Delivering Mobile Ads Through RTB: Long Way To Go

by , Nov 8, 2012, 4:00 PM
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In recent years, two important trends in digital have occurred simultaneously: real-time bidding (RTB) has taken off and revolutionized digital advertising, and the rise of mobile has forever changed the way we interact with digital content. And yet, surprisingly, when it comes to RTB on mobile, we've haven't made a great deal of progress. Even some of the most fundamental questions remain unanswered. 
 
What does mobile even mean? Is a tablet a mobile device? How about a laptop with an LTE or 3G connection? If we assume a mobile device is a tablet or mobile phone, then there is a further problem. RTB-based ads can appear inside an app, but they can also appear on a website being viewed on  a mobile browser. Each experience is vastly different and has different limitations. 
 
Let's take a look at three distinct types of RTB on mobile — and see why one should be banished from the definition of mobile advertising.
 
1) Mobile App RTB In-app advertising are ads that get rendered inside an actual app. RTB exchanges like Google and mobclix allow buyers to bid via RTB on these ad units.  But there's a big problem with in-app RTB: there is effectively no such thing as a cookie. Without a cookie or means of identifying a user, RTB-based ads can't use historical data, which is a bit like trying to fly a kite on a day where there's no wind. Historical data is at the heart of RTB.
 
Today, most RTB-based in-app advertising limits advertisers to targeting the app — much as you might target an entire website as a proxy for the audience you're aiming to reach. The future of data-driven mobile advertising will depend on mobile operating systems and ad exchanges solving the user identity issue while still protecting privacy. Without an identifier, data-driven advertising inside apps is simply too limited.
 
2) Mobile Browser RTB (formatted content)  As you use a mobile browser and navigate to your favorite website, there's a good chance that website recognizes that you're on a mobile browser and nicely formats the content to the size of your screen. Because the ads are inside a browser, data-driven advertisers can use cookies and build up a historical profile on a user. 
 
Unfortunately,  major ad exchanges like Google, Pubmatic, and Rubicon still lack an RTB ad unit specifically for mobile formatted content.  In other words, if a user is on TheGap.com on a mobile browser and then hops over to nytimes.com. The Gap would have enough data to deliver a data-driven ad, but no way to deliver it.  This is a huge opportunity, and one that data-driven advertisers should watch closely. 
 
3) Mobile Browser RTB (non-formatted content) Many websites you browse with your mobile browser are not properly formatted to your screen size. This means the overall website looks small and the ad units even smaller. Moreover, on iOS devices, flash-based ads will not even render. I can speak from experience when I say this type of ad unit performs poorly.  It's essentially a desktop experience squished onto a very tiny screen.  The experience is so bad that it shouldn't even be considered mobile advertising.
 
In addition, there's another challenge to mobile-based, data-driven advertising: data on a specific user is isolated across multiple devices. For example, advertisers may have robust data on users when they're on their desktops, but when users pick up their mobile phones, they're effectively "new" users. There are ways to connect desktop profiles with mobile profiles using dual-login systems and inference, but we still lack perfect solutions. 
 
In short, mobile RTB has a long way to go. But fear not. The incredible rise of RTB over the last years shows what's possible when publishers and advertisers realize how new technology can help both of their businesses. Stay tuned.  
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