• Curiosity and excitement about the opportunities for increased scale, operational efficiency, better targeting and even interest in the platforms themselves, or
• Hesitation and concern about content and audience quality, devalued inventory, a lack of transparency, and a loss of control on both sides of the table
Once the topic swings to the intersection of programmatic and mobile, even some fans of programmatic start to get a little hesitant. That’s because, despite more spending and interest, many media companies are still struggling to monetize their increasingly mobile audiences, and advertisers often experience frustration when trying to reach them. This is partly because it’s a new screen and in an earlier stage of development than other digital channels, but more importantly, they face challenges with the unique technology requirements of the in-app environment, where users spend more than 80% of their time.
Still, convergence is coming; eMarketer forecasts that mobile will account for more than half of all programmatic spend this year. At $8.3 billion, that means programmatic mobile products and platforms will represent a larger portion of revenue for publishers and help improve campaign performance for marketers.
More importantly, within the same forecast, eMarketer notes that open exchanges will grow just 4% this year, while private marketplaces are projected to grow a whopping 128% – with a growth of 200% from 2014 to 2015.
Why private marketplaces?
The open exchange, where any buyer can look at any slice of inventory and bid via an automated tool like a DSP, was really the “first wave” of programmatic. Open exchanges present both advertisers and publishers with a tremendous amount of scale and efficiency, particularly when matching a buyer’s real-time demand with a publisher’s unsold inventory.
But it’s not the perfect match for what premium publications and brands want out of the programmatic, which is a deeper set of controls. On the supply-side, publishers and developers seek more control over which buyers have access to their best inventory and the ability to exert some level of price control on that inventory. On the demand-side, brand advertisers want to be assured that their ad will appear in premium, brand-safe environments, with better targeting and greater transparency.
Enter private marketplaces (PMPs) and programmatic direct deals, which is a one-to-one matching of buyers and sellers within the upfront, negotiated arrangements of the private marketplace. It’s all of the scale and operational efficiency of an open exchange, but a smaller sub-set of ‘screened’ buyers and sellers.
Mobile is an ideal medium for ‘premium’ programmatic
Creating that smaller sub-set of buyers and sellers is key for mobile, as smaller screens and the highly personal nature of mobile devices demands that more attention be paid to ad quality and relevance. In some ways, what the market needs are ‘curated’ mobile marketplaces so that buyers feel comfortable with what they are bidding on and sellers know they are working with only the highest-quality brands.
The rapid innovation of mobile products and fragmentation of mobile technology, too, is a significant factor, as participants in a private marketplace can build their exchange around highly-specific or unique mobile technology, such as early session impressions within apps or video that plays instantly within a user’s feed.
And it only gets better from here
Premium programmatic in mobile is created through a combination of automation and curation. That means platform-based buying to replace manual I/Os, impression-level bidding, and data-enabled targeting among handpicked groups of buyers and sellers. The automation delivers efficiency and scale, and the curation ensures the highest-quality experience on both sides.
Sounds pretty great, right? But we are only just starting. Mobile has pushed programmatic into an exciting new phase, but the door is just starting to open.
As both publishers and advertisers gain an even better understanding of their audiences, integrating bigger and better data segments, premium programmatic buys will become even more appealing. And, as more proprietary technologies are developed and new, high-impact ad units become available, premium programmatic could easily become irresistible.