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Demand for programmatic buying in mobile has skyrocketed in 2013. At the IAB, we saw this trend unfolding and launched the Mobile Programmatic Buying Working Group, led by Joe Laszlo as staff manager and Victor Milligan of Nexage as chair, to address this rapid growth and the unique aspects of mobile programmatic. As the working group’s leaders, we co-wrote this post to outline some of the key takeaways from the group’s conversations, and share our thoughts for 2014.
While there are certainly similarities between PC and mobile programmatic, the differences warrant a working group dedicated to mobile. These differences are critical design points for publishers, exchanges, buyers, agencies, and advertisers, and include:
- Mobile’s unique and massive applications and game ecosystem
- Mobile’s data model that is built absent a universal, persistent third-party cookie
- Mobile’s unique targetable data including location (notably lat/long), mobile OS (iOS and Android), carrier, connection type, and device types.
- Mobile’s form factor and the importance of creative that is optimized for smartphones and tablets
The Mobile Programmatic Buying Working Group brings together 40 individuals at a diverse array of IAB member companies with a shared interest in how programmatic is evolving in mobile and how the IAB can help members understand and fully capitalize on programmatic.
The group’s first task was to organize the broad concept called programmatic and focus on those items important—and unique—to mobile.
Given that programmatic has come onto the digital landscape quickly and that programmatic itself describes a family of technologies, we needed to itemize and define the different programmatic markets. Aligned with the IAB Programmatic Publishers Task Force, we identified four types of marketplaces:
- Automated Guaranteed (reserved inventory at a fixed price, just transacted via an exchange, also known as programmatic reserved or guaranteed)
- Unreserved Fixed Rate (unreserved inventory at a fixed price, also known as preferred deals or first right of refusal)
- Invitation-Only Auction (unreserved inventory sold at auction, but to a select number of potential bidders, commonly referred to private marketplace or exchange); and
- Open Auction (unreserved inventory sold at auction, to any bidder, usually using real-time bidding [RTB]).
Although the world of ad exchanges (in both PC and mobile) started with a largely open auction model, other models such as various forms of invitation-only auctions like exclusive or first-look private exchanges have generated a great deal of interest from publishers and buyers alike. A recent analytics report from Nexage describes trending in programmatic and the extraordinary uptake in private exchanges, as publishers and buyers become more comfortable and adept at using private exchanges to accelerate their businesses.
The task force then began to discuss key mobile programmatic issues that will guide our work. Examples include:
- The data model: The lack of cookies in mobile has an impact across most elements of programmatic buying. Because third-party cookies are not typically available, mobile ad inventory relies on proprietary means of targeting, tracking, and accountability, which aren’t always articulated clearly to buyers. Nexage views exchanges in all their various manifestations as serving as a critical integration point between first-party data (e.g., from the publisher/network/inventory owner), brands’ CRM data, and third-party data.
- Targetable data: There are a number of data types that apply in mobile that don’t have PC analogs, including location, operating system, carrier, network connection (wifi, 3G, 4G, etc.), and even handset maker/device model. Some of the parameters, are sometimes considered complicating aspects of mobile fragmentation, but they can be better seen as methods for better targeting in an exchange setting, providing a valuable proxy for consumer demographics (e.g., iPhone users are different from Android users).
- Transparency: Ensuring that programmatic is not a black box but a clear box where transparency aids impression level decisioning is a priority. For example, latitude/longitude (lat/long) is a critical parameter for hyperlocal campaigns, but not all lat/long data are created equal. Some are GPS derived, but others are derived from zip code or post code, called centroid lat/long, which are far less precise. Some exchanges already have business controls to enable buyers to know which is which and target and price accordingly.
Across both PC and mobile, programmatic is shifting from a disruptive force to a valuable (and necessary) solution connecting ad buyers with desired ad opportunities. As we get into 2014, we have several ambitions for our working group:
- Analyze the issues related to mobile programmatic’s unique factors to help members best understand and capitalize on the opportunity.
- Provide input to the IAB’s other programmatic efforts, making sure that mobile’s unique aspects are represented.
- Continue to serve as a forum for exchanging experiences and sharing knowledge.
- Start collecting emerging good or best practices and case studies to illuminate what is working for buyers and sellers alike.
- Organize an industry town hall conversation to help disseminate our learning to marketers and agencies that need it.
It’s been an exciting year for mobile programmatic buying, and next year promises to be even more so. We’re looking forward to kicking the Mobile Programmatic Working Group into high gear, addressing challenges and ensuring continued growth for everyone.
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