Where 2016 Sought Standardization in Mobile Native Advertising, 2017 Will Seek Differentiation

The basic economic models of supply and demand suggest that the mobile advertising market has been in a steady equilibrium in 2016. Advertisers could find more traffic sources to reach more users while mobile app publishers got access to more ad revenue streams day to day. Looking back at 2016, these were the important advancements that will highly influence further development in mobile native advertising industry:

  • Mobile programmatic has been intensively fighting fraud on the standard ad formats. Victory is not yet there, but each mobile DSP has partnered with a fraud prevention solution (or 2).
  • Clear identification of the ad to the final user has become a mandatory requirement among the top traffic routers. Ad choices, opt-puts, “sponsored” have familiarized end users with a “recommended” and “personalized” content.
  • With Spotify’s audio ads and Snapchat’s branded filters, native advertising  has again jumped 2 steps ahead of rusty budget holders. Once again, native advertising proved to be worlds more than just Facebook’s widely spread in-feed unit.

Looks like the market is growing and seems to be as stable as never before. Sounds promising. But what are the holy grails and challenges for the major players in the industry? What are they craving for and what will prevent them from getting there?

(+) – what great can happen.
(-) – what can stop it.

Publishers

(+) Unification. Less SDKs, less dashboards, less integrations, less updates.
(-) Advertising bucks are still main sources of app monetization. Advertisers feel in control and don’t rush to change the status quo. Improvements for publishers will only come from other publishers, e.g., Snapchat opening up their ad API in order to best accommodate big brand budgets at hand (introducing Snapchat’s brand ad network). This year, premium publishers will see eCPMs go up, and publisher-side innovation is something to closely look for.

Advertisers

(+) Clear transparency in traffic bought and ad displayed.
(-) No way to merge ad formats & traffic sources into one fat but straightforward analysis.
Don’t expect that one advertiser platform-to-rule-them-all will be born this year, or ever. Too much information greed out there.

Service providers

(+) Definitely golden age: APIs, white-labelings, DMPs, spot instances and co.
(-) Biggest players in the market building in-house solutions.
Great year ahead – marketing is booming, therefore supporting services are as in demand as never before.

You (user)

(+) Ad quality standard has never been more relevant than now. By the end of 2017 we might even see relevant sponsored content recommendation that is neither about celebrities nor about cats.
(-) You still do not financially benefit from ads. Just be patient for yet another year, you don’t have much of a choice anyways.

So, what does it mean for the future?

Exercise #1

Look out for new formats. Below are the 4 screenshots with ad formats of my top frequently used apps. Put a calendar reminder to double check how these formats will look like in December, 2017.

native_ad_formats_to_look_forAudio ads are not to be missed, too.

Exercise #2

For premium publishers, traditional in-feed native ad unit can yield XX$ per user per day in US, YY$ in Germany and ZZ$ in Thailand with a basic waterfall from the 2 largest ad exchanges (on Android). Write down generic revenues per user from the publisher side and see them grow +50% next year. Big brands are mobilizing, bringing colossal budgets to the table, so the short term future looks bright for the publishers.

supply_demand_mobile_advertising

Summary

In 2016, mobile advertising further diverted to a native format, market prices equalized, transparency between displayed and demanded as well as fairness of the trade increased. Accordingly, 2017 will see diversity of rich ad formats, complex mediators and header-bidders. There will be a rise in data security service providers & user privacy differentiators. We probably will not see 2017 as a year of stabilization and unification, but it will definitely be an exciting year of distruption.

Cheers to a fun year ahead! Watch out for the new formats, more ad dollars spent, and more complex platforms to appear.

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