Mobile ad spending rises 29% on video growth, study says

Brief:

Mobile ad spending rose 29% in Q1 from a year earlier on the growth of mobile video ads, according to a quarterly report that sell-side platform PubMatic shared with Mobile Marketer. The company forecasts that mobile devices will be the preferred platform for video ad placement, overtaking desktop platforms, by the end of this year as high-speed 5G networks support growth.
In-app header bidding, which lets marketers bid for remnant mobile ad inventory in digital auctions, has surged 12-fold in the past year as digital publishers adopt the technology. That growth exceeded the 80% jump for header bidding on the mobile web and 46% increase for desktop ads in Q1 from year earlier, per PubMatic.
Ad placements through in-app private marketplaces (PMPs), which restrict ad auctions to a limited number of approved media buyers, boosted their impressions by 51% in Q1 as advertisers grew more concerned about ad fraud. PMP impressions on Android devices surged 58%, compared with 31% for iOS, after an ad-fraud scheme targeting apps from the Google Play store was exposed last year, per PubMatic. A sell-side platform (SSP) aims to get the highest bids for the ad inventory of digital publishers in programmatic auctions.

Insight:

PubMatic, whose analysis consists of crunching the numbers on more than 13 trillion advertiser bids on its platform per month, confirms other reports that show significant growth of video ads on mobile platforms. 5G networks that will greatly speed up the download times for video content are currently available in a handful of U.S. cities, but the country’s wireless carriers have ambitious plans to extend coverage nationwide over the next couple of years. Video is forecast to grow its share of mobile data traffic to 74% by 2024 from 60% last year, per an estimate by telecom equipment maker Ericsson.

PubMatic’s report also shows that in-app header bidding is replacing the "waterfall" method of selling remnant ad inventory through programmatic ad networks in a descending order of importance. Unfortunately, this method of dynamic ad placement can slow down ad delivery and impair the user experience. In-app header bidding is seen as more efficient, but only 22% of publishers said they understood the technology, per a study cited by MediaPost. PubMatic’s research suggests that in-app header bidding is gaining traction as more publishers adopt the method of selling ad inventory.

Media reports exposing mobile ad-fraud schemes have raised awareness among marketers that their ad buys are vulnerable to sophisticated forms of chicanery. The number of fraudulent apps surged by 159% in 2018 from the prior year, per marketing measurement firm DoubleVerify. The IAB Tech Lab has worked to tackle mobile ad fraud by harnessing the collective expertise of technicians from cellular service providers, brands, ad agencies and programmatic ad platforms. In March, the group released the final version of its app-ads.txt specification for implementation among mobile ad platforms, and PubMatic began enforcing the standard soon after. As more apps adopt the standard, invalid traffic (IVT) rates likely will decline.