Yesterday marked the last day of the Siemer Summit, an invitation-only event for leaders in digital media and technology. While the majority of attendees are either founders/CEOs or top-level executives from technology and software companies, around 25% of the summit were investors in the space, so it had a different feel from a traditional trade event. There was a significant amount of energy dedicated to emerging consumer trends, such as virtual reality, and more attention paid to larger shifts in revenue streams and business models, like programmatic buying and mobile content delivery.
Our director of platform sales and product marketing, Wouter Vermeulen, participated in one such panel, on native advertising and video going programmatic. He was joined by participants from companies like Engage, Manatt, YP and 20th Century Fox to address questions around user experience, cross-screen reporting and standards of viewability.
At lunch, our CEO Mahi de Silva was up on stage among peers from Purch, Axciom, OpenX, and inMobi to talk about some of the issues in digital advertising today. Moderated by Tim Peterson from Ad Age, they covered everything from ad blocking in iOS9 to the prospect of programmatic buying for television. Here are some of the highlights:
Auctions are not a race to the bottom.
As Tim Cadogan from OpenX pointed out, the most valuable things on earth are sold via auctions. It’s about designing a market in the right way; you have to have the right participants. And just as it’s possible to take out the “bad” players the way that credit card companies identify fraud, private marketplaces can do the same. It might mean turning down short-term revenue, and it’s an investment, but in the long run it’s the way we need to go. Mahi added to that vision by saying that premium publishers aren’t just delivering high quality content, they are delivering the very best ad experiences, such as video that doesn’t buffer. And they, and their advertising partners, are accountable to users and are following a code of conduct that keeps them in the category of “premium,” even if they move into the auction model with varying degrees of control.
The more you know about a mobile consumer, the better you can serve them.
Mahi noted that beyond targeting for ad messaging, it’s our responsibility to serve mobile consumers in other, nuanced ways. For instance, if a user is on a 3G network, you should not serve them a video ad, but a smaller-sized banner ad instead. Or, better yet, optimize the experience by downloading that ad to cache it for a later delivery so that their experience is smooth, not choppy. From our experience mediating over 200 DSPs, we know that latency is a huge issue. Networks are by nature unpredictable, so we are constantly measuring the efficiency of systems to know what speed we can offer to different consumers, at different times. The difference between a tenth of a second and 200-300 milliseconds is more important than you might think.
Our daily journey on mobile does not begin in the search bar.
More and more of our interactions are taking place in-app, which for advertisers is great news, because the in-app ad experience is closer to TV, not wrapped around the content like you see on mobile web and desktop. And what that means is that there is more opportunity for media companies to attract the largest advertisers in the world. Mobile is inherently a more democratic marketplace, with space for smaller players to grow. One trend that all of the panelists observed, however, is that as media and technology companies scale, they often try to build (or buy) their own advertising divisions – but doing that is really hard to do, because it’s like running two companies at the same time.
Video and native is what buyers are leaning toward – sharply.
Tim Peterson asked the panel what they thought was the next big thing for digital advertising, and almost all agreed that native advertising was a clear trend, and that demand for video is only going to increase in 2016. There is something about the power of sight, sound and motion that advertisers recognize, and mobile offers a full-screen experience in the palm of your hand.
However, as Mahi pointed out, the most exciting thing is that at the end of that video, you can have an end-card or call to action that is highly measurable, so unlike TV, you know how many people watched the ad, and you can drive them into an attributable next step. It’s no longer about CPM, it’s about how many interactions you facilitated and how that impacted the bottom line of the business, whether it be through an in-app purchase, app download, an m-commerce transaction, foot traffic to a restaurant or the creation of an appointment for a service provider.
So ultimately, it’s not about innovation on ad units or types, it’s about the result. And that’s what businesses care about. Judging from the number of nodding heads in the audience, it was clear that everyone, from investors to content creators, care about it, too.
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