What Programmatic Advertising Means for App Publishers – and How They Can Benefit from the Trends

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It’s no secret that programmatic advertising is big and only getting bigger. Zenith Media estimates that the market will reach US$64bn in global spend by 2018 across all platforms. But not all platforms are equal. After all, there are massive differences in how programmatic will play out across TV vs. web vs. mobile web vs. apps.

For app publishers, recognizing industry trends, analyzing what they mean for business and knowing what tactics to implement can be central to monetization and revenue generation opportunities – while simultaneously delivering the best possible user experience.

First, some background: Buyers (brands, agencies, etc.) are becoming smarter. And their need for unique user data can mean huge opportunities for apps to work with brands.

How apps can work with brands

Here’s why: Brands, of course, seek to target their messages as directly as possible to the relevant audience member. In advertising, however, this is often difficult. Traditionally, targeting efforts have been based on assumptions about an audience generally, as opposed to knowledge at the next level down – identifying who (almost literally) is the actual user. Targeting improved, of course, through the web and mobile web. But apps add a new layer of accuracy, thanks to unique data.

Unique data is the cornerstone of a programmatic advertising effort. For apps, gaining this data – while noting appropriate privacy requirements – represents a tremendous opportunity. Publishers understand their users’ behavior, and user intent data—driven by in-app purchase history, search, registration, in-store attribution for retailers and location data—is one of the most important and unique data sets that publishers possess. As with nearly any digital effort, data is central to creating new opportunity.

Indeed, because of this data, a publisher’s in-app audience has a higher lifetime value than purely web-based audiences. And the result?

Greater opportunity for both sides – the buyer (the brand) and the seller (the app).

Before programmatic, brands would pay more for users in the more premium real estate in hope the users would be high-value. But now they also may find the exact same user in a less competitive – and therefore less expensive – app. For apps, that’s where having unique data sets – or, as well, a good understanding of users, audiences, and data – helps attract buyers who want to acquire users and customers in a better and more scalable way.

It’s important for app publishers to understand, however, that not all data comes from within their own app. A major opportunity for app publishers comes in sharing their data across platforms.

The power of collaboration

Why would apps share data?

Consider what most apps are up against: From the product point of view, companies like Facebook or Google or Amazon or Apple all have their own robust data sets from a staggering numbers of users, verticals, industries, and more. Much of it is personal user data, which presents the entire app ecosystem with a major challenge when it comes to advertising.

By collaborating on data anonymously, apps gain better understanding of their users. Through that understanding, they can customize the experience within the app in a more granular way – from the onboarding process to the type of content that a user is being served.

App publishers also can grow their programmatic capabilities. With more data, apps can offer greater specificity o brands (and media buyers). This, in turn, will improve the type of monetization and advertising that will be part of the app experience.

In addition, a brand’s ability to buy on a user level will also increase the amount of available inventory. And while most of the in-app data today sits behind walled gardens that block brands’ ability to really know their audiences, data sharing will begin to play a larger part in real time decisions to deliver in-app messaging that yields better results per user.

How to measure success

Finally, there’s another way that apps can use their unique environments to gain advantage in the programmatic advertising market: Measurement.

In-app experiences allow marketers to track better. This means not only tracking users, but also deeper tracking of the ad itself. This has been something of an issue for programmatic buyers in the mobile and desktop web worlds: If an ad was shown to a user, was the user real? What was the ad’s “viewability” (i.e. at the bottom of the page, where no one visited? Off the side of the page?)? Also, what was the engagement of that user with that ad? In-app experiences can give marketers more confidence in their buying specs.

In summary, to better position themselves to leverage the benefits of programmatic in 2017, key tips for app publishers include:

  • Collect and manage data appropriately
  • Seek additional data sets to connect with your proprietary data
  • Measure results – this means not just clicks or other actions; it also means viewability of the ads. This is an area where apps can vigorously compete with mobile and desktop web, giving brands better ways to measure results on a user-level

Few dispute the fact that programmatic advertising is big and getting bigger. The challenge for app publishers is how to create and provide the best programmatic platform possible.

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