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September 29, 2015 | By Adelphic

This edition of Real-Time Banter features a talk about the state of mobile advertising with Janae McDonough, the senior director of MoPub, the world’s leading ad server for mobile application publishers. Janae was interviewed by Adelphic’s Chief Strategy Officer, Jennifer Lum. 

mobile advertisingJennifer: What is MoPub?

Janae: The best way to think about MoPub is in three different areas: (1) Direct revenue generation for publishers through our ad serving platform, (2) mediation, and (3) my favorite area of the business, the exchange. Our core focus is really helping publishers make the most money from placing ads in their applications.

MoPub provides monetization services to over 30,000 apps. What are the key components of a successful mobile app monetization strategy?

Ideally any time a new publisher comes on a platform, we’d love them to follow our best practices playbook. A few of the key ways we recommend getting start include:

  • Connect to all demand: The first critical piece is making sure that the publisher connects to all the demand sources that matter, and lets them all compete for that publisher’s inventory. This is going to ensure that they’re yielding the highest paying CPM for every impression. So that means direct ad serving, their networks, and the exchanges aren’t tied to specific priority levels for those particular demand sources. Let them all compete, and whoever is going to pay the highest should be the one that wins that impression.
  • Don’t set global floors: All geos aren’t all created equal. Too often we see publishers set price floors globally, and the reality is that the demand for inventory may vary drastically from one market to another. So we really encourage our publishers to think about their inventory based on the demand that we’re seeing, and our team is here to help them with that.
  • Leverage multiple ad formats: Publishers should aim to support a variety of formats that make sense for their app, keeping in mind that the user experience is important as well. Richer formats like interstitials and video as well as native are going to yield higher CPMs and ultimately drive revenue for our publishers.
  • Data availability: Data is something that continues to pop up and for you guys, as a DSP, I know you value data. We can’t always glean everything from the SDK level around the device or the app that’s being used, so publishers’ ability to collect more data and pass that in a meaningful way to the marketplace is something that we’ve really seen buyers value. So from a monetization standpoint, publishers should be considering this as part of their broader strategy.
  • Be open to testing: The ecosystem is changing every day, and what worked yesterday may not actually work today. So we’re constantly pushing our publishers to remember that what might’ve been true a month ago may not be true today. Demand, for example, might have been nascent in China but is exploding now, so publishers should really reconsider testing inventory in that market or adjusting their price floors. And I think being flexible to testing new opportunities will unlock new revenue streams that haven’t yet been realized.

Have you observed any noticeable differences between the bidding behaviors of desktop-focused DSPs versus mobile-focused DSPs?

What we’ve started to notice is that the DSP algorithms differ based on the objective that they’re trying to focus on, so it’s less about desktop versus mobile and more about the objective they’re driving toward. So is it retargeting versus performance or brand performance versus cross-device? In the retargeting instance, we tend to see that when DSPs are bidding very aggressively for a specific user, it’s because they have insights into that user that are encouraging them to bid higher. The same is true with performance. DSPs know that the user has a high LTV—if it’s a gaming user, for example—so we’ll see aggressive bidding in that area.

Whereas brand performance is entirely different; they may be looking for a completely different set of KPIs – so it could just be reach and eyeballs – so there’s more consistency in their pricing around bidding.

If we were to drill down and look at a legacy desktop DSP now buying in mobile, we tend to see them bid mostly on formats that they’re familiar with—banners being the most prominent as it’s easier to transition from desktop in banners to mobile. They tend to focus on inventory that’s constrained towards a predefined CPM rather than using aggressive bidding mechanisms to actually surface and find new inventories at different price points, so it’s fairly consistent bidding.

On the other hand, mobile-focused DSPs are going to bid on the more mobile-centric formats like native, native video, video specifically, interstitials—formats that are unique to the mobile device and not necessarily bridged over from desktop. In terms of algorithms, you’re going to see a far more aggressive set of bidding behavior on a mobile-first DSP. They’re leveraging a larger set of data that we’re passing, so I think that things that are coming from the SDK are allowing the DSP to make more intelligent or more precise buying decisions. This is just what we’ve observed from our end.

“You’re going to see a far more aggressive set of bidding behavior on a mobile-first DSP. They’re leveraging a larger set of data…to make more intelligent or more precise buying decisions.” – Janae McDonough, MoPub

We’ve noticed a difference in MoPub’s focus on apps versus apps and web, in that you are able to expose and share mobile app data in an effective manner that allows us to ingest it and make better decisions around that data. It’s the availability of the data but also the structure of the data that allows us, as a mobile DSP, to make great decisions.

Exactly. It’s hard for us to see that on our end, but it is one of the assumptions that we drew—that more aggressive bidding behavior in the variances and CPMs is likely contributing to the data that your systems have access to, or at least are built to ingest. Whereas desktop DSPs are cookie-based and looking for legacy cookie type behavior which is obviously non-existent in the mobile app ecosystem. So it sounds like you’re validating what we see on our end based on how you build your systems and the data that you use to make your buying decision for advertisers.

What do you expect the split of available inventory between display, video and native to be through MoPub’s exchange in 2015?

I think it’s going to be a pretty tight race, at least between native and video. But my guess is display is going to be the front-runner through the rest of 2015, and if I had to put a number on it, I’d say a significant percentage probably still going to go through display moving forward. We allow video to run inside of an interstitial, so there is opportunity to have a really incremental impact on available supply because it can start taking away from display. Areas which are smaller in the exchange, but growing fast are things like video and native, which make up the majority of the inventory outside of display. Beyond 2015, at least for MoPub, we’re putting a huge emphasis on video and native and our teams are tasked with growing the available supply there, mainly because the user experience is far richer. Advertisers like the richer landscape, and from what we’re told from our DSPs, richer formats also tend to have a higher performance value. So we’re going to push to make that a larger swath of our inventory on the exchange as we move into 2016.

When will Twitter’s owned and operated inventory be available to buy through MoPub’s exchange?

I can’t share too many specifics here – but what I can tell you is our team is working on a holistic approach that will work not only for Twitter but for our demand partners as well. We want to make sure that if we do make this inventory available it’s with the least number of hurdles that our DSP partners have to clear, because the more hurdles we have to clear, the less valuable it is to everybody.

There are some personal facts about you that I think people would like to learn about. What was your first mobile phone?

So I’m really excited to answer this question, mainly because I had to call my mom because I actually can’t remember my first mobile phone. I said, “Mom, I need you to go into my bedroom, into this drawer, into this box, there’s a phone in there.” It’s an Audiovox and I couldn’t figure out if it was the MVX480 or MVX460.

mobile advertising

What is your favorite mobile app, aside from Twitter?

By vertical, Twitter twitter-icon2 for news and content—and I’m not just saying that. For distraction and entertainment I’d have to say Instagram instagram-icon because it’s what I look at before I go to bed at night and it’s like a complete distraction from the rest of the room for the rest of the day.

I love Instagram too. I find my mobile behavior to be similar. When I have idle time, I regularly open both Twitter and Instagram, for the same reasons.

The Delta app fly-delta-icon is my favorite utility app—have to book my flights! So those are the three most used on my phone.

Janae, thank you so much. The details and insights you shared were very interesting and we really appreciate your time.


Check out our previous edition of Real-Time Banter featuring Justine Watkins, managing director of Amnet and our third edition featuring Ian Johnson of Cadreon.