The Future of Mobile Advertising

About me• Co-founder at ZestADZ;

• Hands on tech Entrepreneur with 3+ years in mobile advertising; More than a decade of experience.

• Led ZestADZ for the past 1.5 years as the President/CEO until recent acquisition by Komli Media;

• Follow me: http://twitter.com/azifali

THE ECOSYSTEM

Stake holders are growing

2008

Publishers and advertisers

Ad Networks

Agencies

Pub Aggregators

2010

Open source pub optimization platforms

Affiliate networks

Digital and interactive agencies

Traditional agencies

Mobile Ad Platforms

2011

Online Ad Networks

Next Gen Pub side platforms

Affiliate Agencies

Resellers

Creative Solutions Providers

& More

Mobile ecosystem – courtesy Admeld

eCPM’s are falling• Pub aggregators are delivering little or no value

except that of integrating various networks but collecting 10% margins

• Various other players in the ecosystem driving down gross CPC / eCPMs

• Advertiser expectation low because mobile being a new medium; Advertisers are still experimenting

Revenue split

Ad Agencies15%

Publishers55%

Aggregators10%

Ad networks20%

Sales

Mobile ad networks• Dozens operational; more coming up thanks to

market validation with large exits.

• Technology that delivers results is the key entry barrier

• Targeting is limited; Impression level transparency is poor.

..Ad Networks• Yield optimization either at the impression level or

at the campaign level is extremely important. Unfortunately – networks do very little yield optimization now.

• Transparency of the data with other stakeholders is non-existant;

• Some networks have been moving towards a fragmented, single device model (iAd) which is not exactly great for advertisers.

• Advertiser side: Sell at costs that are next to nothing; Example Rs 5-10 per download of an Android /iPhone App; Growth is at the cost of the publisher itself.

• Pub Side: 100% revenue share, which is OK for now but not sustainable in the long run.

• In some cases, publishers will make hay while the sun shines and then will switch to another network where revenue is better;

•

Some practices are unsustainable

Will there be a shakeout?• Consolidation is happening with various

acquisitions

• Smaller Mobile Ad networks should consolidate or fade out

• Very few are above the $50m revenue / annual number

SSPs / Publisher Aggregators• Mature SSPs are at an early stage, the established ones are

more just aggregators.

• Aggregators lack basic infrastructure to enable control of traffic flowing to ad networks. The traffic flow is blind, based on assumptions and is not automated to performance

• The Gross Margins are between 7-10%

• It requires them to do a business of $100+m to deliver meaningful value to shareholders

• RTB is mainstream in online adv but yet to take off in mobile

Typical aggregator dashboard

Some aggregators go sell advertising!

Some Ad networks do Aggregator functions

Publisher + aggregator relationship• Publishers use aggregators hoping to fill 100% of inventory;

• They do, at the cost of extremely low eCPMs; especially in markets where there is excess volume available

• Low eCPMS are because the advertisers have realized that they get access to the same inventory from aggregators who pass it on to any network who can fill it.

• Lack of a bidding system / RTB provides a non-optimized solution

AggregatorPub #1

Pub #2 Pub #3

Agency / Advertiser

Ad Network #1

Ad Network #2

Ad Network #3

THE FUTURE OF MOBILE ADVERTISING - NETWORKS

Advertisers: Its all about performance

• CPC / CPL Campaigns primarily performance driven

• Driven by user subscriptions; buy CPC but must meet CPA goals

• Want brand promotion but at performance rates

•Pure CPA / CPL models

•Online networks backfilling ads to mobile without without a great experience on mobile

Affiliate Markets

and Networks

Top Brand Advertisers

and Full service

Agencies

Digital Agencies /

smaller brands

Mobile Content

Key trends• Significant separation in focus: DSPs to focus on advertiser

side; SSPs to focus on delivering value to publishers

• Business models will become more flexible;

• Ad networks will have to be significantly transparent in order to accommodate SSPs and DSPs

• While the metrics of measurement will remain the same; pricing will become dynamic due to the nature of Real Time Bidding (RTB)

The future of mobile ad networks is threatened

• DSPs and SSPs tend to eat away Ad network margins

• DSPs can bypass ad networks to Ad exchanges and SSPs as targeting Can be delivered with DSPs

• SSPs can provide value ad to deliver analytics, engagement measurement.

• Large agencies are busy setting up their own (mobile) DSPs

Why the ad network got there• Networks are blind and non transparent

• Networks share no data; have almost no API

• Most aggregators today scrape data off ad networks

• Networks are not transparent about how the pricing is decided

• Networks are trying to do a balancing act between advertisers (who want lowest cost per user) vs publisher (who want the highest eCPM)

Networks - what can be done?• Will need to evolve to make every impression highly

transparent to generate better yields

• Will need to invest significantly in yield optimization, targeting, re-targeting, behavioral targeting and personalization

• Will need to open up to share data with other networks, exchanges, SSPs and DSPs.

• Must figure out the right ways to track users in a platform that is mostly deviod of cookies;

Ad Networks – Where they should be

Transparency increases the value of the impression

Courtesy: Pubmatic

All is not lost• Agencies are still used to buying media in large

chunk from networks

• Small and Mid-sized agencies cannot setup their own DSPs easily.

• Transparency will retain all kinds of agencies

• Yield optimzation is very important; This is the ad networks core and they should try hard to improve it

THE FUTURE OF MOBILE ADVERTISING – AGGREGATORS / SSPS AND DSPS

Aggregators will evolve to be SSPs• Today’s optimizers / aggregators must evolve to be Supply

Side Platforms (SSP).

• Every large publisher will use SSPs instead of a single network (for better yields of course) in the near future.

• SSPs will need to enable Real Time Bidding (RTB) and provide value added services such as Engagement metrics, deep analytics and the like.

Demand Side Platforms• Supply Side Platforms are becoming common place in online

advertising and I expect them to become common in 2-3 years in mobile.

• WPP announced that they setup the first DSP for mobile; traditional online players are also moving in to disrupt the market

• Networks are completely un-prepared for DSPs

Role of the DSPs in Mobile• Will drive simplification on the buy side.

• DSPs will enable mobile marketers to buy media across various networks from a single console enabling a quick check of the performance across various networks.

ROLE OF RTB

Real Time Bidding

• Is a way in which advertisers bid for the most effective impression at real-time.

• Is going to play a huge role in the future of mobile advertising.

• All key stake holders must support RTB soon.

How RTB works• RTB enables advertisers to buy media by

bidding at a per-impression level

• DSPs, SSPs and Ad Exchanges / Networks will need to enable RTB, the benefits which are very obvious:

How RTB Process Works

Slide courtesy: Pubmatic whitepaper

RTB with existing ad network tech

Closure Points• The ecosystem is evolving faster than you

think; growth is fast paced and explosive

• Publishers can drive better yields with Ad networks + SSPs

• Ad Networks and Aggregators must evolve;

A LITTLE BIT ABOUT US

About ZestADZ

• Leading Global mobile advertising network ; Acquired by Komli in July 2011.

• Superb, Self service mobile ad market place with deep targeting & analytics

• 200+ staff focused at mobile advertising starting August in 12 global locations

ZestADZ USP• Open platform: Full data transparency to external

networks and exchanges through API

• Real-time analytics with deep insight into data

• Superb self service system; Various tools that drive performance mobile advertising.

• Great customer support; Massive global sales foot print as a part of Komli.

ZestADZ Analytics

World class, real time analytics system that delivers key

data that could be used in significant performance

enhancements to the campaign

Real-time Advertiser Dashboard

Quickly compare data

Expand to view details

ZestADZ Advertiser View

Tools / API

• Local advertising: ZestADZ is one of the pioneers of local mobile advertising.

• ZestADZ also has various tools that drive performance mobile advertising

• ZestADZ has the most open marketplace with full suite of API for publishers (or SSPs) and advertisers (or DSPs)

•

Client Success

Contact• Asif Ali

• asif@zestadz.com

• 98400 89876

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