In the old days of mobile advertising – pre-2011 – the sector was really easy to understand. You had publishers. You had advertisers. And you had networks, like AdMob. Networks provided both publishers and advertisers with the scale to make an efficient market.
And then suddenly we saw the rise of complexity in the value chain, with the rise of the Demand Side Platforms and Supply Side Platforms and various hybrids of the two. With this came Programatic Buying, where mobile ads were purchased by computers using increasingly sophisticated algorithms. In turn, this allowed Real Time Bidding (RTB) to emerge as a potent force.
RTB, in layman’s language, works like this. The consumer clicks on a link to a mobile web page, which triggers a request from the publisher to an Ad Exchange to provide an ad. The Exchange, in turn, sends out requests to multiple sources to supply the ad and asks those sources to bid to supply it, at the same time. The highest bid wins – simple as that. This not only happens instantly and in Real Time, but millions of such requests are handled simultaneously.
It’s clear that this is the future for mobile advertising, as the efficiencies of the system push more and more publishers and more and more advertisers into this direction. Today, latest information from the excellent eMarketer seems to indicate that this market is expanding fast and that tablets as well as mobile handsets have joined the RTB ecosystem.
Watch this space.