Instruction: we increase the profitability of mobile advertising three times
Recently, the sale of advertising through RTB (Real-time bidding) is rapidly gaining momentum in mobile applications and games.
Now we can observe a very interesting situation on the market - monsters of mobile advertising are gradually fading into shadow, and they are replaced by young, more advanced companies with a fresh look at monetization. Yesterday, Admob or Chartboost was the gold standard in application monetization.
Today, traditional pay-per-action advertising networks (installation or click) can no longer fully compete with RTB exchanges and pay-per-impression.
RTB is a standard that describes the software algorithm for selling each ad impression in your application through an auction on one of the exchanges. The largest RTB exchanges that deal with mobile traffic - MoPub , Smaato , OpenX , TapSense and some others.
RTB exchanges are in essence very similar to financial exchanges, such as Nasdaq or MICEX. On the one hand, they serve users who want to sell impressions in their applications (or securities), and on the other hand, advertisers who want to buy these shows (or securities). The task of the exchange is to connect the seller and the buyers with each other and organize an auction in which the one who offers a higher price per impression wins.
')
The price per impression is determined programmatically based on many different factors. Bidder (a program that makes bets) analyzes information about the display - the geographical location of the user, the model of his device, the OS version, the list of applications installed by the user, the history of search queries and, if possible, the gender and age of the user.
Sample bidding
Application: hey, exchange, there is free space, I can show ads.
Exchange: hey, advertisers, there is free space, who wants to show ads?
Advertiser 1: I give $ 2, because this is a man of 25 years in the center of Moscow with an iPhone, he may be interested in a taxi ride.
Advertiser 2: I give $ 1, because I have a global media company and I am ready to buy any traffic at that price.
Advertiser 3: I give $ 10, because a user was looking for a new Toyota two days ago, and I have a car sale right now.
Exchange: hey, app, show the 3rd advertiser ad, he won.
It would seem ideal for everyone. The situation when everyone wins. But there are several pitfalls here.
The fact is that the whole RTB is arranged in favor of the advertiser. At first glance, this is not very obvious, but let's look at it in more detail.
Second price auction
What do you think, how much will the advertiser pay who put in $ 10 and won the auction? Think $ 10? No matter how wrong! The whole market is designed so that the advertiser has always had better conditions than the seller. In fact, the advertiser will pay $ 2.01. Why it happens? Because the rule of the second price auction comes into effect - the advertiser who wins a higher bid wins, but he pays not the amount that he stated, but the amount that was indicated by the next advertiser plus 1 cent.
It turns out a funny situation. The advertiser has set a budget for himself - he is willing to pay $ 10 per impression. And pays $ 2.
Not fair? And how.
How to achieve a fair price and get the advertiser to pay as much as he actually planned?
It is very simple - to plant a decoy duck, which will call the price as close as possible to the winner. Thus, according to the rules of the auction, the winner will be forced to buy the show at almost the price that he announced. Similarly, Appodeal is struggling very effectively with the auction of the second price for Admob and RTB exchanges.
User Information
The RTB standard suggests that advertisers must interact with special companies called the DMP (Data Management Platform) to get more information about users. From DMP platforms known to me - Bluekai , Flurry , Personagraph , Datamonk . That is, after the exchange has announced an auction, the following dialogue takes place:
Exchange: hey, advertisers, there is free space, who wants to show ads?
Advertisers (all in chorus): hey, DMP, what kind of user?
DMP: like a man, it seems 25-40 years old, not exactly sure, but, like, interested in Toyota.
That is, in fact, the reliability of the data that comes from the DMP is still extremely low. DMP makes some assumptions, but they often turn out to be wrong. As a result, many advertisers refuse to use DMP at all, relying only on information that is directly accessible from the application, such as the device model and geographical location.
In order to allow advertisers to bid higher, the application must independently collect first-hand information about its users. Such data can be directly transferred to advertisers, thus increasing the cost of their traffic.
There are two main ways to collect reliable information about users :
1. Social networks. The easiest and most convenient way to collect information. Add a login via Facebook or Vk to your application, request permission to receive personal information of the user and voila - the most accurate information about the user is in your hands. Pass this data to advertisers and watch them gradually increase the rates on your traffic. The most difficult thing here is to figure out what authorization is needed through Facebook / Vk in the application.
2. Surveys . Offer your users some kind of bonus for completing the questionnaire. For example, promise them that they will receive a beta version of your new game. Or give out game currency. There are many ways to motivate a user to complete a questionnaire.
Want to sell traffic in RTB? Take care to collect user data.
CPI vs CPM
It's funny. Traditional networks operate on the CPI model. That is, no matter how many times an ad has been shown. The transaction will take place only when the application is installed. Fair? For the advertiser - yes. But not for the seller.
The fact is that when the advertiser pays for the installation, he is completely devoid of the motivation to work on the conversion of their banners and landing pages. What for? Payment is the same for installation. So we observe situations when 10,000 hits were turned off, for which not a single cent was received. At the same time, the seller has no ability to influence the conversion of advertising. At best, he can block the advertiser, whose advertising is poorly converted and that's it.
The CPM model is completely different. It removes the risks from the seller, shifting them to the advertiser. Want to buy ads in my application? Take care that your landing page is well displayed on the phone with users, and the banner is interactive and high resolution. CPM makes advertisers think. At the same time, the advertiser, unlike the seller, has the opportunity to influence the conversion of their product.
Can you imagine radio or TV advertising being paid pay-per-action? This is nonsense!
The mobile advertising market will completely abandon CPI / CPC and go to CPM over the next few years.
Bonus pro pacing
Most advertisers have a setting for how much money they want to spend in one day.
So, even the largest advertiser is not trying to bet on all possible impressions. Instead, he buys the show, and then sits back for a while until it is time to spend some more money according to his settings. These settings on the advertiser's side are called pacing.
Why does the seller need to know? Because mobile advertising is not exactly the same as the web, and this should be taken into account in order to effectively sell traffic.
By accessing the site, the user expects to see the advertisement instantly, therefore, the exchange should give up the advertisement instantly, choosing from what it has.
Mobile RTB is another matter. The user has launched the application. But he does not need to show ads right away. You can calmly organize auctions in the background one by one, until you find the advertiser whose bid of the seller really suits. As a rule, the seller has about a minute before you need to directly show ads. For 1 minute, you can easily organize a dozen auctions, which significantly increases the chances of getting a good offer from advertisers.
How effective is it at all?
Very effective. The income from applications at the correct setup increases up to 3 times.
Now we can observe a very interesting situation on the market - monsters of mobile advertising are gradually fading into shadow, and they are replaced by young, more advanced companies with a fresh look at monetization. Yesterday, Admob or Chartboost was the gold standard in application monetization.
Today, traditional pay-per-action advertising networks (installation or click) can no longer fully compete with RTB exchanges and pay-per-impression.
RTB is a standard that describes the software algorithm for selling each ad impression in your application through an auction on one of the exchanges. The largest RTB exchanges that deal with mobile traffic - MoPub , Smaato , OpenX , TapSense and some others.
RTB exchanges are in essence very similar to financial exchanges, such as Nasdaq or MICEX. On the one hand, they serve users who want to sell impressions in their applications (or securities), and on the other hand, advertisers who want to buy these shows (or securities). The task of the exchange is to connect the seller and the buyers with each other and organize an auction in which the one who offers a higher price per impression wins.
')
The price per impression is determined programmatically based on many different factors. Bidder (a program that makes bets) analyzes information about the display - the geographical location of the user, the model of his device, the OS version, the list of applications installed by the user, the history of search queries and, if possible, the gender and age of the user.
Sample bidding
Application: hey, exchange, there is free space, I can show ads.
Exchange: hey, advertisers, there is free space, who wants to show ads?
Advertiser 1: I give $ 2, because this is a man of 25 years in the center of Moscow with an iPhone, he may be interested in a taxi ride.
Advertiser 2: I give $ 1, because I have a global media company and I am ready to buy any traffic at that price.
Advertiser 3: I give $ 10, because a user was looking for a new Toyota two days ago, and I have a car sale right now.
Exchange: hey, app, show the 3rd advertiser ad, he won.
It would seem ideal for everyone. The situation when everyone wins. But there are several pitfalls here.
The fact is that the whole RTB is arranged in favor of the advertiser. At first glance, this is not very obvious, but let's look at it in more detail.
Second price auction
What do you think, how much will the advertiser pay who put in $ 10 and won the auction? Think $ 10? No matter how wrong! The whole market is designed so that the advertiser has always had better conditions than the seller. In fact, the advertiser will pay $ 2.01. Why it happens? Because the rule of the second price auction comes into effect - the advertiser who wins a higher bid wins, but he pays not the amount that he stated, but the amount that was indicated by the next advertiser plus 1 cent.
It turns out a funny situation. The advertiser has set a budget for himself - he is willing to pay $ 10 per impression. And pays $ 2.
Not fair? And how.
How to achieve a fair price and get the advertiser to pay as much as he actually planned?
It is very simple - to plant a decoy duck, which will call the price as close as possible to the winner. Thus, according to the rules of the auction, the winner will be forced to buy the show at almost the price that he announced. Similarly, Appodeal is struggling very effectively with the auction of the second price for Admob and RTB exchanges.
User Information
The RTB standard suggests that advertisers must interact with special companies called the DMP (Data Management Platform) to get more information about users. From DMP platforms known to me - Bluekai , Flurry , Personagraph , Datamonk . That is, after the exchange has announced an auction, the following dialogue takes place:
Exchange: hey, advertisers, there is free space, who wants to show ads?
Advertisers (all in chorus): hey, DMP, what kind of user?
DMP: like a man, it seems 25-40 years old, not exactly sure, but, like, interested in Toyota.
That is, in fact, the reliability of the data that comes from the DMP is still extremely low. DMP makes some assumptions, but they often turn out to be wrong. As a result, many advertisers refuse to use DMP at all, relying only on information that is directly accessible from the application, such as the device model and geographical location.
In order to allow advertisers to bid higher, the application must independently collect first-hand information about its users. Such data can be directly transferred to advertisers, thus increasing the cost of their traffic.
There are two main ways to collect reliable information about users :
1. Social networks. The easiest and most convenient way to collect information. Add a login via Facebook or Vk to your application, request permission to receive personal information of the user and voila - the most accurate information about the user is in your hands. Pass this data to advertisers and watch them gradually increase the rates on your traffic. The most difficult thing here is to figure out what authorization is needed through Facebook / Vk in the application.
2. Surveys . Offer your users some kind of bonus for completing the questionnaire. For example, promise them that they will receive a beta version of your new game. Or give out game currency. There are many ways to motivate a user to complete a questionnaire.
Want to sell traffic in RTB? Take care to collect user data.
CPI vs CPM
It's funny. Traditional networks operate on the CPI model. That is, no matter how many times an ad has been shown. The transaction will take place only when the application is installed. Fair? For the advertiser - yes. But not for the seller.
The fact is that when the advertiser pays for the installation, he is completely devoid of the motivation to work on the conversion of their banners and landing pages. What for? Payment is the same for installation. So we observe situations when 10,000 hits were turned off, for which not a single cent was received. At the same time, the seller has no ability to influence the conversion of advertising. At best, he can block the advertiser, whose advertising is poorly converted and that's it.
The CPM model is completely different. It removes the risks from the seller, shifting them to the advertiser. Want to buy ads in my application? Take care that your landing page is well displayed on the phone with users, and the banner is interactive and high resolution. CPM makes advertisers think. At the same time, the advertiser, unlike the seller, has the opportunity to influence the conversion of their product.
Can you imagine radio or TV advertising being paid pay-per-action? This is nonsense!
The mobile advertising market will completely abandon CPI / CPC and go to CPM over the next few years.
Bonus pro pacing
Most advertisers have a setting for how much money they want to spend in one day.
So, even the largest advertiser is not trying to bet on all possible impressions. Instead, he buys the show, and then sits back for a while until it is time to spend some more money according to his settings. These settings on the advertiser's side are called pacing.
Why does the seller need to know? Because mobile advertising is not exactly the same as the web, and this should be taken into account in order to effectively sell traffic.
By accessing the site, the user expects to see the advertisement instantly, therefore, the exchange should give up the advertisement instantly, choosing from what it has.
Mobile RTB is another matter. The user has launched the application. But he does not need to show ads right away. You can calmly organize auctions in the background one by one, until you find the advertiser whose bid of the seller really suits. As a rule, the seller has about a minute before you need to directly show ads. For 1 minute, you can easily organize a dozen auctions, which significantly increases the chances of getting a good offer from advertisers.
How effective is it at all?
Very effective. The income from applications at the correct setup increases up to 3 times.
Source: https://habr.com/ru/post/290434/
All Articles