Mobile and programmatic are two of the trendiest topics in the industry today, with "programmatic" even being coined as the new buzzword by Wall Street analyst Brian Wieser. So what happens when they meet?
RTM Daily was able to ask Victor Milligan, CMO of premium mobile ad exchange Nexage, some questions about the two topics. Milligan is one of the best people to talk to about mobile, programmatic, and mobile real-time bidding (RTB). In addition to his role as CMO of Nexage, he is chair of IAB's mobile programmatic working group.
RTM Daily: Mobile and RTB are both hot at the same time. How much of that is coincidence?
Victor Milligan: Given the strong relationship between the two, it’s no coincidence that mobile and mobile RTB are heating up at the same time. The relationship can best be described by two terms: fueling and enabling.
First is the fuel. Programmatic provides a superior and unique opportunity to integrate first- and third-party, agency unique and CRM data. This complete data integration is essential to drive sustainable mobile spend.
The second is enablement. Simply put, mobile can’t grow without technology that enables efficiency at scale, real-time decisioning, and transparency and controls to ensure both buyers and sellers can fully govern how they transact.
The net effect is a strong – and strengthening – relationship between mobile and RTB that will make programmatic the strategic foundation for mobile advertising.
RTMD: Is mobile RTB's growth tied to mobile's growth in general? For example, if mobile advertising dollars plateau, does that mean mobile RTB dollars will as well?
Milligan: Mobile RTB is not simply growing with mobile, but it is also taking a share of spend from other channels and competing business models. Market forecasts tell us that programmatic will support more than 50 percent of spend in a few years in a market that is still rapidly growing. This means that mobile RTB will likely grow at a faster rate than the rapidly growing mobile ad market.
RTMD: As a member of the IAB's working group on mobile programmatic, can you describe what that's all about?
Milligan: In chairing the IAB’s Mobile Programmatic Working Group, I’m working with some great people from across the industry to achieve three very specific goals: (1) demystifying mobile programmatic so that we don’t create our own hurdles by making it more complicated than it needs to be, (2) clarifying its role and value so that publishers, buyers and data providers can best capitalize on programmatic markets, and (3) enabling a set of standard business practices and case studies to help guide market participants and expose them to the full potential of the technology and the opportunities it supports.
RTMD: What is the number one thing holding mobile RTB back? Why hasn't it exploded quite like it has online?
Milligan: If you think about the adoption of RTB in online and then look at where we are with mobile RTB today, I think it is actually exploding faster than it did online. In less than two years’ time it has become an intrinsic part of the mobile ecosystem. In 2011, Nexage…[launched] mobile RTB and now we are talking about having mobile RTB supporting more than 50 percent of spend on our exchange.
But the pace of change is startling. Organizations are still adapting to a rapidly evolving mobile and technology landscape – and adapting to that pace of change takes time – time to build people’s competencies, make strategic decisions, and build products and solutions that drive sustainable value.
RTMD: Taking all RTB inventory (all channels included, not just mobile), what percent of the pie do mobile RTB impressions have? (Is it different U.S. versus EU?)
Milligan: I think it is easier to answer in terms of relative spend. Different forecasts show mobile taking a larger share of all channels, and more specifically the online channel. For example, some forecasts show mobile taking about 40 percent of digital spend by 2016. Whether or not the forecasts are “right” is secondary; I think the bigger point is that they all show a market that is creating more value for publishers, buyers, agencies, and advertisers – and one that is growing thanks to its ability to successfully exploit technology.
RTMD: Does the IAB mobile programmatic working group have a plan on the horizon to help marketplace grow? Can you give a sneak peek?
Milligan: Beyond the foundational work we do, I think the most impactful deliverable is applicable, proven best practices and case studies that make it simple for brands and agencies to understand the nature of the opportunity provided by mobile RTB so they can aggressively and confidently take advantage of it.
RTMD: Marketers are putting __% of their total ad spend toward mobile RTB. Fill in the blank.
Milligan: I think it is probably in the low single digits, but I have not seen any numbers that tell me about the percentage spend. However, if I follow the forecasts for mobile and programmatic, I think you will see spend increase from low-single digits to double digits as a percentage of spend by the time we close 2015. The combination of a strategic channel (mobile) and a strategic technology (RTB) creates so much potential that it will attract spend – and not because it is cool or trendy, but because it delivers results.
RTMD: Thanks for your time. Any final thoughts or comments?
Milligan: Mobile RTB is at the center of a virtuous cycle. It’s not just that all market participants—publishers, buyers, agencies and data providers — benefit, it’s that the gains made in one segment create a positive feedback loop and genuine opportunities for the others in the market. It’s a very exciting time. I really appreciate your interest and great questions. Thank you.