A recent survey by InMobi, a unified marketing cloud for mobile, revealed that many app publishers and developers still use legacy monetization methods—primarily waterfalls—to determine ad prices and eCPMs.
Waterfalls create latency that can slow ad-loading time, presenting a missed opportunity for app owners trying to monetize.
Thirty percent of respondents to the InMobi survey indicated that it takes about two seconds or longer for an ad to load, while another 20% indicated it takes 1-2 seconds.
In a fast-moving mobile environment, 2 seconds can mean the difference between a user seeing an ad or not.
ClickZ recently spoke with Mike Brooks, WeatherBug’s SVP of Revenue and Anne Frisbie, SVP of Global Brand and Programmatic at InMobi, to learn how WeatherBug works with InMobi to better monetize their app using InMobi’s unified auction (UA) model instead of the traditional waterfall method of bidding.
InMobi has focused on the mobile in-app space for the last twelve years. One of the big pieces of InMobi technology is their supply-side platform.
Says Frisbie, “The supply-side platform is what app developers like WeatherBug use to monetize in-app inventory. We run InMobi exchange off that supply-side platform. It’s is one of the largest in-app mobile exchanges for brand advertisers, particularly around video.”
InMobi offers a full suite of mobile ad products including InMobi Pulse, a market research and insights platform and InMobi DSP which is focused on managed service performance.
“We’ve built out a broad set of ad technologies, but our work with WeatherBug is focused on the supply-side platform and InMobi Exchange,” explains Frisbie.
Mike Brooks has been the Chief Revenue Officer at WeatherBug for a little over a year and a half. Prior to that, he was the first hire on the mobile team at AOL where his job required him to understand how app advertisers worked with ad networks.
Says Brooks, “I worked the Ubers and Candy Crushes to help them understand how to grow the demand side of their business and get more users.”
At WeatherBug, Brooks has a dual CRO and CMO role. In addition to monetizing the app, he also deploys all of WeatherBug’s advertising.
WeatherBug has 14 million active users, the vast majority of that is in the mobile app. They have 11-12 million monthly active users on the app side with the remainder on the web side.
“When we think about how we make money, the vast majority is mobile app programmatic advertising,” explains Brooks. “This is 85% of our revenue every year, so it’s something we have to get right. To this end, InMobi has had a positive impact on our business and the way we think about advertising as a whole,” says Brooks.
There’s been a big shift toward the non-reserve auction in digital advertising.
This is a change from the early days of online advertising when websites had direct sales teams that monetized 60% of the ad inventory, but the other 40% went unsold.
As that evolved, the unsold portion became a larger and more valuable chunk.
Says Brooks, “The demand side (e.g., ad buying) has evolved really fast. The supply side was always a half-step behind when it came to auction dynamics.”
Brooks went on to summarize some of the changes that have impacted the supply-side of ad buying.
“Up until about a year ago, a web site or mobile app that wanted show ads and run an auction had to use what was called a waterfall,” explains Brooks. “You had several partners—roughly 4 to 20—and you’d speak with them every month to set eCPMs and volume expectations. You set one price point and forget it, then you go through a waterfall for every impression.”
In a waterfall bidding model, the ad server serves up an ad to the first demand partner—let’s say that’s Google.
Then if Google doesn’t want the impression, it goes to the next demand partner for a lower price, and so on down the line.
“That’s how things evolved in a world where you didn’t monetize any of your unsold inventory, to one where you can use multiple sources to sell inventory, even if those sources aren’t not optimized,” explains Brooks.
Unified auctioning aims to make the auction more optimized and fairer on the publisher side. Now, instead of a waterfall approach, they are offering a unified auction model. With a unified auction, all demand partners are asked simultaneously if they want the impression.
When InMobi first proposed this new technology, Brooks’ team came up with two hypotheses about how it would impact revenue for WeatherBug.
“The higher CPM hypothesis was true,” says Brooks. “When we moved demand partners from a waterfall placement to a unified auction placement, the CPMs from that partner increased about 15%.”
WeatherBug is also able to test partners faster using the UA model. They test about 8 to 10 times faster now that they don’t require SDK integrations. This enables them to find more partners that are a good fit.
WeatherBug’s decreased latency theory also proved to be true. When moving to a UA, the time it took to serve an ad decreased by 44% and they were able to remove six SDKs.
WeatherBug can now serve ads a lot faster with less wasted impressions because of this technology.
Says Brooks, “I’m a big fan of unified auctions. The work we did early on with InMobi helped us define what is our programmatic strategy for the next few years when it comes to monetization.”
WeatherBug has a small direct sales team that works with brands who want to run ads on their app or website.
From a non-reserve monetization perspective, they rely on partners like InMobi, Verizon Media, Amazon and others to sell their non-reserve inventory.
“When we don’t sell an ad directly, we want to make that ad space available to technology that can help people buy those ads. Today we can match advertisers with our demand partners much more efficiently.”
InMobi helps WeatherBug surface the ad to all potential buyers.
“On the supply side, a unified auction is great because many buyers are utilizing audience targeting,” explains Frisbie. “They may really want that impression, but they may not be seeing it because they were in the second or third waterfall. With a unified auction, they get to see all the users and use their first party or InMobi audiences to buy across WeatherBug. It’s very beneficial to the buyer.”
WeatherBug took a gradual approach when switching from a waterfall to a unified auction.
“The first thing we did, was to take the unified auction and put it into our existing waterfall,” says Brooks. “We had our existing waterfall, but in one of those placements we put this header. Then we took some of the partners that we had connected directly into the waterfall, removed their SDKs and connected them via InMobi.”
Since WeatherBug implemented the unified auction approach over the past year and a half, they’ve seen an overall business lift of about 20%.
When considering the switch from a waterfall to a unified auction approach, Brooks recommends taking small, measurable steps, but make sure you’re doing business the way you want to do business as a publisher.
Says Brooks, “We know there’s a ton of money in the banana stand because we’ve already found a lot of it. My biggest advice to publishers is that you need to understand your own house before you understand where the money is.”
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