Real Time Bidding: A Practical Guide For App Marketers

Adrienne Gauldie is the founder of London Mobile and spoke at the App Promotion Summit London 2014 on the topic of real time bidding.

The talk covered the following topics:

  • Myth Vs Reality – What Does RTB Actually Deliver For App Marketing?
  • How To Programmatically Buy Installs Using RTB
  • Optimizing Your Approach And Finding The Right Platforms And Partners

Now we’re able to share the video and audio recordings of the event and you can find this talk and more in our App Promotion Summit London 2014 Bundle.

Real Time Bidding Video:

Real Time Bidding Audio:

Real Time Bidding Transcript:

Hi, I’m going to just tell you a little bit about RTB because I talked to a lot of advertisers and there’s a lot of talk about RTB but a lot of people aren’t sure about what it is, how it works, what you can actually do so I’m just going to do a super quick rundown on what’s going on with RTB.

First of all, can everybody hear me? Am I addressing the microphone adequately? Yes? Good. Okay. Who am I? I’m an independent consultant. Over the last few years, I’ve worked for publishers selling direct deals, selling CPI inventory. I opened the London office for a company called Trademob, a data-driven basically mobile advertising company. Most recently I worked for App Annie and now I’m doing user acquisition consultancy, mostly for startups across London. And I’m not associated with any networks or agencies or RTB platforms or anything like that so once we get away from the facts, it’s strictly my opinion, take it or leave it.

So this article from Business Insider is actually talking about desktop ad banners but the vibe is the same in mobile, I mean its worse in mobile. Banner ads don’t work very well. I’ve never intentionally clicked on a banner ad. You know, the little ones at the bottom of the screen. And when I was at Trademob we released a study that said that 40% of clicks were either fraudulent or accidental. And that’s kind of a big part of your budget.

So over the last few years, there’s been this sort of vibe in the industry that RTB is going to be the thing that saves the banner ad. And more and more now we’re getting great new formats; we’re seeing a lot more full screen interstitials. But there’s still this sort of momentum behind RTB and kind of a lot of hype that comes with it. And part of the momentum behind RTB with mobile is really that mobile is going to follow desktop advertising and RTB has become a really big part of digital advertising on desktop. But there are two really critical issues that make mobile really different from desktop advertising.

One, at the bottom actually, I’m going to start at the bottom, is that on the desktop, the click is the thing. Once you click, you’re through to the webpage and you’re showing your consumer the shiny toy, or the jumper, or whatever it is that you’re trying to sell them. You can deep link it. The click is the thing. When we’re talking about advertising native applications, clicks are good, installs are the thing. You have to have launch for it to even matter. And that’s a huge difference.

And to go along with that, last click attribution isn’t nearly as easy because of all the tracking issues that we’ve had over the years. I think most of you guys are probably aware of the evolution of attribution tracking over the last few years, starting with spreadsheets, EDID’s, and timestamps and then evolving all the way into IDFA today. And this is important so that we can have attribution for our channels. So that we can attribute that install to the click that it came from. It’s a really simple concept but to be able to optimize anything post-install, you’ve got to be able to attribute the install back to the last click. And so the IDFA is the identifier in iOS that Apple is now providing and that’s enabling targeting and RTB things to happen much more effectively now.

So how does it work? Just really basically, there are two cool things that are going on in this picture. One thing is the ad exchange. So, a long time ago, well probably actually still happening today, if you’re an ad network and your supply exceeds you’re demand, you’ve got remnant inventory somewhere in a backroom there’s a deal that takes place where one ad network sells their leftover inventory to another ad network. And this is still happening but what that results in is lack of transparency, really for the advertiser. You don’t know actually what inventory you’re buying and you end up paying for it three or four times depending upon who’s buying from who’s buying from whom. And so what an ad exchange does is aggregates, on the one side demand, on the other side supply, and it minimizes the sort of buying from buying from buying from buying.

The other cool thing is the real-time bidding. So if you’ve got a real time bidding enabled demand-side platform, that means that you can choose which kind of impressions you want to buy, what kind of users you want to reach out to in real time. And on the other side, and how much you want to pay for it. And on the other side your suppliers can decide which kind of bids to accept. So on the demand side, we’re optimizing toward revenue targets, toward KPI’s. And on the supply side, they’re optimizing toward maximizing their ad revenue. And then we’ve also got third-party data coming in from other companies that will give us data on groups of users and user behavior and stuff like that.

And, in theory, you can do lots of cool things with this stuff. You can do retargeting. So the best example of this is cart abandonment. If you’ve got a list of users that you know have put products into the shopping trolley and then abandoned cart, you can give that list of IDFA’s to your DSP and say if those IDFA’s come up, I want you to bid on them and they’re worth this much to us because all they have to do is check out. That is a cool idea.

Negative targeting. You can say I don’t want anybody that already has my app or that already any list of characteristics. You can say look, we don’t even want those guys and that can maximize your efficiency. Geotargeting, hyper-local stuff. In theory, you could maybe target even where people are at the time the impression comes up. Also demographic and behavioral targeting. This is done on the web a lot with cookies. And cross-device audience extension.

However, in practice, this is where opinion comes in, you’re probably going to run into two problems. The first is scale. So yes, maybe it’s working beautifully, you’re seeing amazing ROI but you’re only getting five installs a week or five buys a week. You know, I mean obviously the technology works but is it useful? The other problem is cost. So you might be able to do the things that you want to do. Technically, you might be able to implement them but maybe your cost per install are coming out to 50 quid or something like that. But, you know, it does work.

So if you’re interested in buying RTB traffic, the thing to keep in mind is that it’s a bit of a dark art and you’re going to have to test things and see what works for you. You can’t expect miracles from it. And so just to give you a quick run-down on what’s out there, this is not a comprehensive list, but this is just a quick list of the exchanges that are out there. Mopub is mostly got in-app inventory recently acquired by Twitter and I think we’re going to see some really interesting stuff going on with Twitter. I think Twitter actually spoke this morning. Double-click. Rubicon has been historically in desktop and are moving more and more into mobile space. And then we’ve got companies like Sumato and Interactive that are sort of classic mobile SSP’s.

And then DSP’s. Which is probably what we’re more interested in as advertisers. The first thing you might notice about this list is that it’s a little bit longer. I mean this isn’t even a comprehensive list either. But it’s quite a fragmented space. And there are a couple of reasons for this. The first being that it’s really easy for an agency or a network to rebrand as a DSP by just saying hey, we’re a DSP. And technology is what differentiates a real DSP from not the DSP. If it’s really an ad network or an ad agency that’s just decided to call themselves a DSP, the technology won’t be there, and it’s really hard to tell as buyer without transparency where your traffic is coming from, how they’re buying it, how much is programmatic and how much of it is manual buying. So is it really an algorithm or have you got a room full of buyers that are sitting and it’s not quite as efficient. It can work but not quite as efficient and you should know what you’re paying for.

And so I think the real take-home from is that RTB is really promising and there’s some great stuff happening but it’s early days. The tech infrastructure, isn’t, you know there’s no standardization. Publishers aren’t all passing back the same kinds of information. I think there’s still a lot of privacy issues like regulatory issues that are being worked out. There are all kinds of companies with fantastic information on user behavior but how we’re going to be able to use that across countries, even within countries and be compliant with legislation is all still sort of being worked out.

And I think one of the big take-homes is that if you can, one of the biggest advantages or RTB is transparency. And buying from an exchange with transparency. You should be able to get publisher ID’s back from who you’re buying traffic from. Understand where the traffic is coming from, and have a good look at your reporting because you should know what you’re paying for. But I would say, do buy from an agency or trading desk if you can. If you’ve got the budget, and it’s worth playing around with RTB, it’s really hard. It’s quite hard to do it properly. And there’s a skill set that comes with doing it effectively. It’s probably better for you to hire somebody to do it that know what they’re doing rather than trying to do it in-house, if you’re got the cash.

Having said that, a lot of people are wanting to develop the skills in-house. If you really want to do that, don’t think of it as a cost-saving exercise. You’re going to spend just as much money testing it, trying to figure out how does this thing work, what kind of targeting is going to work for us, what kind of retargeting is going to work for us as you would by just hiring an agency. So that would be my real take-home from this.