Mobile advertising, and programmatic mobile advertising in particular, are set for a prominent year in 2018, with all parties in the digital ecosystem continuing to recognise its benefits.
In fact, Magna recently forecast that digital will make up 50% of global ad spend by 2020, equating to $291 billion – with spend on mobile expected to increase 27% in that time. Meanwhile, according to the recent IAB UK/ PwC Ad Spend report, programmatic trading is set to thrive in 2019 with 80-90% of all UK digital display advertising.
Two trends seem to be key for the positive outlook: adoption of context-adaptive ad formats, with native mobile advertising expected to grow globally by $3.63bn in 2018, and a rise in automation, with 67% of the world’s digital display advertising expected to be traded programmatically by 2019.
Mobile consumption favours native formats
Native is in the driving seat, and its rise in popularity is giving publishers the confidence to make their mobile inventory available programmatically. So, what are the factors underpinning the transition to native advertising on mobile and the on-going shift to mobile programmatic? With mobile rapidly gaining market share over desktop, publishers want to monetise mobile impressions and advertisers want to buy them, but finding the right format is essential.
Traditional ad formats can be disruptive on the small screens of highly personal mobile devices, with standard banners causing ad fatigue and disengagement, resulting in low user retention, as well as decreased click through rates and reduced ad revenues. Native ad formats, on the other hand, eliminate obstruction to the user experience, and attract three times as much user attention as standard banner ads, holding user interest for 40% longer. Ultimately native, which mirrors the form or function of the platform and integrates seamlessly with its environment, is the most effective ad format for the mobile world.
The suitability of native ads is swelling mobile native demand, in turn pushing publishers to make mobile inventory available programmatically. But it isn’t just demand that is driving mobile programmatic, it’s the evolution of the technology itself.
Once a mechanism for selling remnant inventory, programmatic technology has transformed into a way of optimising yields on premium placements while still delivering an engaging experience at scale, encouraging publishers to increasingly turn to this method of trading for better results.
Technology enables transition to native
While publishers recognise the benefits of transitioning to native advertising for mobile inventory monetisation, they don’t necessarily want to lose programmatic revenues from standard display and video by making a step change.
Technologies such as header bidder wrappers are continuing to develop, so publishers can simultaneously reap the rewards of both native and standard display inventory. These technologies allow publishers to unify all demand sources in a synchronised auction, merging multiple header bidders with the traditional mediation waterfall and optimising a variety of monetisation options. This solution allows a broader choice of format – for instance encouraging a standard 300×250 display ad and a native ad to compete for the same placement – enabling publishers to transition their mobile programmatic strategies to native without sacrificing potential display bidders.
Buy-side adoption builds liquidity
Developments in mobile advertising have traditionally come from the sell side as a natural evolution from desktop monetisation techniques but, in the case of mobile native, larger brands are actively working with mobile experts and app developers to advance the format, putting pressure on publishers to adapt their inventory to accommodate it.
Advertisers understand the value of context-adaptive formats in delivering a positive and engaging user experience, and also realise content marketing is the way today’s consumers want to receive brand messaging, with native being the most effective means of distributing that content. The programmatic native market is building liquidity as more buyers adopt the format and Demand Side Platforms (DSPs) are beginning to differentiate themselves by their native mobile capabilities.
The rise of mobile advertising, the adoption of native ad formats, and the increased prevalence of programmatic trading are all intertwined, and the success of each one is tied to the development of the others. Native advertising is the natural fit for mobile advertising, with increased buyer demand encouraging publishers to make native mobile inventory available programmatically, and technological advances enabling them to do so with minimal risk. As these trends continue to drive one another, it’s clear mobile native formats, traded programmatically, are key to the future of digital advertising.
By Ally Stuart, Managing Director EMEA at Sharethrough