tracking Consumers Now Spend 90% of SmartphoneTime In-App Cookies Track Where Users Go Can easily be deleted Not standard across browsers No GPS Device IDs, Smaato ID & GPS tracking Where users go What they do there What they do over time 4/4/
19 Advantages of In-App Mobile Websites vs. Mobile Apps 3/28/18 19
20 Transparency 3/28/18 20
21 Transparency Buzzword or Necessary Reality? Advertisers Put Transparency on the Top of Their 2018 To-Do Lists Digiday Is Transparency Fueling Advertiser Paranoia? Ad Exchanger Why Transparency and Sustainability in Programmatic Matter Now, More Than Ever Huffington Post 3/28/18 21
22 Transparency Three Shades of Transparency Inventory Partner Cost 3/28/18 22
23 Enhanced Attribution: Digital to Offline 4/4/
24 Enhanced Attribution: Digital to Offline A Consumer s Journey: Pre-Mobile World VIEWS BRAND ADS Watches TV/Online ads that create brand awareness. VISITS STORE Enters store, where 70% of purchase decisions are made. ENCOUNTERS IN-STORE PROMOTER Meets promoter in-store who explains product benefits or samples product. PURCHASES PRODUCT/BRAND Purchases product at cash register in cash or via credit/debit card 4/4/
25 Enhanced Attribution: Digital to Offline A Consumer s Journey in a Mobile-First World VIEWS BRAND ADS Watches Mobile/Online ads that create pre-purchase brand awareness. Concept of primetime is now gone. SEES MOBILE AD NEAR STORE Frequency-capped geo-targeted mobile ads within X km/mile radius of store bring qualified consumers into store. VISITS STORE Enters store, where 70% of purchase decisions are made, knowing there is a special event/promotion taking place. ENCOUNTERS IN-STORE PROMOTER Meets promoter in-store who explains product benefits or samples product. DEVICE ID MATCHING: 21+ MONTHS USER DATA Device ID Device OS Carrier Campaign ID USER DATA USER DATA Age GPS Country Gender USER DATA USER DATA MARKETING ROI - AD/PROMO SPEND - STORE VISITS - FIRST PURCHASE - REPURCHASES REWARDED CONSUMER SCAN/PHOTO ATTRIBUTES PURCHASE AND THEN RETARGETING BEGINS Triggers attribution by scanning product UPC/QR Code in exchange for reward. Retargeting begins. PURCHASES PRODUCT/BRAND Pays for product at register, potentially with NFC mobile payment. RECORDS BEACON Promoter has a beacon in her pocket, which is received/noted on consumer s app. 3/28/18 25
26 General Data Protection Regulation (GDPR) 3/28/18 26
27 General Data Protection Regulation (GDPR) Example of Custom UI (Simple Consent) Level 1: Simple consent collection for all selected vendors and purposes 3/28/18 27
28 General Data Protection Regulation (GDPR) Example of Custom UI (Purpose-Level Consent) Level 2: Purpose-level consent options for consumers 3/28/18 28
29 General Data Protection Regulation (GDPR) Example of Custom UI (Vendor-Level Consent) Level 3: Vendor-level consent options for consumers 3/28/18 29
30 General Data Protection Regulation (GDPR) Encoding Choices for Storage & Transmission Purpose Choices 1. PURP1 2. PURP2 3. PURP3 4. PURP4 5. PURP5 Vendor Choices 1. SSP1 2. SSP2 3. Exchange1 4. X Exchange2 5. Exchange3 6. DMP1 7. DMP2 8. DMP3 9. DMP4 10. X DMP5 11. X DMP6 12. DPM7 13. X DMP8 14. DMP9 15. X DSP1 16. X DSP2 17. DSP3 18. DSP4 19. X DSP5 20. X DSP6 21. DSP7 22. DSP8 23.X DSP9 24. DCO1 25. DCO2 26. DCO3 27. DCO4 28. DCO5 29.X DCO6 30.X DCO7 31. DCO8 32 X DCO9 33. Viewability1 34. X Viewability2 35. Viewability3 36. Viewability4 37. Viewability5 38. X Viewability6 39. X Viewability7 40. Viewability8 41. X Viewability9 Purpose Choices String Vendor Choices String P U R P 1 P U R P 5 D M P 2 D S P 7 Compressed Value 3FDF299BE572 3/28/18 30
31 General Data Protection Regulation (GDPR) Transmitting Approved Vendors and Consent Consent Payload: 3FDF299BE572 appended to every request Publisher 3FDF299BE572 3FDF299BE572 Publisher Ad Server 3FDF299BE572 SSP1 SSP2 3FDF299BE572 Exchange1 Exchange2 Exchange3 DMP2 DSP1 DMP 3 DSP2 DSP3 Advertiser Ad Server DCO1 Viewability1 Advertiser Ad Server DCO2 Viewability2 Advertiser Ad Server DCO3 Viewability3 DMP6 DSP6 DMP 7 DSP7 DMP 8 DSP8 Advertiser Ad Server DCO6 Viewability6 Advertiser Ad Server DCO7 Viewability7 Advertiser Ad Server DCO8 DMP1 Has consent DSP4 DMP 4 Advertiser Ad Server DCO4 Viewability4 DMP 9 DSP9 Viewability8 Advertiser Ad Server DCO9 Advertiser Ad Server Viewability9 Doesn t have consent DSP5 DCO5 DMP 5 Viewability5 3/28/18 31
32 General Data Protection Regulation (GDPR) Decision Tree Beginning on May 25, 2018 EU Traffic Online Behavioral Advertising Allowed No GDPR Unlikely EU Resident (Publisher Provided) Yes GDPR Applies. Is DSP GDPR-Compliant? GDPR Impression With Consent No Unknown Yes Consent Available? (Publisher Provided) Yes No Age < 16? No Yes, No Consent GDPR Applies, Consent Available GDPR-Compliant Not GDPR-Compliant GDPR Applies, Consent Not Available GDPR-Compliant Not GDPR-Compliant Only Context Advertisement Allowed No Profiling No Automated Decisioning Drop Age, Gender, Location, etc. Original ID Frequency Capping Over Several Exchanges Hashing of ID [Enforcing Context Advertisement] 3/28/18 32
33 Thank You Questions? ARNDT GROTH PRESIDENT, SMAATO ABOUT SMAATO Smaato is the leading global real-time advertising platform for mobile publishers and app developers. Smaato runs the world s largest independent mobile ad exchange and has been pioneering innovative, mobile-first solutions for publishers since Smaato s SPX is a global, intelligent and free-to-use self-service platform and ad server that brings native, video and real-time advertising to over 90,000 app developers and mobile publishers. The company s worldwide reach and extensive network of demand partners provide a massive variety of advertisers with one single integration. Smaato manages up to 19 billion ads every day around the world, across over 1 billion unique mobile users each month. San Francisco, CA T: +1 (650) americas@smaato.com New York City, NY Tel: +1 (646) americas@smaato.com Hamburg, Germany T: +49 (40) emea@smaato.com Singapore, SG T: apac@smaato.com Shanghai, China T: apac@smaato.com
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