Like many around this time of year, I was asked to write a piece on what could we expect in 2016 from mobile advertising. Before starting, I had already read many predictive pieces from some really smart people in the mobile, advertising and ad tech spaces and there was ample coverage on what can be expected for 2016. So, instead of elaborating more of the same, I decided to focus on what not to expect.
Tech unicorns and anything ad tech-related have been attracting more negative than positive attention throughout most of 2015. So the obvious question becomes: what do we forecast for 2016 that will have a positive impact on mobile advertising and how will these influence the industry and the overall business strategy for ad tech companies?
At this juncture, it is worth highlighting the attention that one of the social media giants has been garnering in the ad tech space in the last 12 months, with it now becoming a reference point for success in mobile monetization. The same cannot be said of the real ad-tech industry, which differs significantly from the former, and where a number of real issues loom large. Among these, are issues relating to data and ownership, market quality and demand loaded platforms.
Chief Business Officer,
If players in the ad-tech space were to take a bigger view of their business, these are the three areas that they should focus on to drive their platform and business models to what they should ultimately be.
#1: DATA AND OWNERSHIP
“Data is the exchange currency” is a statement used by many in the space, however if you ask for more clarity here, there will be different answers. What we will not continue hearing in 2016 is that a Data Management Platform (DMP) or retargeting will solve all advertising-related data problems. The most important aspect of data is that those who do not own it are using it, and this will get a lot of attention in the next 12 months. This is related to how data is used to find and retarget users - something that is very difficult to justify for anyone who does not own that data.
The publishers/content creators will search for answers in the form of platforms and tools can they use to take better ownership of their data. The key reason for shifting data ownership back to the publisher is because they care about not only their audience and monetization of that audience, but also the experience that audience has when they visit their app or website.
In 2016 we will see maturity from platforms such as the ad servers themselves that publishers use to empower them, with controls on prices and audience packages. Most importantly, publishers will be better able to marry advertising experiences with content, based on data and controls. We will also see new data modeling techniques evolve that will define better matchmaking between advertiser dollars and audiences, vs. outdated retargeting campaigns.
#2: MARKET QUALITY
The rise of programmatic has already happened. Phase 1 was Adoption, Phase 2 was Scale, and Phase 3 will be Clean Up. First came the chariots, then highways with lanes, then the need for traffic control, referencing the history of traffic light.
What we have seen in the last 3+ years is programmatic trading having gained a lot of success in mobile monetization. There was a natural fit based on where users were spending their time, combined with the fact that the industry lacked expertise in selling mobile inventory in traditional methods. Combined with the scale programmatic trading naturally creates, Real-time bidding (RTB) took off much faster in mobile than it did in desktop.
This acceleration also attracted fraud on both the advertiser and traffic fronts; if this were something technology could alone solve, we would have seen a clear winner. Market quality issues have existed in the display space for a long time and these issues were addressed only when people, technology and processes came together. What did not happen in 2015 was a fix for market quality problems. Ad blockers or any other technology that claimed to solve these issues were only distracting work in areas such as product roadmaps and integrations, and this hopefully, will not continue into 2016.
What we will see in 2016 is hence, maturity and adoption. Both are driven by the need to take better ownership of data and leveraging of that data to create better experience around content in the form of native advertising. I would not call native innovation, because dynamic creatives have existed for long time; however the need for buying audiences based on data is at a stage of maturity as programmatic gains adoption.
The timing is perfect for real market quality solutions, as this will only get solved when advertisers will not buy anything without data, and publishers will leverage tools that give them better control of their data, advertising and formats.
#3: DEMAND LOADED PLATFORMS
If you look at the entire ad tech Lumascape, not much has changed in the last five years. We are still seeing the consolidation of demand-side platform (DSPs), supply-side platform (SSPs), RTB Exchanges, Networks, DMPs, and other component players. In 2016 acquisition or consolidation will not be the measurement of industry success.
All this cross-pollination creates a lot of challenges for both buyers and sellers of media. Imagine being an advertiser who has to buy on 20+ exchanges and a media buyer who needs to run 30+ PMP Deal ID’s across multiple exchanges. This creates complicated stacks that publishers and advertisers need to manage, while worrying about data and fraud.
In 2016 the industry will recognize the need for a true platform that comes loaded with demand and allows a publisher to manage content, formats, data and price across all partners. We will also see the need for advertisers to access a platform with audience discovery, based on data across multiple exchanges, as opposed to individually connecting to them all.
I am very excited about 2016 and what it will bring for our industry, valuations and growth prospects. Ad Tech is a great space and it has brought a lot of visibility to advertisers that did not previously exist, and we should be proud of what we have all achieved. I am excited how data will bring more maturity to capturing larger advertising budgets. Data will help programmatic gain more adoption outside the US. Data also offers transparency to advertisers and that will help us address market quality as a topic because the image of mobile, ad tech and adoption is the responsibility of everyone who works in this industry. We should proactively both solve and defend it.