Programmatic Strategies Drove Upwards of 50% Mobile CPM Gains for Premium Publishers in Q1

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QMIQ1 SLIDER

According to the billions of impressions from PubMatic’s platform, it’s been a very strong first quarter for the global mobile advertising space. Released today, PubMatic’s Q1 2016 Quarterly Mobile Index (QMI) report found that ad inventory value on both mobile app and mobile web increased substantially, with CPMs (cost per thousand ad impressions) on mobile app up 67 percent and on mobile web up 57 percent year-over-year. For publishers and advertisers, this demonstrates increasing ad quality and value across both mobile platforms.

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5 Ways Publishers Can Make the Most of Real-Time Data

real-time data

As an increasing amount of data flows through the media industry, publishers need to understand how to make the most of this opportunity in their programmatic ad sales. A recent study from Forrester Consulting, Real-Time Data Analytics: Empowering Publishers To Make Better, Faster Decisions, reveals how publishers can make smarter, more informed business decisions that drive revenue growth. Below are five important steps that publishers can take to ensure they are capitalizing on real-time data: 

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3 Ways Publishers Can Get Ahead of Real-Time

real-time analytics

The major shift in ad spend away from traditional media to digital media presents an enormous opportunity for publishers. However, this shift as well as the move toward programmatic sales adds new challenges for publishers. One of the most significant challenges publishers now face is managing and analyzing the mountains of sales data being created each day as they sell and serve millions of ad impressions in real-time.

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Three Things Publishers Should Demand from Programmatic Analytics

By Alaric Thomas, Director of Product Management, Big Data and Analytics at PubMatic
Analytics ImageTechnology accelerates everything it touches. Nowhere does that seem truer these days than in the ad sales market. In the time it took you to read the previous sentence, millions of digital advertising impressions were auctioned and served.

Yet, while everything in ad sales seems to be speeding up to real-time, one thing has noticeably lagged – reporting and analytics solutions for publishers. Many publishers feel like they are playing catch-up to the sophisticated analytics solutions that buyers use to make decisions. Publishers are also wasting time trying to find critical data within overly-complicated reports. Finally, publishers struggle to understand the value of their inventory and how they are performing against rival publishers.

Programmatic advertising is creating mountains of data everyday. Publishers that can harness that data into actionable insights will be able to drive better business outcomes. They will be more successful than rivals that aren’t able to convert all that data into value. With that in mind, I present three things every publisher should demand from their analytics solution.

Real-Time

This is a real-time market, and a real-time market demands real-time analytics. Real-time analytics allows publishers to identify and immediately react to market trends, as well as uncover new opportunities as they happen. Instead of getting frustrated as they become aware of opportunities too late to take action, publishers can instead take advantage of changes in the market in real-time resulting in increased revenue.

You wouldn’t manage your retirement portfolio by relying on a stockbroker who uses stale market information. Therefore, publishers shouldn’t rely on programmatic solutions that don’t provide up-to-the-minute data about the market that they transact in.

Simple to Use and Easy to Decipher

Analytics shouldn’t bury publishers in mounds of data, or complicated reports that are difficult to understand. Instead, publishers should expect an interface that is easy-to-use and provides functionality that makes it simple to find critical data. Ideally, this means having a natural language processing capability that empowers casual and power users to search for data by just typing in questions using every-day language. The analytics solution should also provide visualization features, such as graphs and heat maps that make it easy to identify trends and data outliers.

Competitive Actionable Insights

Until now, the real-time ad sales market has been a black box for information. One way to open up the black box is for publishers to demand competitive insights that give them a view into the wider market. This means getting access to competitive data that provides insights into how a publisher’s inventory is performing against its peers. This type of actionable competitive insight will result in optimizing pricing and packaging strategies allowing publishers to maximize their overall revenue. Publishers could then also increase revenue by identifying new potential advertisers that are advertising on competitive publisher properties.

At PubMatic we believe publishers need robust analytics in today’s data-driven programmatic marketplace. As the leader of the PubMatic’s Big Data and Analytics Product Management Team, I am proud to be part of a company that is revolutionizing analytics in the programmatic advertising industry. This includes launching the industry’s only analytics solution to provide real-time data, and the industry’s only competitive benchmarking solution which allows publishers to make smarter business decisions that increase revenue.

If you’re interested in learning more about PubMatic Analytics you can view details here.

Apple Watch and Wearables Could Change Advertising But Not How You Think

DSC_2004By Dan Wilson, Senior Director Mobile & Video, PubMatic

To publishers and advertisers, the Apple Watch must seem like the latest in a never-ending proliferation of media screens. And if past is prologue, with each screen comes new opportunities for advertisers and publishers.

However, at the risk of stating the obvious this latest screen is on a watch. And watch displays are really small. And even if that wasn’t true, are people really ready to see an ad appear on a device that is strapped to their wrist?

Needless to say, it is very early days for both the watch and tech wearables generally. But that doesn’t mean it’s too early to start trying to predict the impact of this latest flavor of media consumption on the advertising space. So let me try by outlining three of the implications for advertising that I see arising from the watch.

1) The watch will be an accessory to advertising not an advertising platform.

In the beginning, the watch will feed data about the wearer back to the iPhone and that could allow Apple to make better recommendations in the App store or iTunes based on that data. I suspect Apple will guard the data and real estate on the Apple Watch screen very closely, so those opportunities will be closed off to rest of the media ecosystem.

However, once there is wider adoption of watches and wearable’s in more open ecosystems – like Android – there will likely be more opportunities for advertisers and publishers. So this is really just opening the door to wearables and initially we should expect them to serve more as a potential input device for data that can inform advertising on other screens rather than a screen for displaying advertising.

2) Publisher and Advertisers Will Need Some Time To Figure it Out

Publishers and advertiser absolutely need to be thinking about how the Apple Watch will impact their ability to reach consumers but they won’t figure that out tomorrow. Therefore, I don’t think they need to scramble quite yet but they need to start to consider the watch as part of the overall consumer media experience.

So if you’re a publisher or an advertiser you should go out and buy a bunch of Apple Watches for the people in your organization and road test them over the next few months. You can then match your experience with the watch experience against how the market is adopting the device. You’ll want to see how it’s changing consumer behavior and how you need to evolve your consumer engagement strategy as a result.

3) Don’t Confuse More Screens With More Time or Permission

The Apple Watch is one more screen competing for the consumer’s attention. If you’re looking at your watch then you’re not looking at your phone. And since the its clear that Apple sees the watch as a device that will receive push notifications, the watch may actually reduce the amount of times that users pick up their phones during the day.

That would make the times when people are using their phones more valuable. So advertisers need to ensure that they are delivering the best mobile experience possible by matching the right creative with the right context and data. And advertisers shouldn’t be afraid to pay top dollar for this opportunity to reach the consumer because although the number of screens may be proliferating the chances to reach the consumer may not be.

Additionally, the watch will be an even more personal device, and it’s likely that consumers will resist the intrusion of ad, even native ads on that so small screen. The expectations of highly relevant messages and an understanding of a consumer in context will be the new standard.

In short, I am excited about this new technology. I think there will be a myriad of innovative ways that publishers and advertisers will eventually learn to leverage it. In the meantime, I am looking forward to seeing how my personal interactions and my content consumption change with it.

Native Advertising: Two Truths and a Lie

Graham LinkedInIf you’re not familiar with the popular icebreaker game “Two Truths and a Lie” here’s how it works: each person within a group of relative strangers introduces himself and then proceeds to provide the group with three statements about himself. Two of the statements are true and one is a lie. The rest of the group then tries to guess which of the statements is the lie.

We recently asked Graham Mosley, Senior Director, Native at PubMatic to play Two Truths and a Lie. However, instead of focusing our game on statements about Graham, we decided to focus this round on his area of knowledge expertise, native advertising. We thought it would be a fun way to examine this topic.

Over the past 12-16 months, there has been a lot of attention on native advertising among publishers and advertisers. There’s even some uncertainty over exactly what constitutes a native ad and what function they serve. A December 2013 Interactive Advertising Bureau (IAB) report (link) attempted to sum up native with the statement: “it is clear that most advertisers and publishers aspire to deliver paid ads that are so cohesive with the page content, assimilated into the design, and consistent with the platform behavior that the viewer simply feels that they belong.”

Graham sees a lot momentum in the market around native but also a lot of confusion.

Here is Two Truths and a Lie for Native

Statement #1: There’s now a programmatic standard for native ads that will make it easier for both publishers and buyers to scale native.

Statement #2: Like the rest of the programmatic advertising ecosystem, native is expanding from a strong initial presence on desktop into mobile inventory.

Statement #3: Native is an ad format that’s often used for content marketing, but native is not just a new name for content marketing.

Before we reveal the lie, we wanted to point out that a key reason native has soared in popularity since that IAB report is because these types of ads are remarkably effective at driving consumer engagement.

Some data on consumer engagement:

  • Native ads are 25% more viewable than standard ads (IPG Media Lab and Sharethrough)
  • 52% of native clicks have higher purchase rate (IPG Media Lab and Sharethrough)
  • Native ads generate 82% increase in brand lift (Nielson)

 

And Now . . . The Reveal

Statement #1: There’s now a programmatic standard for native ads that will make it easier for both publishers and buyers to scale native 

True. There’s a relatively new programmatic IAB standard, which is designed to make it easier for publishers and buyers to scale native ads across the advertising ecosystem.

Graham Mosley: Until recently, native primarily lived inside walled gardens – especially social platforms – where a few players with scale could make the rules about how native worked within their closed environments. I believe we’re at the point where native is ready to go mainstream. The industry wants to see a large number of buyers and sellers transacting across an open and accessible environment. When the IAB recognized the need for a standard, it was a clear signal that native was poised for enormous growth. We were an integral part of the IAB Task Force that developed the standard, and built our solution from the ground up in accordance with this standard. Now that the rules of the road are in place, native programmatic can finally scale.

Another key reason we think that native is ready to scale in programmatic is that it will provide native buyers with actionable third party data. When native was primarily constrained to a closed environment, it didn’t provide the data to allow the buyer to make real-time decisions. That lack of real-time decision-making prevented key marketing techniques like creative optimization that is designed to better match the user experience or even the sequencing of messages. That ability is only available in programmatic, which is why we believe programmatic and native are a great fit.

Statement #2: Like the rest of the programmatic advertising ecosystem, native is expanding from a strong initial presence on desktop into mobile inventory.

False. To a significant degree, the momentum we’re now seeing behind native advertising began in mobile, and because native is fundamentally cross-platform, it is now extending to all screens.

GM: We are starting to see programmatic native, which was very much mobile focused, entering desktop as well. Part of the reason it’s been so mobile focused is because the components of native often fit perfectly into the visual snippets that work well within the mobile form factor. However, this way of displaying ad content is being adopted by premium publishers at scale. And buyers are getting serious about buying native programmatically on desktop. This year we will begin to see real spend by programmatic buyers on desktop native. So in a sense, native is doing the reverse of what we have seen in other parts of the programmatic advertising landscape, where things started in desktop and then migrated to mobile. 

Statement #3: Native is an ad format that’s often used for content marketing, but native is not just a new name for content marketing.

True. Native is an ad format often used for content marketing.

GM: Some people believe strongly that in-feed native is a tool only for content marketing.

Content marketing is when brands create and distribute content to provide value and create a relationship with the consumer. The in-feed native unit is natural ad format to drive users to this content, because it gives the marketer a better opportunity to tell a story than a standard banner ad. Additionally, these placements normally blend into the user experience on a style level and matching the context. However, many marketers are also using in-feed native units for more traditional advertising.

At its core, native is another advertising format. While it is the best ad format for content marketing, it will be used for standard advertising as well. We continue to see premium publishers develop integrated content marketing solutions for advertisers that include in-feed native ad units. Now that we have turned the corner on standards, Native will grow significantly this year and into 2016, supporting all types of marketing.

PubMatic launched its new programmatic native advertising solution at Mobile World Congress 2015 in Barcelona. For more information see here (link).

The Impact of Multi-Bid: Decreasing Deadweight Loss

Andrew Baron, Director of RTB and Revenue Operations

Andrew Baron, Director of RTB and Revenue Operations

Last year, we unveiled “multi-bid,” a forward-thinking protocol that improves performance on the buy and sell-side of the ad ecosystem by increasing the volume of bids in the marketplace. We projected the effects, but now we have the data to prove impact as well as lessons learned. The key takeaway is that multi-bid decreases marketplace frictions, which in turn creates efficiency. Said more dramatically (and while wearing a pocket protector), multi-bid decreases deadweight loss.

First a quick review. How does multi-bid work? PubMatic first sends the bid request to DSPs describing the potential impression and DSPs then respond with multiple bids, each of which has a description for potential creative. PubMatic’s system then evaluates these bids against publisher settings and other bids and selects the winner.

Buy-Side Benefits

In a multi-bid environment, advertisers and agencies first benefit from increased inventory exposure or access. We saw buyers increase their participation rate by 40-100%. With this increase in participation, we saw a subsequent increase in the buyer’s importance to the publisher’s business: a 115-130% growth in the buyer’s share of the publisher’s advertising revenue.

From the technology provider’s (read: DSP’s) perspective, multi-bid increases response effectiveness and business intelligence. The best efficiency metric that we can measure on behalf of a DSP is its throughput, as defined by media spend/QPS, which grew 10-15%. The primary driver here is an improved win rate, which grew 45-100%. It’s important to note that a growing win-rate does not just deliver short term ROI benefits, but also increases the DSP’s business predictability. While foresight is a critical piece of building business intelligence, another is learning from past experiences; through multi-bid, DSPs have increased their auction results feedback by 30-40%.

Sell-Side Benefits

With regard to multi-bid, publishers are primarily focused on increased marketplace liquidity. Bid density grew 40-100%, which drove 5-10% growth in fill rates, the end result being a 10-15% increase in publisher advertising revenue. Premium publishers accrued a disproportionate share of value. DSPs used multi-bid to go after higher valued audiences in higher valued contexts, evidenced by a 20-70% price difference between impressions attracting multiple bids and those attracting single bids. Lastly, publishers grew their lost opportunity insights by 30-40%, which is valuable in effectively managing a healthy discretionary revenue channel.

What We Have Learned

How was multi-bid effective? It helped reduce publisher imposed frictions (read: brand controls). In an environment where more bids are available, advertiser blocklists, advertiser category blocks, and even advertiser whitelists could continue delivering strategic value without sacrificing as much revenue. Premium publishers tend to use these brand controls most heavily, and DSPs are aptly concentrating their multi-bid efforts on these high-valued contexts and audiences. Multi-bid value accrues to the industry’s head.

We’ve seen both successful and less successful tactics in avoiding brand control frictions. DSPs should submit a variety of advertisers and advertiser categories in each multi-bid response—in other words, don’t submit multiple bids from the same advertiser and don’t submit multiple bids on behalf of advertisers all from the same vertical, for example.

Multi-bid has proven to be the most efficient means to securing the most valuable content and users. In the absence of multi-bid, a buyer depends on a feedback loop of past actions to achieve future successes. Since publisher brand controls are dynamic, and not always transparent, the aforementioned feedback loops repeat, iterations multiply, and direction forward may not be clear. People and infrastructure costs consequently increase. Multi-bid allows buyers to realize efficiencies ahead of these feedback loops – it’s like learning to fish while eating a salmon dinner.

In conclusion, it’s early days for multi-bidders. It’s still a buyer’s market where early adopters and power users are capturing much of the value created. As adoption and usage continue to grow, we expect to find an efficiency plateau at some point in the future, but we aren’t there yet. Win-rates continue to increase—and do so at an increasing rate—with each additional bid submitted. Said differently, the eradication of deadweight losses is accelerating!

 

To read more about the advantages of a multi-bid RTB environment, you can download our whitepaper: “The Advantages to Publishers, Advertisers and the Ecosystem of a Multi-Bid RTB Environment (Q4 2012).”