Programmatic ad delivery in the U.S. is poised to become a $20 billion market next year, with mobile ranking as the number one opportunity. Driving this massive growth in the mobile ad market is the proliferation of consumer data and advertisers’ ability to glean actionable insights. In fact, the data we have at our disposal today powers not only more knowledgeable and efficient media buys but also near-complete personas for targeting.
We’ve evolved from manual integrations to machine-learning algorithms and far more efficient mobile media buys. Advertisers are realizing the possibilities in cross-channel and multi-screen, but also how to use their own first-party data to improve performance and increase campaign ROI.
How can you get in position to take advantage of this rapidly evolving environment? Advertisers must master three pillars of mobile performance advertising: technology, data and services.
Ad tech today looks like a technological arms race; almost every company attempting to grow, scale up, and remain in the game is investing in technology. The promise of digital media is twofold: it makes advertising both scalable and measurable. Technology has certainly delivered on our ability to scale, and coupled with programmatic, it enables decision-making and a great deal of measurement in real-time. Ad tech is now capable of learning the right campaign, the right message, and the right price per impression – and if it should be bid on.
This trend toward programmatic ad buying and delivery will continue; eventually the entire media landscape will be controlled by programmatic. The days of Don Draper are long gone.
The second pillar is data — massive amounts of data — who owns it, and how various parties access it. Data is critical in performance advertising and drives decision-making by man and machine alike. However, advertisers must take care to avoid inflation of data. We can come up with very specific algorithms, which use historical data to measure intent, but the sheer volume of data sources consulted by the algorithm can result in ads reaching only a small subset of people.
Advertisers require scale. Lookalike audiences are one important tool helping advertisers reach more of their audience and enabling advertisers to share their most successful markets with their marketing platform or provider. Based on that data, those attributions can be connected to singular users the programmatic trading system meets, effectively expanding the advertiser’s reach in a targeted, measurable way. The scale is enormous; programmatic is capable of listening to all mobile impressions, about 40 billion a day.
With this mass amount of data and ability to sort through it at scale comes user privacy concerns that will grow in years to come. The importance of the sharing of first-party data is critical, yet advertisers are hesitant to do so and have very real fears of data leaks.
In lieu of that first-party data, third-party data is incredibly valuable. Google, for example, just released a DMP to resell anonymized, packaged, and segmented data. The depth and scope of information they can access from the unified logins of their users is enormous.
As the ad tech companies become more tech providers than media providers, the trust level among advertisers will increase. What we’re seeing now is the fusion of ad tech and martech, a trend that will continue.
Finally, service needs to come to the table with education and knowledge in order to keep up with constantly changing technology. We can’t expect the beneficiaries to understand the intricacies of the technology; we’re assuming that because a person could conceivably fly a jumbo jet on autopilot, they’ll be fine guiding a manual F-16 with precision.
While the market is becoming more efficient, there are still several silos of inventory to buy from in mobile, video, and social. Channels for potential engagement and reengagement are limitless. One thing holds true, though: regardless of the vertical, advertisers tend to focus on their product, rather than on understanding the world of ad tech and marketing.
The expertise of the companies in media trading (whether buying or selling) is extremely important. In the long run –- 10 years from now –- advertising will be as efficient as the financial trading world, with an algorithmically based world of trading.
This all sounds grim for the professionals of the entire advertising ecosystem, doesn’t it? But the industry won’t be completely algorithmic, restricted to machines influencing other machines. We’ll always need the experienced, knowledgeable human who can fly that F-16 with precision.
The promise of digital in advertising is still scalability and measurability. If you’re able to stay ahead of the technological and data-driven trends to provide exceptional performance using the tools at hand, your value will remain high for years to come.
Tim Koschella is a dedicated expert in international mobile performance marketing (CPI, CPL, CPA, CPE). He is Partner & Co-Founder of HitFox Group and CEO of one of the Group’s portfolio companies, AppLift.