Unboxed: Can in-app advertising really deliver value?

While both the average time spent on mobile and app usage has been on the rise for quite some time, this year the global stay-at-home measures have made mobile phones the constant companion of many consumers.

According to a PubMatic report discussing the future of mobile, the mobile app continues to be the preferred access point to the consumer’s digital world. Today, the vast majority of smartphone users spend most of their time on apps rather than web browsers, with the average person spending two hours and 57 minutes on apps compared with only 26 minutes on a mobile browser.

COVID-19 lockdowns has also seen even more people turn to mobile for information, entertainment, a connection, and a sense of normality.

However, mobile platform and in-app advertising comes with its own share of challenges. While media buyers rely on a slew of metrics to measure the performance of their campaigns from clicks to installs and purchases, the fundamental issue and question which can still be difficult to measure and answer is whether or not the ad was actually seen.

In this episode, we speak to Cyrion Wang (pictured top right), head of programmatic at Meitu, and Lashanne Phang (pictured bottom right), associate director, publisher development for APAC at PubMatic, on some of the developments in the space and what we can expect in the future.

Listen to the full episode here. This conversation is powered by PubMatic.

MARKETING-INTERACTIVE: Meitu is seeing a lot of growth coming from the Southeast Asia markets, namely Indonesia and Thailand, amid the pandemic. Could you shed a little more light on how you managed that?

Wang: We have been really impacted by the pandemic, but we did a lot of breakthroughs in Southeast Asia. During the pandemic when everyone was forced to quarantine at home, we noticed that people were spending more time staying with family and also consuming digital content through their mobile devices.

So, we saw the inventory increase, but at the same time, many advertisers had to cut their marketing budget to save costs, since consumers have limited access to their services such as Airbnb, and Hotels.com. Other firms also partially moved their budget to the mobile areas and that was our chance because we have the AR experience and case studies for [clients], which have proven to increase the conversion rates for [our clients].

In Southeast Asia we did provide something special, such as the virtual try on technology. We also have some projects called the magic mirror and Meitu Genius which will be input into online stores such as Sephora and DFS.

When people are shopping online or offline, they can virtually try on those cosmetics. At the same time, they can do the skincare and app analysis based on those skin analysis reports, and we can do the product recommendations for them. This is the kind of new user experience.

MARKETING-INTERACTIVE: With time spent on mobile at an all-time high, how can brands make the most out of it?

Phang: This is partly driven by a pre-existing shift to mobile and also driven by the pandemic. The pandemic has also redistributed consumer time spent on mobile. They are spending more time on video-streaming, gaming, health, fitness apps, news apps, and of course, social media.

A key point here is that mobile inventory is really allowing brands to be where their consumers are. Aside from the obvious benefit of being where their consumers are, there are lots of other advantages for brands with mobile inventories and one of them is being able to better target.

The recent Apple announcement on the IDFA has caused ripples in the industry and will make personalised advertising more difficult in the market, where iOS is the dominant OS. Thankfully not in Asia though as we are still highly dependent on the Android OS.

The device suddenly has a longer life span, basically as long as that of a handset. The tracking and the targeting of users are prolonged and could be more accurate with all this richer data collected over time.

Marketers can basically assume that they are very likely to target a unique individual. Cross-device tracking also becomes more complete with device ID that allows marketers to identify users across mobile and basically connect those same users with the data they input from their desktops and connected TV devices.

Last, for mobile, specifically, this is also one of the key points that the location data or targeting becomes more effective and it’s more accurate for marketers. So that is just on the topic of mobile being able to provide more data points with device ID for better targeting by marketers.

Another big benefit that buyers can take advantage of is the new invention of 5G. Mobile in-app advertising is about to get a huge boost for this advancement.

Statistics show that by 2023, global 5G smartphone shipments will actually go beyond 424 million so that is a huge market out there. 5G phones are expected to represent a major performance lead for the user experience on mobile, particularly with high-definition media and interactive technology such as mobile gaming or mobile video-streaming spaces.

This development opens up a wealth of opportunities for advertisers, giving them greater room for creativity, and opening doors for them to deliver higher quality interactive ads to mobile devices.

AR is also a good platform to tap into and I really think this is definitely the time for media buyers to start taking advantage of all these rich data points that we mentioned earlier that mobile inventories can offer, in terms of targeting and supporting for better ROIs, or even better ad experiences for their targeted consumer.

And last, there is a huge influx of mobile in-app supply, basically driven by the increase of consumption because of how mobile users’ behaviour has shifted. Therefore, with that increase in supply, there is downward pressure on mobile CPMs which means that advertisers can basically start experimenting on this format at lower rates and start to design what sort of a strategy they have.

MARKETING-INTERACTIVE: What is the value you see from header bidding and unified auction? How will that impact ad monetisation moving forward?

Wang: Header bidding actually is a new technology which allows publishers to send the ad request to multiple supply side platforms or the ad exchange simultaneously.  I think by utilising header bidding, the publisher will get a fast ad response which means that you will see the ads with enhanced latency, and it’s really good for the user experience. Also, from the configuration part, the engineering cost, and the whole integration will be much easier for the publishers.

Third, it’s about the result. Publishers will normally get a higher yield by introducing more bidders into the ads auction and this is really good. But most importantly, I think publishers could realise the value of its audience and also recognise the power of data. Try to imagine that: when publishers work together to create a better world of the utilisation of first party data.

Ideally the concept of the publisher trading desk can work and publishers can talk to the buyers directly. The ads transaction and whole supply chain will be more transparent, and the business model will be more efficient, accurate and sophisticated.

And besides, I think it really eliminates the concern of privacy to some extent because it avoids the misuse of data, since publishers have few rights to process the data. I think publishers can devote more of their efforts to the app itself. We can focus on the app without worrying about the revenue and we can focus on the user experience and the user flow, design and how to get more innovations like you said. And with the upcoming technology such as 5G and the short video, we can learn something from it.

Join us on a three-week journey at Digital Marketing Asia 2020 as we delve into the realm of digital transformation, data and analytics, and mobile and eCommerce from 10 to 26 November. Sign up here!

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