January 13, 2015 by Sean Whitbeck

RTB is Growing Like Mad. Is Your Mobile Marketing Keeping Up?

Real-time bidding (RTB) is the fastest-growing mobile marketing technology. Joining these high-velocity auctions for individual mobile ad impressions is a huge opportunity for tech-savvy mobile marketers.

RTB is the next generation of targeted advertising: whereas more traditional ad-networks offer demographic targeting, RTB exchanges enable individual user targeting. This, in turn, unlocks unprecedented opportunities for more effectively engaging or re-engaging with your customers.

According to Business Insider RTB market share of mobile advertising revenue will grow from 3% in 2013 to 30% in 2018 at a compound annual growth rate of 128%.

rtb-growth

At the end of 2014 this impressive estimated growth already appears to be an understatement. Leading RTB platforms are growing even faster than forecast. From our privileged position as a buyer in all RTB exchanges, we estimate that RTB inventory grew by 400% and revenues by 600%, nearly double the predicted growth rate, thanks to rising eCPMs.

The combination of fast-growing inventory and increasing eCPMs are proof that savvy marketers are finding effective ways to leverage RTB for their user acquisition and customer re-engagement campaigns. This should not come as a surprise given the popularity of RTB for desktop advertising. We believe the huge growth in 2014 is attributable to three main trends:

  • A maturing ecosystem that has come a long way in addressing concerns about brand safety and lack of transparency
  • Growing adoption on the publisher side as programmatic selling increases the money they make from ads
  • Mobile marketers understand the value of targeting individual users

The first two points reflect the fast-paced evolution of mobile marketing, but user-based targeting is the real revolution here and will drive RTB growth for years to come.

From a technical standpoint, the key enablers for user-based targeting are the iOS “identifier for advertisers” (IDFA) and Android’s “Google advertising ID” (GAID). Both of these have built-in privacy controls and uniquely identify a mobile device. This identifier is passed on to bidders during an RTB auction and allows a bidder to follow a device across multiple auctions. Measured through these unique advertising identifiers, RTB’s reach is quite staggering: 1.2 billion users per month and 250 million per day.

A smart marketer can take advantage of these unique identifiers to optimize his or her campaign budget in ways that are simply impossible when reaching out to a demographic audience.

For example, consider a mobile app geared towards working urban females between ages 25 and 35, and Alice and Betty are two such users. Using only demographic targeting, both Alice and Betty would be targeted. However, by combining demographic data with the unique ids associated with Alice and Betty’s mobile phones, we can see that Alice already uses the app. We can then choose to either not show an ad to Alice (and not waste campaign budget) or show her a different ad, deep-linking to a specific in-app action. This is but one simple example. By using user-based targeting, the possibilities to improve targeting on mobile are endless.

So how can you get started with RTB campaigns for your mobile app? Unfortunately the engineering work to integrate with the leading RTB exchanges, bid in hundreds of thousand of auctions per second and make sense of the raw user-data stream can be quite daunting. Partnering with an experienced mobile DSP is the best way to immediately and effortlessly leverage RTB to boost your mobile advertising campaigns.

 

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