Twitter's MoPub starts testing version of in-app header bidding

Brief:

MoPub, a Twitter-owned mobile ad exchange, is testing an ad sales system to replace the app ads waterfall — a method of selling ad inventory to maximize the pricing and sell-through rate — with a unified auction, per AdExchanger. About a dozen publishers are testing the MoPub Advanced Bidding solution, the company’s answer to header bidding for mobile apps, MoPub head of product Boris Logvinsky said in a blog post.
The test lets a publisher send an ad request to the MoPub platform, whose Advanced Bidding runs a unified auction among network bidders and demand-side platforms (DSPs) that evaluates all bids in real-time and picks the highest bidder. The winning bid sends the ad content to the publisher in real-time, and the ad network bidding SDK renders the ad creative.
The process also reduces delays in showing the app that’s seen in a waterfall setup, which lets publishers pass their impressions down the chain of bidders until they find a buyer. MoPub’s test doesn’t have a set end date, AdExchanger reported.

Insight:

Header bidding continues to a growing tactic but has presented challenges in the mobile app space. This could start to change in 2018, with news of MoPub's test following closely on the heels of inMobi's acquisition last week of AerServ for $90 million, a move viewed as a bid to gain a foothold in in-app header bidding.

Mobile app publishers have faced limited access to real-time demand, similar to the challenges of desktop content producers in years past. Apps add an additional layer of complexity not seen for desktop, where publishers can add wrappers to headers for improved ad delivery.

Because there isn’t a header in an app, publishers need to integrate a buyer’s third-party software development kit to render mobile-specific creative formats such as rewarded video or playables. To be more effective, an in-app auction needs to include ad networks, which usually don’t compete in real time for ad inventory and rely on prices that are based on historical performance. While mediation platforms help to improve pricing, publishers still miss out when a demand partner that is willing to pay more for an ad placement ends up further down the waterfall.

MoPub is well positioned to oversee a unified auction, given its existing relationships with publishers and demand-side platform integrations. MoPub now needs to focus on getting ad networks onto its platform to boost revenue from real-time bidding. Ad networks are becoming more aware that they’re missing out on improved ad placements by relying on mediation. “Ad networks are starting to realize that by not bidding in real time, they’re not seeing valuable impression opportunities,” Logvinskiy told AdExchanger. “They’re realizing that they could be driving better performance for their clients.”