Maximising mobile ad revenue · 2013-04-22 · By Ian Johnson, VP, Business Development, Velti...

By Ian Johnson, VP, Business Development, Velti

February 2009

MOBILE ADVERTISING | VELTI

Maximising mobilead revenue

CHANGING FOCUSUntil recently, the concerns of mobileoperators and publishers around mobileadvertising were fairly simple: How tointroduce advertising into their serviceoffer without impacting customersatisfaction or premium service revenues(pay per download or subscription).Fortunately there are many case studiesshared at industry events that havehelped remove this as a concern. While itwill be some time before we see the paceof experimentation and innovation slow,basic offers are established in mostmarkets using the MMA standardised adunits with sufficient scale (page views)and audience (uniques) to attract top tieradvertisers to themedium. The questionsare all now about monetisation: How tomaximise the value of their inventorywithin the service experience offered totheir customers.

INTERNAL AD SALES VERSUS ADNETWORKSOne of the key issues faced by operatorsand publishers when they address thisquestion is whether to do ad salesthemselves or to work with ad networks.Ad networks act as brokers, working withmultiple publishers and operators to buildthe mobile advertising opportunities (“adinventory” ) and then represent it toadvertisers (other mobile contentcompanies, agencies and brands directly).Until recently, it was a fairly simple

dynamic. The cost of setting up adedicated ad sales team meant smallmobile specialist publishers would work

wholly with ad networks. Mobileoperators and publishers with an onlinepresence, would use their own online adsales force. Everybody else wouldtypically start with an ad network withthe aspiration of building their own adsales team over time.Even before the recession bit, we saw

this trend change. The disparity ofvolumes between online and mobilecaused ad sales teams responsible forselling both online and mobileinventory to focus their effort to theonline inventory (delivering highersales commission to them). They wouldoffer the mobile inventory at similarprice points to the online inventorydespite its higher performance. Also,the rapidly increasing amount ofmobile ad inventory (increasing supply)at a time the ad spend across all mediais decreasing due to the generaleconomic climate, has led all publishersand operators to rethink theirapproach. Many now work withmultiple ad sales channels that includetheir own ad sales and a number ofmobile ad networks.

EXISTING APPROACHES FORWORKING WITH MULTIPLE ADNETWORKSThere are three broad ways that mobilecarriers and publishers can work withmultiple ad networks. The first has themworking with a “prime” ad network thatthen signs deals with other ad networksto increase the amount of ad campaignsavailable to them. This can be

problematic for the advertiser andpublisher who lose more of theadvertising revenue to the ad networks(the ad network who did the ad sale andthe “prime” ad network both take theircuts and this is not always transparent tothe advertiser or inventory owner). It canalso be problematic for the ad networkwho delivered the ad sale since the“prime” network is likely to place theirown campaigns first.The second approach is where the

operator or publisher divides theirinventory between the ad networks bytagging different parts of their site withtags from the various ad networks. Thisis problematic for the operator orpublisher who has additional work to re-tag pages as a particular ad networkrequires more inventory to fulfill acampaign. It is also problematic for thead network as they may not have thesame pages day to day and consequentlymay have a different audience. Thismakes campaign optimisation difficultfor the ad network, delivering lowerperformance for the advertiser.The final approach is the use of

(typically home grown) solutions thattumble between the tags of multiple adnetworks (passing ad requests to each adnetwork in turn until one responds withan ad and then delivers that to the mobilebrowser). The problem with this approachis that latency can be poor (increased time

before the mobile receives the page) andall ad networks can be reduced to thelowest common denominator. E.g. if onead network is offering the inventory toadvertisers on a remnant basis at a CPMof US$1, it is hard for the premium adnetworks to make that same inventoryavailable at US$15-20.

NEW BREED OF SOLUTION TOEASE WORKING WITH MULTIPLEAD NETWORKSThese issues have led to the emergenceof a new breed of solution to enablepublishers and carriers to work withmultiple ad networks. O ften called adrouters, these solutions put the controlof managingmultiple ad networks in thehands of the operator/publisher. Adrouters work with the existing APIs fromthe leading ad networks, requiring onlyentry of the publisher credentials intothe system. The leading ad routersolutions manage not only how theinventory is created, allocated andpresented to the various ad networkschosen by the operator/publisher, butalso can provide a layer of abstraction ofcustomer data to protect end userprivacy. By allowing operators andpublishers to retain control of theirinventory and ad sales channels, adrouter solutions are poised tosignificantly increase the monetisationof mobile ad inventory.

Gone are the days where mobile operators and publishers ponderedtheir strategies for introducing mobile advertising into their servicemix. Trial systems have migrated into full commercial deploymentsand advertising is becoming an increasing part of consumer’s mobileservice experience, whether they are using their mobile phone forbrowsing, texting, playing games or watching video. W ith theincreasing amount of mobile advertising inventory (the opportunitiesfor advertisers to reach the mobile audience), the attention is nowsquarely on how well it is being monetised.

“THE QUESTIONS ARE ALL NOW ABOUTMONETISATION: HOW TO MAXIMISE THE VALUE OFTHEIR INVENTORY WITHIN THE SERVICEEXPERIENCE OFFERED TO THEIR CUSTOMERS.”