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Interview , Monetization

Expert Series: Navigating In-App Bidding with Anastasia Ignatenko

Nastya is Programmatic Product Lead at adjoe with multiple years of product experience working in adtech. She now stands behind the development of one of adjoe’s biggest products: the soon-to-be-launched mediation solution WAVE, which is in beta phase. 

adjoe’s Marketing team taps into her extensive knowledge of programmatic ad mediation, selling ads, and the current state of bidding solutions in the mobile ad monetization market.

Let’s say I’m a successful app developer who wants to monetize my app with ads. How can I fill my ad spaces?

In theory you could set up direct contracts with advertisers, but no one is really doing that these days, since programmatic advertising offers an automated approach. For those who are new to the topic, programmatic advertising uses a combination of software and algorithms that do all the work connecting advertisers (demand) with ad publishers (supply).

Selling ads through programmatic advertising gives you as a publisher access to millions of advertisers who compete for your inventory. It increases the revenue generated from your spaces (eCPMs, ARPDAU), and it also saves you a lot of time and work. That’s because the only thing you have to do technically for your app is perform one integration with a programmatic ad mediation platform.

I want to maximize my revenue in the easiest way possible. What should I consider?

First of all, I have to clarify that a mediation platform connects you with many different ad networks that can show ads in your app.

Let’s imagine a user interacts with your app, and it’s time to show an ad. You send a request to a mediation platform, and it has to choose which network should provide you with an ad and win this impression. This is where two main models come in that mediation platforms use to choose the winning ad. These are called waterfall and real-time bidding (RTB), also known as in-app bidding.

  • Waterfall models will call ad networks in a specific order and always set a minimal price (floor price). Floor prices are set based on historical CPMs publishers get from a specific network. With waterfall mediation, most networks don’t have access to every impression, and publishers will never know what the highest bid could have been.
  • Real-time bidding allows you as a publisher to send ad requests for each impression to every network at the same time and always choose the highest bid.
  • There’s also a hybrid model, which is when some networks are preset in a waterfall, and some are called via real-time bidding.

So, with waterfall bidding, even advertisers who are willing to pay the highest price might not win the bid. How is this attractive for advertisers or publishers?

That’s a very good question. I have to say that in most cases publishers go along with whichever model a mediation platform uses. And the biggest powerhouse ad mediation providers use waterfall or hybrid models, which gives them more control over the system and their revenues.

Bidding-only mediations are fairly new on the market, but we see huge interest in it for obvious reasons: more fairness, greater transparency, and less work with the manual setup. However, many demand partner networks are still unable to support bidding. We believe there will be a big change in the market after Googles announcement that they will change to bidding only by Oct 31, 2023.

As a newbie to ad monetization, I’ll go for the newest solution: bidding-only. How much will that cost me?

That’s the most interesting part. All big mediation platforms are “free” of charge. However, they have to make money somewhere, and this is where there’s an issue. 

These platforms operate on a revenue-sharing model, meaning they typically take away up to 60 percent of the bid that was placed by the advertiser to finance their business. 

adjoe was in the position to test this by running campaigns for our sister companies’ own app supply – we saw the numbers on both the demand and supply side. This allowed us to measure the difference between what an advertiser pays and what a publisher gets.

So, it looks like this shared-revenue money gets taken directly from your pocket, and you as a publisher will not even know about it because you’ll only know the final bid. In theory the solutions cost nothing. In practice, publishers lose out on revenue with these revenue-sharing models.

Another thing to consider is that big ad mediation platforms on the market integrate their own direct demand. This demand participates in the auction and directly influences the amount of revenue ad mediation platforms earn through revenue sharing.

So publishers don’t even know how much they are losing? Is there a way to avoid that?

It’s not ideal. We understand how unfair and frustrating that is. Some very big publishers might be able to negotiate fixed revenue share agreements, but from what we can see this is the exception. That’s why adjoe has built a programmatic ad mediation platform, which is a transparent unbiased bidding-only solution with no revenue-sharing model.

But how will you make money if there is no revenue sharing?

It’s quite easy: We don’t charge anything from the ad spend between an advertiser and a publisher. Publishers will pay us a monthly SaaS fee for selling ads through our mediation software.

So, we have a completely different business model to any that are on the market – it’s what we like to consider a fair ad meditation solution. What we have done is closer to what software development companies do rather than advertising agencies, and we believe this is how it should be.

product banner for WAVE ad mediation showing woman on her phone

Why don’t other mediation providers do it like this?

Well, the adtech powerhouses don’t do it for the reasons we mentioned above. The main reason is that margins on the traditional business model revenue share is very high for adtech providers, however, not for publishers…

There were a couple of companies who tried building bidding-only mediation, but they were not very successful. This was because they didn’t have one very important component for success.

You need to find a way to motivate ad networks to bid higher and higher. That’s why adjoe has its own direct demand to whom we don’t charge any revenue share. And because we don’t do that, our bids are higher than average on the market. We participate in the auction, and to match our CPM level and win impressions, other networks need to bid higher (and they do so).

Another problem is that entering such a mature market as programmatic ad mediation is very challenging. You need to solve the chicken-and-egg problem of growing your supply and demand partners at the same time, and we at adjoe have a unique advantage. We’re a part of applike group and are able to leverage our sister game development companies Sunday and justDice – the biggest ad buyers on the mobile market.

Can I test WAVE – and if so, how?

We are in beta and are running tests with selected publishers only right now.

Our Programmatic team is and continues to be very careful and patient with the tests. We select our clients for the beta phase carefully. Our top priority is after all to maximize revenue for our publishers and build long-term partnerships with them.

If you want to be part of this, then drop a line to our email to receive regular product updates from the adjoe team.

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