Stay on Top of Enterprise Technology Trends
Get updates impacting your industry from our GigaOm Research Community
The ever-expanding world of mobile apps is a brutal place to try to make a living, particularly for independent developers of games and other entertainment-focused titles. ComScore reported a few months ago that a tiny 7 percent of users generate nearly half of all smartphone app downloads in the U.S., while nearly two-thirds of smartphone owners don’t download even a single app in an average month. Meanwhile, VisionMobile reported that roughly 70 percent of developers don’t earn enough to make a living building mobile apps full-time.
The overwhelming number of apps available in Apple’s App Store and Google Play – coupled with a general unwillingness on the part of consumers to actually pay for apps — has resulted in a massive amount of inventory through which mobile ads can be presented. The inventory glut not only dilutes its overall value, it even more difficult for developers to maximize fill rates and fully monetize it through their direct sales team or through a single ad network. So publishers are increasingly turning to ad network mediation, enabling them to leverage multiple ad networks and find the most appropriate network for their ad spaces.
Maximizing revenues while minimizing SDK integrations
To capitalize on ad network mediation, publishers rank ad networks in order of preference. Mediation-based systems then send either ad requests to the top network based on priority, moving down the list until the request is filled. Ads are placed based on the publisher’s priorities – maximizing ad revenue/CPMs is the most obvious, but factors such as geographic reach and, perhaps, the ability to deliver rich media ads – and ads can be delivered via automation or manually. And network mediation can be used to deploy a variety of ads, from simple banners to interstitials to video.
Also, while ad network mediation is primarily aimed at generating as much ad revenue as possible, it can also minimize costs for publishers by serving as a single integrated SDK through which they can access dozens of ad networks. These platforms are increasingly becoming more transparent, enabling publishers to monitor the performance of their ad inventory across networks through the ad mediation platform, making the highest-performing networks top priority and dumping networks that don’t perform as well. And that can help publishers optimize ad revenues even in emerging markets overseas where optimizing ad revenues can be a challenge.
A powerful tool but not a panacea
As effective as ad network mediation can be, though, it has its shortcomings and it isn’t for every publisher. The ability to monetize ad revenues at scale is a crucial advantage, so it may not benefit publishers who don’t consistently generate millions of impressions per month in multiple global markets. Content owners who want to manage their advertising businesses at a granular level may balk at the idea of handing over much of the control to mediation platform operators who use algorithms to automatically change ad inventory allocations. Traditional ad networks have jumped into network mediation headfirst, but they may push their own ad supply rather than helping publishers find the most appropriate ad outside their networks. And monetizing inventory via ad networks is always more costly than selling that inventory directly to advertisers.
For the right publishers, however, mobile ad mediation can effectively boost revenues and fill ad rates in markets around the world, and with relatively small investments. Content owners that already leverage ad networks and have a substantial global footprint should be considering network mediation seriously.