HOW to CONFIDENTLY ENGAGE MOBILE CONSUMERS at SCALE the Brand Advertiser’S Guide to Mobile Programmatic

HOW TO CONFIDENTLY ENGAGE MOBILE CONSUMERS AT SCALE The Brand Advertiser’s Guide to Mobile Programmatic

1 CHARTBOOST POWER-UP REPORT DECEMBER 2017 CONTENTS

Introduction 3 What is Programmatic Advertising? 4 Making Sense of the Programmatic Ecosystem 5 Types of Programmatic Media Buying 6

Mobile is King 7 Resolving Common Programmatic Misconceptions: Desktop vs. Mobile 9 Resolving Common Programmatic Misconceptions: Mobile Web vs. In-App 10 The In-App Programmatic Advantage 11 In-App SDKs Collect the Data You Need 12 Reach the Most Engaged Mobile Audience at Scale 13 Deliver Compelling In-App Creatives 14 Video Ads 16 What does Opt-in really mean? 16 Interactive/Playable Ads 17 Static Ads 18 Full-Screen 18 Banners 18 Conclusion 19 Chartboost Exchange 20

2 CHARTBOOST POWER-UP REPORT DECEMBER 2017 INTRODUCTION

The digital advertising space has evolved at a rapid pace, much of that can be attributed to two main factors: mobile dominated digital media consumption in apps and major technology advances in automated media buying.

rogrammatic is a hot buzzword in today’s mobile Programmatic, the automation of buying and sell- Padvertising industry. While most marketers hear ing of digital inventory, offers a huge opportunity for about programmatic advertising, many of them are brands and performance marketers to reach a spe- still confused about it and how it fits into the mobile cific audience with tailored messaging as they en- ecosystem. Its no secret we’re spending more and gage with their favorite apps at scale. more time on our phones. In fact, digital media us- age time is driven by mobile apps, with smartphone This power-up report aims to provide a comprehen- apps accounting for 69% of all time spent -- com- sive guide to understanding what programmatic is pared to 34% on desktop and 7% smartphone mobile and how brand advertisers can use it to drive long- web. Turning to mobile programmatic, is essential for term ROI. We’ll then dive into the various ways to marketers who want to keep up with the way people buy mobile media programmatically and different interact with technology. creative types to optimize performance.

Brands that have had success with programmatic marketing on desktop simply can’t afford to ignore mobile if they want to reach their ideal customers. With mobile programmatic, brands can combine so- phisticated targeting with rich mobile device data.

3 CHARTBOOST POWER-UP REPORT DECEMBER 2017 WHAT IS PROGRAMMATIC ADVERTISING?

rogrammatic uses software to automate the buying and selling Pof ad inventory leveraging computers and algorithms, as op- posed the traditional human led insertion order process that requires tedious heavy lifting. Before the age of programmatic, a typ- ical digital advertising process involved drafting several request for proposals (RFPs), one-on-one negotiations, and manual inser- tions of orders (IOs), making this way of media buying particular- ly inefficient and slow -- especially when processing hundreds to thousands of orders at a time.

Programmatic is important for both buyers and sellers because it automates traditional workflows and allows for quicker, cheaper and better targeting than traditional digital ad buying techniques. Equally as important, programmatic enables marketers to target success metrics more closely, and continuously optimize performance towards campaign KPIs, therefore increasing overall ROI. It also allows a marketer to gain more customer insights, as the technology continually gathers “smart” data, based upon the type of individual that engages with the brand. A marketer can then take these learnings and apply them across all marketing efforts to increase overall campaign performance, which creates a more streamlined, holistic approach to marketing.

4 CHARTBOOST POWER-UP REPORT DECEMBER 2017 MAKING SENSE OF THE PROGRAMMATIC ECOSYSTEM Before we jump into the specifics of mobile programmatic, let’s first review who the biggest players in the programmatic advertising ecosystem.

Agency trading desk (atd) supply-SIDE PLATFORM (sSP)

An ATD is a massive media buyer and re-sell- An SSP gives publishers a platform to “sell” their er, which functions as an independent work- digital (app or website) inventory to advertisers ing unit within a large media buying concern. placing bids through multiple ad exchanges, ad This technology helps to manage program- networks, and DSPs at once. Through the SSP matic media acquired through a bidding sys- interface publishers manage impression inven- tem, which intends to seek a certain audience. tory and can choose to exclude/include adver- Marketing specialists make use of program- tisers based on ad quality, experience, and rev- matic advertising obtained through ATDs and enue generated. optimize results using DSPs, especially when there is the need for re-targeting when an ad DMP campaign is underperforming. data managment platform (DmP) A DMP collects and aggregates first-party data (data from your own digital properties) plus DEMAND-SIDE PLATFORM (DSP) ad exchange third-party demographic and behavioral data to give you a 360° view of your users. By bringing A DSP is a platform that allows buyers to pur- An ad exchange is a digital marketplace that to purchase using technologies like de- this disparate user data into a single view, the chase ad inventory across multiple ad ex- enables advertisers and publishers to buy mand-side platforms. Those decisions are DMP provides key insights into online and offline changes from a single source. Advertisers and sell advertising space, often through re- often made in real time based on informa- activity to help you define narrowly targeted au- leverage the DSP’s interface to manage bids, al-time auctions. They’re most often used to tion like the user’s historical behavior an diences. Based on specific behavior, interests, set targeting & retargeting criteria, aggregate sell display, video and mobile ad inventory. ad is being served to, time of day, device demographics, purchase history, buying stage, disparate data, and optimize campaigns in re- Advertisers and agencies typically use DSPs type, ad position and more. etc. you can formalize each segment’s criteria. al-time auctions. to then pick which impressions they wish Armed with a wealth of insights you can then send highly targeted messages that not only resonates with your core audience, but inspires them to take action.

5 CHARTBOOST POWER-UP REPORT DECEMBER 2017 TYPES OF PROGRAMMATIC MEDIA BUYING

Real Time Bidding (RTB) Programmatic Direct Private Marketplaces

One of the biggest misconceptions about Programmatic software allows advertis- An invitation-only RTB auction where one programmatic is Programmatic and RTB ers to buy guaranteed ad impressions publisher or a select number of publish- are interchangeable naming conventions. in advance from specific publisher sites, ers invite a select number of buyers to also referred to as Programmatic Direct. bid on its inventory. Inventory purchased RTB is the process of buying each advertis- Programmatic Direct is direct sold, guar- is transparent – the buyer knows exactly ing impression in a unique auction, based anteed inventory, that doesn’t require hu- which app or site the ad will run on. With on the criteria of the individual whom will man intervention to run (non-RTB). Private Marketplaces, the general prem- see the ad. For example, when a user ise is to skip the exchanges altogether. engages and app and views an ad place- Under programmatic direct deals, a pub- ment, a live auction occurs where the ad- lisher’s sales rep may negotiate an ar- With Private Marketplaces your buying vertisers bid on the ad view based upon rangement with an advertiser that includes platform (DSP) plugs directly into the pre- the user’s habits and interests. Multiple top-tier inventory like home-page- take- mium publisher’s inventory source. The ad formats and quality in-app placements over ads at a fixed price for a guaranteed transaction is within an auction environ- are now available through programmatic number of impressions. ment but the terms of the deal are pre-ne- buying, including Rewarded Video, Inter- gotiated between the buyer and seller stitial Video and Static, and Playables. and the advertiser must be approved – so it is more manual than open exchanges.

6 CHARTBOOST POWER-UP REPORT DECEMBER 2017 MOBILE IS KING

7 CHARTBOOST POWER-UP REPORT DECEMBER 2017 Programmatic Ad Market

35B

30B rogrammatic has been adopted across Programmatic TV most formats and platforms but with mobile P 25B Audio specifically, we’re seeing dynamic growth. Mobile is where users are engaged and where they are Desktop Video 20B most likely to convert. Mobile Video

As we see in the chart, mobile video and 15B mobile display combined represents over 50% Mobile Display of programmatic spent in 2017. According to 10B eMarketer, 75% of all video dollars in the US will transact programmatically by 2018. 5B Desktop Display 0 2015 2016 2017

Source: IDC, December 2016

8 CHARTBOOST POWER-UP REPORT DECEMBER 2017 RESOLVING COMMON PROGRAMMATIC MISCONCEPTIONS: DESKTOP VS. MOBILE

uying inventory programmatically on mobile and Average time spend per day with mobile internet Average time spend per day with select media by US Adults, Bdesktop, at a basic level, are pretty much the among us mobile users, in-app vs. mobile web 2012-2018 2013-2018 same. Advertisers choose their audiences and define how much they will pay to reach that audience. 4:31 4:22 Media agencies then create the plan to target those 4:11 0:50 0:51 4:05 4:00 0:50 3:55 audiences across desktop and mobile. 0:50 0:51 3:15 3:23 3:06 In both the mobile web and desktop scenarios, the 0:50 2:53 2:37 DSP bids on a per-impression basis on behalf of the 2:16 advertisers and an SSP - whether it’s mobile, desk- 0:38 3:25 2:15 2:14 2:12 2:11 2:10 top, or cross-platform, offers up their inventory and 3:15 3:23 2:08 2:51 3:05 2:28 awards the impression to the highest bidder. 1:30 1:28 1:27 1:27 1:26 1:25 1:40

The process of buying media programmatically 0:35 0:32 0:30 0:28 0:27 0:26 changes when it comes to buying in-app inventory 2012 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 vs. mobile or desktop web inventory. In-app Mobile web TV* Mobile (nonvoice) Desktop/laptop** Radio* Print* To clarify, the common programmatic misconception Source: eMarketer, April 2016 Source: eMarketer, April 2016 isn’t buying desktop vs. mobile inventory; it’s actually buying mobile web vs. in-app inventory. This dis- tinction is important to understand because much “The common programmatic misconception isn’t of the growth happening in programmatic mobile is largely attributed to mobile apps. buying desktop vs. mobile inventory; it’s actually buying mobile web vs. in-app inventory.”

9 CHARTBOOST POWER-UP REPORT DECEMBER 2017 RESOLVING COMMON PROGRAMMATIC MISCONCEPTIONS: MOBILE WEB VS. IN-APP

hen we review the ways we can connect with mobile audiences, Wthere are 2 distinct approaches: mobile web and mobile app. The true difference between these two channels all comes down to viewability and data.

While mobile web still represents large volumes of traffic, the viewability of the ads is limited by the fact that the placements are hidden on the website content. Industry benchmarks say that overall viewability in the mobile web is 57%.

Mobile apps represent fully immersive contexts (users have close to full attention on the mobile content) and in the case of placing full- screen ads, the viewability levels are over 95%. The nature of the 2 approaches drives very different behaviors.

Mobile web captures user activity on browsers, searching for information or navigating websites, and it relies on expiring cookies to deliver this data. Cookies allow advertisers to identify that a unique visitor to their website is interesting, and then retarget them with relevant content as they browse their way through the mobile web.

10 CHARTBOOST POWER-UP REPORT DECEMBER 2017 THE IN-APP PROGRAMMATIC ADVANTAGE KEY IN-APP PROGRAMMATIC VENDOR FEATURES:

1 - Increase Efficiency in Media buying 3 -Eliminate Waste with Real-Time Buys • Impressions by app level data process Deliver hyper-relevant ads based on what’s happening around any particular customer with real-time bids. Com- • Impressions by device level data Cut-out room for human error. Scale media buys with ac- bine this geofencing or geolocation targeting to invite cess to multiple inventory sources, without compromis- shoppers into your storefront with limited offers and cou- • Global mobile SDK penetration ing on target relevance or quality. pons.

• Mobile-first ad formats: rewarded, playable, video, rich media 2 - Optimize Premium Media Inventory 4 - Target Audiences More Effectively • Real-time optimizations Reach your ideal customer while they’re on-the-go with Across Devices personalized ad creatives. Plus, get increased viewability and fraud detection for more cost-effective campaigns Mobile offers brand advertisers a new channel to target • Real-time campaign reporting across top in-app real estate. audiences previously identified in other channels (CRM, offline purchases, desktop, etc.) and combine 1st and 3rd party data to build richer audience segmentations. • Blacklist / Whitelist mobile app publishers • 3rd party analytics integration

11 CHARTBOOST POWER-UP REPORT DECEMBER 2017 IN-APP SDKs COLLECT THE DATA YOU NEED

Mobile apps collect persistent device IDs, not cookies. These identifiers, IDFAs (iOS) and Google Ad IDs (Android), are the basis for user targeting and tracking of conversions and post-install events. On top of that, mobile apps can collect the location, device type, operating sys- tem, connectivity, post-install actions, and number of times an ad has been shown. Apple IDFA and Google Ad IDs work across all apps and browsers on the device, while mobile and desktop web are limited to the information available during that user’s session on individual websites.

All this information is collected at the device level through an SDK, making the data easily accessible for advertisers or DSPs using device identifiers, which remain persistent throughout the entire sales funnel, to track conversions with precision.

12 CHARTBOOST POWER-UP REPORT DECEMBER 2017 REACH THE MOST ENGAGED MOBILE AUDIENCE AT SCALE

obile gaming is no longer a niche industry, it’s truly mainstream entertainment. In the U.S. Malone, over half the population is now gaming on-the-go with no signs of slowing. What’s a little less known is this audience is broad and highly engaged with significant disposable income (for more information, read the gaming audience report).

Here are some fun facts about the gaming app store category today:

• About 800,000 mobile games are offered on app stores • 75% of revenue generated from the iOS Apple App Store comes from mobile gaming • 62% Of smartphone owners install a game within a week of getting their phones • Users spend 43% of their mobile app time on games

All the above makes mobile gaming a huge distribution platform for marketers who want to establish their brand.

2.6 B 1.8 B 1.3 B 1.1 B

MOBILE GAMES FACEBOOK YOUTUBE GOOGLE

Sources: Search Engine Land, Fortune Lords, Social Media Hat, Applause.

13 CHARTBOOST POWER-UP REPORT DECEMBER 2017 DELIVER COMPELLING IN-APP CREATIVES

14 CHARTBOOST POWER-UP REPORT DECEMBER 2017 s we’ve seen gaming is a highly engaging context that absorbs a big part of Aeveryone’s time on their smartphones. That level of engagement, focus and interactivity requires marketers to think differently about the advertising formats they should use to connect with the in-game audience.

North America: Canada and US China

Video* Full-screen static Interactive Video* Full-screen static Interactive

Share of Voice 34% 42% 24% Share of Voice 42% 47% 11%

Conversions 3.25 1.34 2.85 Conversions 3.34 0.97 3.80

View Completion 80% View Completion 85%

CPM 15 4 10 CPM 7.5 2.7 1.5

Western Europe: UK, France & Germany Latam: Colombia, Brazil, Mexico

Video* Full-screen static Interactive Video* Full-screen static Interactive

Share of Voice 39% 45% 16% Share of Voice 43% 41% 16%

Conversions 2.65 1.04 2.61 Conversions 2.91 1.39 3.13

View Completion 82% View Completion 85%

CPM 10 2.5 6 CPM 2 1 1.5

* Video contains a blend of rewarded and interstitial formats. Share of Voice: Impression ratio out of the total number of impressions. Conversion: Number of installs per 1000 impressions. View Completion: Ratio of users who get to 95% of the video. CPM: Advertising spend per 1000 impressions.

15 CHARTBOOST POWER-UP REPORT DECEMBER 2017 VIDEO ADS

Among all ad formats, video is clearly the consolidated star. There’s an expla- nation to that: 15 or 30 seconds is the perfect amount of time for marketers to encapsulate their value proposition, resulting in deep understanding of the WHAT DOES OPT-IN advertised product. REALLY MEAN?

There’s a general misunderstanding about what opt-in (or rewarded) means. Some marketers are concerned to include rewarded video in their media plans because they associated with buying Pros: Cons: incentivized traffic. • Highly immersive format • Requires good user connectivity Here are few things that mobile advertisers should • Good conversion rates • Highly competitive/expensive • Opt-in video drives higher return • CPCV can make it difficult to stay know: within CPI target • The ads are always triggered by the user.

• The user gets a reward for watching the video.

Video has gone through some transformations since it became a de facto • Very high levels of engagement: on Chartboost, format for in-app. One of the most noticeable ones is that while it was born on completion rates for opt-in video are over 90%. landscape (with big detractors for its vertical form), the fact that users spend more than 90% of their time on their phones vertically, has driven the growth • This form of video presents the opportunity for of vertical video. On Chartboost we’ve seen vertical videos convert over 20% brands to make the ad more memorable and better than landscape videos when the user is interacting with the app on drive positive brand association. portrait.

Video can be found on interstitial placements (the ad pops up when the user gets to that placement) or opt-in (also called rewarded video)

16 CHARTBOOST POWER-UP REPORT DECEMBER 2017 INTERACTIVE/PLAYABLE ADS TIPS FROM: Interactive ads on mobile is in their early stages but are showing the signs of a rising star. While all the other ad units require a passive user behavior, Chartboost Creative Studio this ad format leverages all the capabilities of smartphones and their touch screen, making the ad experience more dynamic and enjoyable. Interactive ads are built using html5 and are displayed in a webview frame that is completely integrated in the app context. Gaming advertisers have naturally pioneered this ad unit (also called playable ads). At Chartboost, we are taking that creative knowledge from gaming to other verticals of the mobile landscape. Based on our experience, these are the most effective interactive ad experiences: Pros: Cons: • Highest engagement with brand • Higher production time & costs content • Technical complexity 1 - Mini Games who use gamification to transfer product features or brand- • Product features can be demoed • Specific format ed content into something playable. Depending on the app, several game in real mechanics can be used. Most common game mechanics are: • Suitable for any brand / product a. Puzzle / Match 3 b. Hidden Objects c. Slots / Wheel of Fortune d. Comparisons

2 - Animated Showcases, where the product is presented in a way that the user can interact with. That can be a 360 degree view of the product or a 3D model of the product who can be explored. Mostly used for physical products to see it from all sides.

3 - Interactive videos, with pre-recorded content and UI overlay. The user can interact with the video and see different chapter and have certain choices how the video is played out and ending.

17 CHARTBOOST POWER-UP REPORT DECEMBER 2017 STATIC ADS

Full-screen

Full-screen static (or Static Interstitial) are visu- Pros: Cons: als that cover the entire screen. They appear at key moments during the user journey (level • Large volumes, global footprint • It can be an intrusive format if achieved, main menu, …) and require a user ac- • Easy to produce used improperly tion: click button to close the ad or click on the • Good performance (CTR are • It is competitive in certain verti- call to action to go to the desired content. higher than 8%) cals

Banners

While banners are the least favorite ad format Pros: Cons: by players and game developers, they can still • Large volumes, global footprint • Small real estate to convey a serve a purpose. Banners drive big volumes, • Available on all screens value proposition generally covering 1/5th of the screen and be- • Cheapest format • “Banner blindness” syndrome ing displayed at the top or bottom. They also include a “call to action” button to convert clicks into actions (download, subscription, purchase, etc.). Click through rate (CTR) is generally between 0.8% to 1.5%.

18 CHARTBOOST POWER-UP REPORT DECEMBER 2017 CONCLUSION

Programmatic is here to stay, but that doesn’t mean advertisers Where is programmatic headed? are facing a doomsday scenario where robots are taking over the world. To dominate programmatic, and more specifically mobile Programmatic, in its broader sense, enables automation among many different platforms. While programmatic, there needs to be a balance between human today, most of the inventory is on mobile, TV and desktop, as users embrace new mobile platforms creativity and efficient reach at an affordable price. (like connected cars, Virtual Reality, Augmented Reality and Internet Of Things) we are expecting the ad automation to follow these new platforms. Mobile programmatic already represents over 50% of the total programmatic spend in 2017, and it’s only expected to grow. Smartphone have taken a central role in the lives of people, becoming a key support to work, communicate, shop, learn, PRESENT FUTURE inform ourselves and have fun. However, the user behavior is very different when they are on the mobile browsers versus in-app contexts. Marketers today, need to know the nuances between these behaviors so that they can establish their value proposition in an efficient way.

In-game context, specifically, has been the big unknown for brands, but as the face of gaming changes (becoming more ubiquitous, Internet of Smart TV Smart Phone Connected Cars diverse and high quality), marketers are starting to grasp the value Things of its audience, developing high quality ad creatives that attract the gamer interest.

Creatives are becoming more immersive, with video and interactive ads being at the top and we believe that these ad units that today dominate the gaming appsphere will conquer the other verticals in the future. Advertisers across industries realize that these formats are more effective when it comes to conveying their product or Augmented Virtual Smart Watch Laptop services and mobile publishers are realizing that there’s no reason Reality Reality why in-app advertising should go against user experience.

19 CHARTBOOST POWER-UP REPORT DECEMBER 2017 Chartboost Exchange Get Access to Premium Mobile In-App Inventory at Scale

Chartboost Exchange is a supply-side platform that gives agencies and demand partners direct programmatic access to premium in-app inventory across more than 300k SDK integrated apps worldwide. With transparent reporting and targeting controls, partners have the tools to acquire high value users at scale.

CONNECT WITH US

www.chartboost.com/ad-exchange

20 CHARTBOOST POWER-UP REPORT DECEMBER 2017