Today’s mobile advertising environment is increasingly dominated by real-time bidding (RTB) and programmatic buying, which is why all marketers need to know the ins and outs of programmatic in-app advertising.
Defining Programmatic Advertising
Before we cover the specifics of the mobile in-app environment, let’s first take a step back and define programmatic media buying more broadly. In short, programmatic advertising is defined as the buying and selling of inventory through an automated bidding system.
Programmatic advertising uses algorithmic software to handle the placement, auction and sale of digital ad impressions – all in a fraction of a second. RTB is a subset of programmatic advertising, but it is often used interchangeably with programmatic advertising.
Programmatic advertising improved the digital media buying experience because it was more efficient for both publishers and advertisers, it was transparent and more measurable and it gave advertisers better targeting capabilities.
How Mobile Programmatic Advertising Works In Apps
So how does programmatic buying for in-app work? Let’s talk about all that happens between an ad request generating from a user’s device to that user being shown an ad in an app on their mobile device.
First, mobile apps that show ads have pre-defined slots for showing ads. They are either slots visible on the screen, like a small banner at the bottom, or they are coded to pop up in the user journey, like between levels of a game. It all depends on which ad formats, like mobile video, are supported by a particular app.
Second, when a user uses an app, the publisher calls for an ad at some point in the user session. This ad call or ad request is made to a publisher’s ad server or mediation platform that sends this request to multiple supply-side platforms (SSPs) and ad exchanges.
Next, SSPs or exchanges conduct an auction for all demand-side platforms (DSPs) to bid on available ad placements. DSPs help advertisers, ad agencies and agency trading desks place their bids on these auctions through an easy-to-use interface. DSPs are connected to data management platforms (DMPs) that help advertisers bid for specific users or kinds of users.
Then, when DSPs win an auction at the SSP or exchange level, this bid is passed on to the mediation platform along with the ad creative. There may be another auction at the mediation platform if there are bids from other SSPs.
And then finally, the highest bid from all SSPs ultimately wins the auction and gets to show the ad.
Types of Mobile Programmatic Advertising
There are many variations of programmatic buying and selling that exist in the ecosystem, but they can be clubbed into three main categories:
- In an Open Marketplace (OMP), inventory is bought in real time, with multiple buyers competing for the impression in an open, unreserved auction. The winner is decided based on whoever bids the highest. No one buyer has priority over any other.
- When buyers have specific campaign requirements that need additional targeting options or priority access to a publisher’s inventory, they can opt for a private marketplace programmatic deal (PMP). A PMP transaction is carried out through a deal ID, which helps a buyer and a publisher communicate which ad requests meet the buyer’s requirements. PMP buys are typically higher priced than the same inventory in OMP because the buyer gets preferential access to the inventory. A buyer can negotiate a PMP deal with an exchange or directly with the publisher. PMPs can be advantageous from a brand safety perspective too, as they can provide advertisers with more granular control and oversight over exactly how their ads are seen.
- Sometimes, buyers prefer to strike deals directly with the publisher. This is called a programmatic direct deal. If the buyer wants to block a minimum number of impressions with a publisher, it’s called a programmatic guaranteed deal. In these PD or PG deals, buyers can access inventory without having to compete with other buyers in an auction.
As programmatic ad spending in app rises to new heights, it’s critical that everyone from advertisers to app developers and everyone else in between understands and appreciates the foundational tenets of programmatic in-app advertising.
With InMobi Exchange, you can reach premium mobile audiences globally through the world’s leading independent in-app advertising exchange and SSP. To learn more, be sure to reach out today.