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It is a M’AD World! A Look inside how mobile advertising really works

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Presentation on theme: "It is a M’AD World! A Look inside how mobile advertising really works"— Presentation transcript:

1 It is a M’AD World! A Look inside how mobile advertising really works

2 Overview A Bird’s-eye view on the mobile ad landscape Mobile Ads evolution Device identifiers and Conversion Tracking Preview on Ad optimizations (Big Data) Best practices for Advertisers and Publishers Advanced Targeting Demo Miscellaneous Q&A

3 Bird’s eye view Mobile ads by revenue ~ $9 billion global: pass-9b-globally-in-2013-after-83-surge-in-2012-thanks-to- smartphone-boom/ pass-9b-globally-in-2013-after-83-surge-in-2012-thanks-to- smartphone-boom/ KPCB Internet trends - 2013 2013 Number of apps in iOS app store - ~ 900000 with 15Billion downloads Number of apps in Google playstore - ~850000 with 40Billion downloads

4 Bird’s eye view – cont’d (source: KPCB Internet Trends)

5 Bird’s eye view – cont’d

6 Mobile Ad Evolution Publisher Server Pre Smart Phone http Ad N/W request impression click 302 redirect Landing Page Conversion

7 Mobile Ad Evolution – cont’d Lack of advanced html support like iframes, javascipt, css and cookies. Mostly mobile web pages Publisher side integrates Ad N/W code (in a particular language – php, ruby, java etc..) which proxies http request from device to the Ad N/W servers – HTTP headers from device very important. Ad N/W responds with a html snippet which is embedded on the publisher servers before going to the device. Winning Ad based on closed second-price auction. Mostly Text ads, but banner and video supported in some makes and models. Revenue share between Ad N/W and Publisher – e.g. 60 – 40 split. Advertiser usually charged on CPM (brand display) or CPC.

8 Mobile Ad Evolution Publisher Server (optional for apps) Smart Phone http Ad N/W request impression click 302 redirect Landing Page / App Store Conversion http

9 Mobile Ad Evolution Smart phones usually support advanced html features – iframes, javascript, css and so on. On mobile web pages, tag based systems ensure request sent directly from the device to the Ad N/W servers Arrival of native apps supporting ‘web containers’ in sandboxed environments along with App Stores. Native apps usually embed Ad N/W SDK App Stores emphasize ‘conversions’ rather than ‘click’ optimizations for performance based advertising. With 3 rd party conversion tracking, there can be more than one HTTP 302 redirect hops before reaching the landing page / app store. Lack of X-domain cookies still a major hurdle compared to desktop online ads – ‘common cookie jar’ in the latter a crucial driver for various innovations in the online ad industry. Richer Ad units possible along with the usual Text and Banners. Along with CPM and CPC, now CPI a major component in revenue models for performance based advertisers.

10 Mobile Ad Evolution - metrics digression Basic metrics that are tracked: – Requests – Impressions – Clicks – Conversions Derived metrics: – Fill rate % = (impressions/requests) * 100 – Click-through-rate (CTR %) = (clicks/impressions)*100 – Conversion rate (CVR %) = (conversions/clicks)*100

11 Mobile Ad Evolution – metrics digression Spend metrics for Advertisers: – Cost-per-Milli (CPM) = $ / 1000 impressions – Cost-per-click (CPC) = $ / click – Cost-per-install (CPI) = $ / install – Cost-per-acquisition (CPA) = $ / acquisition (CPI is a particular case of CPA ). Advertisers charged based on the aforesaid spend models by Ad N/Ws and resultant revenue shared with the Publishers – e.g. 60% for publishers, 40% for the n/ws. Can be fixed CPM or CPC deals too.

12 Mobile Ad Evolution Traditional Ad N/W model limitations: – Proprietary integration for each n/w if publisher need to work with different ones. – Mediation layers somewhat mitigate this problem – Overall less transparency One solution: Mobile Open Real-time-bidding (OpenRTB)

13 Mobile Ad Evolution – OpenRTB App with SSP SDK Ad N/W 1 DSP 1 DSP 2 Ad N/W 2 DSP N SSP Exchange OpenRTB Protocol request Bid requests Bid Responses Win Notification impression click 302 redirect Landing Page / App Store conversion

14 Mobile Ad Evolution – OpenRTB Mobile OpenRTB spec: (version 2.1) JSON based protocol Increased transparency Publisher inventory available in a competitive open market Pricing/Operational efficiency

15 Mobile Ad Evolution – OpenRTB Leading to specializations: – Supply-Side-platforms (SSP) - Publishers/App Developer side focus – Demand-Side-platforms (DSP) – Advertiser focus An ad request translates to several bid requests to all demand participants, and the highest bidder (CPM) picked as the winner. The bidders are expected to respond within 120ms. SSP exchanges select a winner by closed auction (usually second price), and the winner notified with the CPM price in real-time DSPs’ buy impressions on a CPM basis, but most likely getting paid only on CPM, CPC or CPI basis – effectively a trading platform! Publishers / App Developers can set a price floor for various ad units dynamically. For more details refer to: Sample RTB requests and responses -,67,88-,67,88-

16 Device Identifiers Crucial for conversion tracking (see best practices)! Only available in native app traffic. iOS 4 and older – usually SHA1 of UDID (now deprecated). iOS6 and above – Identifier-For-Advertisers (IDFA): – Usually passed in raw. – Users can turn off tracking, or change the identifier (transient). During transition between UDID deprecation and IDFA, various solutions were in place: – SHA1 of MAC Address (all uppercase colon separated) – ODIN1: SHA1 of MAC Address in byte form – OpenUDID (uses iOS Pasteboard) iOS7 onwards: IDFA the only approved device identifier: – Pasteboard changes deprecate OpenUDID – MAC Address api always returns 02:00:00:00:00:00 Android ID (permanent identifier) still acceptable in Android platforms along with IMEI.

17 Device Identifiers – cont’d Real-time conversion tracking essential for CPI based campaigns. Conversion events can be latent Standard click to conversion window is 14 days but can be configurable in some DSPs’ Various third-party conversion tracking solutions now available which solves the multiple attribution problem – usually ‘last click’ wins. Increasingly advanced advertisers demand post-conversion optimization – analyzing life-time-value (LTV) of users. Conversion tracking still possible without device identifiers via ‘device finger-printing’ approaches at the expense of accuracy.

18 Ad Optimizations – Big Data In a nutshell, serve the most optimal ad that maximizes advertiser ROI and other goals, and maximize revenue to the Ad N/W / DSP and publishers. Optimal Ad selection based on various features/dimensions: – Attributes of the source of the request (native app or mobile web page): Keywords categories – Ad position – Ad dimension – Geo Location (Country, State, City) – DMA zone – Past performance of Ads under various dimensions: CTR, CVR – User attributes (behavioral targeting): Demographic (Age, Gender, Profession, Income Range) Audience segments applicable to the user (technology professional, high-income) – Much more! With OpenRTB, effective bidding strategies! Details not in the scope of this discussion but happy to answer them in the Q&A portion.

19 Best Practices - Advertisers For CPI based campaigns, collect device identifiers for real-time conversion tracking either via 3 rd party conversion tracking solutions, or in-house approaches. This needs to be integrated to Ad N/Ws and/or DSPs’ Have all the various standard IAB creatives for banner ads ready. Well designed creatives that grabs user attention. Periodically refresh the creatives (for at least top performing units every month) Choosing the right campaign strategy: – ‘Run of Data’ – Audience Targeting – Re-targeting (Desktop to mobile or vice-versa) – Post-conversion optimization Support ‘App urls’ for launching and deep-linking (if applicable) – can enable ‘re-engagement’ and other post-conversion optimizations: application-via-a-custom-url-scheme.html application-via-a-custom-url-scheme.html

20 Best Practices - Advertisers CTR By Ad unit size CVR by Ad unit size Conversions/1000 impressions

21 Best Practices - Advertisers

22 Best Practices - Publishers Ensure advertising fits into the larger monetization strategy – Free version of app with Ads leading to fuller paid versions – In-App purchases – Freemium model Design up-front on where to place the ads - native app or mobile web page Use device ids (for native app publishers) to maximize revenue from performance- based advertisers. Provide as much hints about the user as possible – see sample ‘user’ fields in OpenRTB spec. Maximize on larger ad unit sizes – e.g. interstitials, using natural pauses/breaks in the app to present ads (e.g. - leveling up in a game), not too distracting to the users and so on.

23 Advanced Targeting Demo

24 Misc. Lot of improvement and innovation possible in richer ad units highlighting mobile strengths: – Geo Location – Click to Calls – More interactivity (esp. in tablets) – In-App purchases (Ads leading to purchases without exiting the apps) ‘Re-engagement’ campaigns Dynamic Ad creatives Native Ads - increasingly a popular ad unit’that fits well into the app or web page content – e.g. Facebook mobile feeds.

25 Misc. Future trends seem to indicate moving towards ‘cross screen advertising’. Re-targeting from desktop to mobile or vice-versa – e.g. user doing some preliminary research in a mobile device, but completing the transaction on the desktop. Devices will include next-generation DVRs’ – convergence of desktop/laptops, tablets, smart phones and TV. Ability to link users across their various respective devices. Taking to the next level, ability to link online campaigns leading to a offline purchase.

26 Q&A

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