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2016: The Year Mobile Advertising Graduates

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Posted by Garrett McGrath on December 10, 2015
2016 The year mobile advertising graduates

In the world of online advertising, 2012 could probably have been called the “year of mobile.” It had been about to happen, we’d been told, for several years. Sure, mobile advertising existed before this, but in this period something palpable changed. It could no doubt have been measured in spend and in budgets allocated to mobile, yet there was also an underlying attitude change. Mobile was real. It was suddenly a true market, with the big players starting to realize that mobile was not just a matter of shrunken processes and different ad units.

Fast forwarding to the present time…mobile is obviously real. As it moves much faster than online did, it’s so real that there seems to be a low-level nervousness about knowing “What’s Next.” The industry, if it were a team, is about ready to switch from Norming to Performing. Not as many obvious innovations, not as many left or right turns, and not as many bold claims. A lot of refining, with a lot of growth. Moreover, it’s the point in time where mobile ad tech completely divorces itself from its display origins and stands independent.

There is no spoon…I mean, cookie

As mobile users spend more and more time in apps, and bounce between the mobile web and apps, it’s plainly evident that the cookie is dead. However, the hard truth is there is no good replacement.

In its place are a basket of IDs, signals, and inferences that are being cobbled together to somehow approximate privacy-safe user identification. While this is effective in some cases, particularly if you can get a user to log in, it’s less effective in many others. This bit of plumbing is ripe for innovation, provided if it can be done. Tracking users across devices and contexts within the exchange is something we are heavily focused on at Smaato.

At the same time, the concept of attribution is going to have to get a major overhaul. Sequential usage of various devices on the way to purchase complicates this already-fuzzy process. Attribution models must become much more intelligent, or the efficacy of attribution as a budget-planning metric will begin to be strongly questioned.

No longer an extension of online

Look for flexible, mobile-specific formats, such as Native and Video, to continue to dominate dollars and attention. However, we’re really at the beginning of both. Purpose-built portrait video units are, as an example, an obvious next step; yet, as the amount of customization possible within an app or an SDK really starts to take hold, these two formats will morph into something completely new. Dynamic video content; interactive units that actually work; SDKs that understand the propensity toward one type of behavior vs. another, and advertising experiences that follow suit; and storyboarding or incentivized storyboarding across multiple screens.

The line will be drawn. Mobile will move way beyond desktop “shrink and squeeze” into a market and ecosystem that will quickly dwarf its predecessor, the same way smartphones revolutionized the way we consume the Internet.

Programmatic takes over

Real-time bidding is, of course, also real. However, as RTB matures and comes fully to mobile around the world, it will also move to television, outdoor, and print. Ad networks will continue to move to bidding models or will be consumed.

As part of this process, programmatic buying models, especially in mobile, will truly come of age. With buying that is controlled through some form of programmatic deal and transacted across agencies, we’ll quickly see traders, media planners, exchanges, and publishers all becoming centralized. As such, budgets will be broken out by audience rather than by medium, and all will be driven through established programmatic pipes.

Publishers curate content, ads, and deals

As the underlying data systems that connect supply and demand (users and advertisers) continue to mature, a significant shift will happen: Publishers will no longer be in the dark about the aggregate makeup and behavior of their users. The preponderance of data available historically to the demand side will start to shift, and also become available to the supply side.

With these “insights” and real-time access to the behaviors and demographics of the users on their apps or mobile sites, publishers will be able to customize the experience of ad-driven monetization. As ads increasingly become content, both will become an intelligent stream, able to deliver more personalized experiences that are finally relevant — perhaps even delightful — to the end user.

With access to enabling platforms and systems, publishers will also be able to “push” inventory and/or audience packages to demand platforms, allowing them to be discovered and customized programmatically. Deal creation can be initiated from either side, breaking down the technology barrier that has previously made it very difficult for anything other than large publishing entities to reach relevant demand directly.

Yes, 2016 will be the year mobile graduates, boxes up its dorm room, throws off its cap and gown, and moves into the advertising mainstream. Given its scrappy past, lack of baggage, and astonishing speed, it’s probably more accurate to say it will redefine mainstream digital advertising.

By 2017, we may not even be talking about “mobile” anymore, and instead simply resolution and context.

 

Posted on December 2, 2015 on VentureBeat

Written by Garrett McGrath

Garrett is Smaato's Senior Vice President, Product.

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