Programmatic buying and selling is the hottest trend in the ad industry these days. The process involves publishers sending as much of their inventory to advertisers with as much transparency as possible (device ID, site, app, etc.), and then allowing the advertiser to determine what they want to buy and in many cases bid any price rather than buying at a set price. The traditional process typically involves an agreement and set price between a publisher and advertiser. The new programmatic approach gives advertisers more control over what they buy while allowing publishers to potentially sell more of their inventory by making it all available.
The benefits of programmatic do not need to be debated, it has been proven to be widely successful on desktop, but on mobile it is still in its infancy and experiencing growing pains. Article after article is being published touting the benefits of mobile programmatic and publishers are adopting it without realizing the demand to back it up might not be available yet.
Mobile programmatic display ads appear to have a much higher adoption rate by advertisers at this point. There is a lot of demand available and if a publisher plugs into a mobile display programmatic environment there is a good chance they can sell a good amount of their inventory. Of course the more well known and premium the brand of the site or app the greater the chances that they will receive a higher fill rate.
Mobile programmatic buying of video still has a ways to go though to catch up to display. The amount of mobile video inventory is still significantly less compared to display and while it increasing, the truth is it is still very limited. The majority of the mobile video inventory that is available is being displayed on large sites like YouTube and Facebook and premium mobile properties. On top of that, some of the remaining mobile video is sold through private marketplaces which typically involve a private relationship between one or a few partners. That leaves a small piece of the mobile video pie for the rest of the publishers to fight for.
Further dampening the landscape is the fact that when pressed most mobile programmatic video buyers will admit that they only buy 1% – 5% of the total inventory they are sent. In essence, they are looking for the user who is the needle in the haystack to retarget or they know has performed or converted well in the past. So if there is a limited supply of mobile video inventory and programmatic buyers are buying 1-5% of it on average, invariably many publishers are bound to experience a low fill rate with their mobile video supply purchased programmatically.
This scenario will improve as more and more mobile video inventory becomes available and the mobile programmatic environment evolves, but publishers should be aware of the current state of the industry so they have realistic expectations when selling programmatically. Programmatic buying is where the industry is moving and the benefits are undeniable, but the mobile programmatic environment still has a ways to go.