At the end of each year, the industry is flooded with trends and themes predicted to take centre stage in the coming year. At the start of 2015, mobile, video and data were touted as the key elements that would drive programmatic in the months ahead. But in an industry such as ours, where the pace of change is dramatic and market leaders make major announcements on almost a weekly basis, it’s no surprise that new trends emerged throughout the year and became top of mind for the digital advertising industry. In this blog post we explore the trends that defined the programmatic market in 2015 and the challenges and opportunities surrounding them.
1) Mobile at Critical Mass, Mobile Video Advertising Ascendant
The digital world leapt off our desktops and into our pockets. In Q3 2015, PubMatic released its inaugural Quarterly Mobile Index, which revealed that the mobile advertising gap between time spent with mobile (25% of all time spent with media in the U.S.1) and mobile advertising (18% of all ad spending in the U.S.1) has closed, from a programmatic perspective. The report also found that mobile CPMs are higher and growing faster than desktop CPMs, private marketplace (PMP) CPMs are higher than non-PMP CPMs, by a factor of 5-6x for mobile PMP and mobile optimization (i.e. the shift to mobile-friendly websites) is improving mobile web inventory quality, and effectively, the user experience.
Taking a closer look at mobile video, the opportunities are significant for both advertisers and publishers, but to reach its potential, there are still hurdles for mobile video advertising to overcome. We addressed some of these challenges in the second report of a three-part series of Mobile Point-of-View (mPOV) studies, Delivering on the Promise of Mobile Video, including advertisers’ demand for inventory outpacing publishers’ supply, lack of recognised industry standards and metrics and cross-platform complexities in buying and management.
2) Getting Ahead of Real-Time
According to a recent study released by Forrester Consulting, Real-Time Data Analytics: Empowering Publishers to Make Better, Faster Decisions, access to real-time data analytics helps publishers make timely and informed decisions that uncover new revenue opportunities. The study found that 65 percent of publishers report that they used supply-side platforms (SSP)/exchange analytics data for critical operational decisions. Further, the study found that 67 percent of publishers believe that real-time data is important to their efforts and 62 percent find that it leads to an increase in revenue, yet only 27 percent report receiving data in real-time from their SSPs and exchanges.
Recognizing that publishers need to be equipped with actionable insights from their data, PubMatic has devoted a significant amount of investment, time, effort and bespoke services to this area alone in 2015. PubMatic’s Analytics Premium, which launched in 2015, returns value to the rate card by optimising pricing and packaging in real-time, comparing performance with benchmarking insights against competitive peer publishers and discovering new advertisers and opportunities for publishers.
3) Header Bidding
It’s widely acknowledged that the inefficiencies brought on by the legacy “waterfall” bidding structure have cost publishers significantly, both monetarily and operationally. But even as new ad serving technologies have emerged throughout the year to solve these inadequacies, many publishers are still grappling with major challenges around outdated inventory allocation methodologies. PubMatic released a white paper, entitled Decision Manager: Your Inventory. Your Rules., which highlights the key issues in header bidding, such as:
• Challenges in Inventory Management and Demand Sourcing
• New Solutions to Solve for Systemic Challenges
• Overview of a Standard Waterfall Setup Using DFP
• Technical Deep-Dive into Dynamic Allocation (DA) and Enhanced Dynamic Allocation (EDA)
The potential gains from the right header bidding solution are significant. One leading news publisher was able to increase the value of their digital assets after integrating PubMatic’s Decision Manager solution. The company saw a 70% increase in average CPM and a 63% lift in revenue, all within the first four weeks of initial integration. With results of this kind, header bidding has become a prominent focus for the industry and, we are sure to see the trend continue to develop in 2016.
As we look ahead to 2016, more predictions and future-gazing will no doubt come to the fore. Some of the trends explored above will continue to lead – in particular it will be interesting to watch the impact of header-bidding on the publishing industry over the next 12 months.
But whatever the trend – one thing remains constant: the behaviours, technologies and strategies adopted by today’s publishers are guided by the ever-evolving nature of consumers, specifically their attitudes toward content and their consumption of it. We live in an ‘instant’ age where every audience is accustomed to real-time, relevant, engaging content across a number of platforms. All of the trends above are focused on the ability to deliver that and therefore deliver timely, relevant ads and maximise digital revenues. Nothing that happens in 2016 will see us move far away from that core need.