The mobile advertising space is very complicated and fragmented. This Mobile LUMAscape shows exactly what I mean. There are so many specialized vendors, which creates problems as well as opportunities for advertisers, publishers, and marketers in the mobile space. Even for savvy marketers, distinguishing your RTB from your DSP or your SSP from your DMP can be tricky. This is why I have created a quick high-level overview of the most important pieces of the mobile advertising ecosystem. This primer will give you the knowledge you need to understand the mobile advertising ecosystem.
What is a Mobile Advertising Network?
A mobile ad network is a company that connects multiple advertisers to mobile websites and mobile apps that want to incorporate ads. The main function of mobile ad networks is to aggregate the ad space supply from publishers to the demand of advertisers. These networks will also integrate with mobile ad exchanges in order to increase their demand for their publishers. Mobile ad networks differentiate themselves by the number and types of publishers on their networks. They are currently five types of mobile ad networks: blind networks, premium blind networks, premium networks, local ad networks, and affiliate or CPA networks. There are also currently over 300+ ad networks across the globe currently.
What is a Mobile Demand Side Platform (DSP)?
In its simplest form, a mobile DSP is a software that can purchase mobile advertising in an automated fashion. Mobile DSPs are mostly used by agencies and advertising vendors to purchase mobile ad formats such as native ads, mobile banners, and mobile search ads. Mobile DSPs have the technology to bring together the data from advertisers, publishers, ad tech vendors, and third party data providers in order to give the buyer the best inventory. DSPs have changed the way media is sold and purchased, and have taken a lot of the costs and inefficiency out of the media buying process. Mobile DSPs are connected to mobile ad exchanges to get access to publishers’ inventory. The DSP automatically decides which impressions the advertiser will buy. This process is known as “Real Time Bidding” or RTB.
What is Mobile Real Time Bidding (RTB)?
Real time bidding refers to the process in which mobile ad impressions are purchased and sold in real time auctions. These auctions happen in the time it takes for a webpage to load. Think of it like the New York Stock Exchange for mobile advertising. As an ad impression opens on a mobile website or app, information about the user and the website/app gets sent to an ad exchange, the ad exchange then auctions off the impression to the advertiser willing to pay the most for that impression. Generally, advertisers will use DSPs in order to decide which impressions to purchase, based on multiple data points.
What is Mobile Programmatic Advertising?
Mobile programmatic advertising is powered by software that automatically purchases mobile advertising inventory. This form of advertising is replacing the days of RFPs, negotiations, and I/Os. This process has made purchasing mobile inventory more efficient and cheaper for advertisers. Now you must be asking yourself; “programmatic sounds just like RTB so are they the same thing?” The answer to that is, no. RTB is a form of programmatic ad buying. RTB refers to buying media via auctions while in programmatic advertising you can still buy a guaranteed amount of impressions from a specific publisher. This is known as “programmatic direct.”
What is a Mobile Supply Side Platform (SSP)?
Mobile SSPs give publishers the power to get their inventory to multiple mobile ad exchanges, ad networks, and DSPs. Mobile SSPs also give the publisher the power to optimize they way they sell, aggregate their inventory, and optimize their yields. Now I know you might be asking, “that sounds exactly like a DSP?” That’s because though they are not exactly the same they are very similar. A mobile SSP is the publisher’s equivalent of a mobile DSP for advertisers. Mobile DSPs try to purchase mobile advertising as cheap as possible for the advertiser while a mobile SSP tries to maximize the price in which they sell mobile advertising. By doing this, they give themselves the largest range of buyers for their inventory which inturn creates the most demand.
What is a Mobile Ad Exchange?
A mobile ad exchange is a marketplace that brings together advertisers and publishers to buy and sell mobile advertising, most of it in real time. These exchanges sell mobile banner ads, full screen interstitials, and video ads. In order to buy from an ad exchange, all you need to do is get their permission to integrate with them. Ad agencies and other advertisers will buy through mobile DSPs or build their own bidders to do so. Ad Networks also have the capabilities to purchase from ad exchanges.
There are also “private mobile ad exchanges” which is when a publisher controls which advertisers can bid on their inventory. Now there are three main types of mobile private ad exchanges: segmented marketplace, tier auction private, and exclusive access auction. A segmented marketplace is when the publisher whitelabels an ad exchange and allows only privileged advertisers to bid on their premium inventory. They can also use that ad exchange to sell the rest of the inventory to the public. A tier auction is when the publisher creates a “tier” of advertisers that get first bid on certain inventory. If an advertiser in that “tier” wants the inventory they can have it, if not then the inventory goes to the public. The exclusive access auctions are when publishers and advertisers agree on predetermined terms for pricing, availability, and transparency but they leverage RTB for its efficiency and media serving capabilities.
What is a Data Management Platform (DMP)?
A data management platform is essentially a database of publisher and user data. It’s a software that takes in multiple different data points and then segments those data points in ways that advertisers, publishers, and other business can use. In the case of advertisers, DMPs are used to manage user cookie IDs to create audience segments that later they can target mobile advertising towards. An example is: Males ages 25-40 who are interested in automobiles. DMP’s have the technology to tie together the activity from mobile DSPs, ad networks, and exchanges and tie it to campaign results and audience data. When this happens, advertisers can have more insight into how to optimize their media buys and creatives. Publishers can leverage this data to find their best advertisers and users on their mobile site or app.