Apptica Talks. Episode #2. App monetization trends with Stafaniya Radzivonik and Ahmed Chakroun from Smaato.

“Bidding is definitely a future and highly likely it will fully replace the waterfall model, however, our marketers and exchange algorithms across the whole ad tech industry are still not ready for this quick change and transition”.

In this episode Apptica Talks about app monetization trends with Stafaniya Radzivonik, Business Development Team Lead, EMEA and Ahmed Chakroun, Sr Mobile Product Manager at Smaato.

What we have talked about:

• Career and expertise of the speakers
• The best performing ad format, current state of rewarded ad
• Different approaches for iOS and Android
• Native in-game ad
• Insights into bidding: waterfall vs header bidding vs hybrid mode
• Privacy: GDPR, TCFv2
• Trends for 2023.

Key insights:

Gaming Apps. Ad formats.

• There are the highest eCPMs and fill rates for interstitial and rewarded formats as they are more user-engaging.
• Interstitial ads are extremely effective for driving clicks and conversions.
• Rewarded ads have the highest engagement level, however, these types of formats can be considered by some users as intrusive ones, so frequency capping is a key parameter to pay attention to.
• Display ads are still keeping their positions in casual and hypercasual games such as sidebar banners or bottom sticky banners
• Hard-core and mid-core gaming publishers, which traditionally worked only with performance-based ad networks, started adding branded ad networks to their waterfalls and display ads but mainly in the form of either static or dynamic in-game ads. There is a tendency across publishers to reconsider display ads and add more display ad placements to increase their overall ad revenue.

Non-Gaming Apps. Ad formats.

• Native ad format is dominant here as it’s less disruptive but still user-engaging. Interplay between display and native brings the highest eCPMs + the best fill rates.

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• Playable ads are definitely the best-performing ad format for user acquisition campaigns. This format meets all the performance criteria for both publisher and advertiser.
• A tendency of eCPM decrease for rewarded videos. It is not connected with the demand itself but with the shift of inventory/ad placements on the publisher side. Recently, publishers started to prioritize INT over RV.
• There is a low iOS traffic and higher eCPM because the competition is tough. SKAOverlay feature released by Apple in 2020 is now actively adopted by the SSPs and the advertiser. For Android, the volume is high, the eCPM is lower than iOS, but as the Android ID is still there, the advertisers and MMPs have better capabilities to track the user. Conversion attribution is also easier and more accurate.
• In-game ads: non-clickability is pretty challenging. Well-known brands are ready to pay higher eCPMs to improve their brand awareness by means of in-game ads, however, other buyers – especially in user acquisition, performance, retargeting, data/location peers – are hesitant to try them. That leads to low fill rates. Such types of ads are not appropriate for all types of games. And it costs money for publishers to create/adjust such ad placements in-house. Future of in-game ads is pretty uncertain.
• Bidding is definitely a future and highly likely it will fully replace the waterfall model, however, our marketers and exchange algorithms across the whole ad tech industry are still not ready for this quick change and transition. So, if there is a way to run a hybrid model that can be a yardstick for publisher revenue streaming within a transparent and fair real-time auction between marketers/advertisers.
• One of the challenges DSPs are facing to be competitive and perform with bidding is that, unlike the waterfall, the publisher generally doesn’t set any floor price, which constrains the DSP to invest in creating trained machine learning algorithms that optimize this bidding strategy toward a competitive ROI.

3 Trends to bear in mind in 2023:

• Privacy: more and more restrictions in regards to data privacy are coming, we already have TCF v.2 for Europe, LGPD for Brazil, CCPA for California - data restrictions are going to apply across all US states in the future. And this is where the adoption of GPP is essential
• In-house mediation: publishers would love to get more controls over their inventory, audiences and revenues; big in-app players tend to use proprietary ad servers and build their own in-house mediations
• The market and specifically the SSPs moving toward providing maximum flexibility to the DSPs to control the operations of the exchanges SDKs while providing publishers guarantee and control to protect the user experience, the ad quality, and more revenue
  

You can learn more about Smaato on the website and get more insights in its blog

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