In-App Programmatic: What It Is, How It Works And Why It’s Taken Off

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From hailing a ride to finding a date, it’s all about apps in 2019. With advertisers now recognising this massive market, in-app programmatic advertising has emerged as a way to help both publishers and advertisers truly scale.

“In-app programmatic advertising automates the process of buying and selling in-app inventory,” Smaato CPO Freddy Friedman tells B&T.

“Publishers set their campaign parameters, such as target audience, location, maximum prices, and so on.

“The programmatic process then automatically pairs advertisements with the ad spaces that fit their guidelines.”

It’s a market that’s growing at an “incredible pace”.

Research suggests there was a 27 per cent increase in mobile ad requests in 2018. This figure was 44 per cent for APAC.

In India, this figure was a whopping 425 per cent.

It’s growth that can ultimately be tied back to the rapid rise of mobile since 2010.

Dubbed ‘Queen of the Internet’, American venture capitalist Mary Meeker recently revealed the percentage of time spent on mobile had jumped from eight per cent of total time spent on media in 2010 to 33 per cent in 2018.

With this has come an increase in ad spend devoted to mobile — up from 0.5 per cent in 2010 to 33 per cent in 2018.

Friedman says that as well as an increase in the amount of time users are spending on their phones, the number of overall app downloads is also resulting in an increase in mobile app requests, particularly in the APAC region.

“Many popular apps are homegrown in the APAC region and tailored to the local audience, which helps drive further mobile ad request growth,” he says.

Forget the waterfall

Friedman’s company Smaato works specifically in the field of in-app header bidding, which he says can “puts all advertisers on equal footing in the programmatic auction process”.

“Header bidding has existed for years on the web, both mobile and desktop, but hasn’t come to the in-app space — until recently,” he says.

As well as evening out the auction process for advertisers, Friedman says in-app header bidding removes the outdated ‘waterfall’ method of auctions — also known as daisy-chaining — whereby a publisher passes its inventory from ad network to ad network in descending order of importance until all impressions are sold, impacting the revenue of the buyers on the lower level of the waterfall.

Header bidding, on the other hand, brings all buyers together simultaneously and allows them to bid on available inventory at the same time.

“Without header bidding, offers are left on the table and publishers miss opportunities to get the most out of their ad space,” Friedman says.

“In-app header bidding is a huge opportunity for the entire industry.

“It brings greater transparency and improved results to everyone involved in the in-app advertising space.”

Less ad fraud

Like anything, the rise of in-app programmatic has come with growing pains, particularly when it comes to transparency and safety.

But the upside is that apps are ultimately less prone to ad fraud than mobile web, to the tune of 25 per cent according to Smaato.

“One of the main reasons why mobile web is more prone to ad fraud is its similarity to desktop web,” says Friedman.

“Due to their similarities, scammers are able to exploit both mediums utilising the same tools.

“Apps, on the other hand, possess a completely different architecture, so those same methods won’t work.”

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