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Yoni Argaman
Yoni Argaman 19 March 2019

Change is Coming to Mobile App Monetisation in 2019

We are now well into 2019 - and, considering that our industry experiences change at such rapid pace, it’s a good time to take a look at emerging trends, and offer insights into where we see the industry is going.

#1: A greater share of in-app inventory will be traded programmatically

Consumers now spend most of their time in mobile apps, and advertisers are eager to meet them there. To date, most in-app inventory has been sold to client-side demand (i.e. SDK-connected ad networks) based on historical price data. However, momentum is gaining for real-time programmatic, as evidenced by the emergence of header bidding in the channel, which brings more DSPs into the mix, as well as enables client-side networks to place bids in real-time. But I don’t want to overstate the trend. We won’t see all in-app inventory traded programmatic by this time next year, but we just may see close to 50% sold that way.

#2: Ad networks will bring new competition to mediation by acquiring their way deeper into the value chain

Fearing commoditisation, ad networkers are going on buying sprees, purchasing companies that allow them to capture a bigger chunk of the value chain. 2018 was a year of many such acquisitions: Criteo acquiring Managed.com, AppLovin buying MAX, Tapjoy buying Tapdaq, to name a few. 2019 will see new competitors in the mediation space as ad networks seek to get closer to the publishers in order to ensure they have access to premium inventory for client campaigns.

#3: Playables and demo ads will play a more important role in 2019

Competition for installs is fierce, and gaming app developers are responding with ever more creative ads. Playables and demo ads allow users to “test drive” a game before they install it on their phones, and developers are banking on a positive user experience to drive their customer acquisition campaigns. Playable ads also generate unique data that enables game developers to experiment with optimised user experience, a soft launch if you will.

#4: The beginning of standards to allow programmatic trading of advanced formats

The most sought-after ad units, like rewarded video, have traditionally been traded through SDKs and ad networks. As buyers push for programmatic access to these unique ad units -- and as exchanges catch on to the fact that these formats trade at much higher CPMs -- we’ll see various players in the industry create and announce RTB standards to trade rewarded video, playables and other advanced inventory. This trend will be further prompted by mobile app developers, who are keen to reduce the number of SDKs installed on their apps. While such efforts will begin with individual players, the IAB will jump in when they realise this is a pervasive need in the industry.

#5: Large adtech players will make their presence known in the app market

Large adtech players, such as AppNexus and Amazon (TAM), will make significant strides into the app environment, pushing their server-side approach to introduce an alternative to mediation platforms. To date, the server-side approach has been minimal, but once the large players get into the game, it will become more common.

#6: In the aftermath of GDPR, publishers all adopt and rely on consent management platform integrations

Mobile publishers are flummoxed by GDPR. They don’t fully understand what it requires them to do, or how to go about asking for consent from users. This isn’t lost on the DSPs. Rather than take risks, the DSPs have opted not to purchase any EU traffic unless it has explicit consent. In fact, EU traffic has dropped precipitously, which isn’t good for anyone involved, least of all the consumer who wants access to apps at little to no cost. But I see signs that in the year ahead, mobile app publishers will begin to understand that managing consent, via consent management platforms, is achievable after all.

#7: Blockchain is coming to mobile apps

Blockchain is the basis for all virtual currency; mobile app game developers are particularly adept at creating in-app economies. I predict that non-gaming app developers will take notice of these trends, and begin to explore ways they can leverage them in their own wares. For instance, a news app can create some kind of virtual currency within their app that allows users to unlock content, or move from a freemium to a non-freemium version of the app, by agreeing to watch an ad, or sign up for an advertiser’s email newsletter.

To be sure, these predictions reflect some challenges the mobile app advertising sector faces, but it’s also clear we’re on the very of great innovation.

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