In 2022, the average person spent 6 hours and 57 minutes looking at a screen each day. People spent most of this time (3 hours and 43 minutes) on mobile devices (Comparitech, 2023).

A world of humans stuck to their smartphone screens creates a fruitful playing field where programmatic ad technology and digital advertisers work together to reach target audience channels.

This article discusses the intersection between mobile devices and programmatic ad platforms and how marketers can utilize this modern and effective method.

What is Programmatic Mobile Advertising?

Programmatic mobile advertising is precisely as it sounds: it is the intersection between programmatic advertising methods and mobile devices.

Broken down, it is a widespread, automated process that advertisers use to connect with ad space vendors and purchase mobile ad inventory for their campaigns. This entire process heavily relies on the target user – using mobile technology, real-time bidding, machine learning, and artificial intelligence.

How Big Is the Mobile Programmatic Market + What Does the Future Look Like?

Programmatic mobile advertising is attractive to marketers because there are over six billion active smartphone users worldwide. This number will grow to almost eight billion by 2027 (Statista).

Teams who decide to target mobile users are tapping into a massive global market, surpassing standard laptop and computer users.

Since programmatic mobile ads use real-time user data, they can accurately cater to niche customer identities.

Programmatic advertising trims the fat for marketing agencies who, in the past, had to negotiate deals with ad publishers and field ads to a general audience that may not be the correct target market.

Programmatic mobile advertising is faster, more innovative, and more efficient than traditional methods. Thus, broadening the reach of campaigns and maximizing ad spend. No wonder programmatic advertising has become a standard practice across industries.

How Does Programmatic Mobile Advertising Work?

Programmatic mobile ads use real-time bidding, which consists of five crucial elements:

Publishers: Website owners with ad space inventory to fill.

Supply-Side Platform (SSP): Programmatic platform that allows publishers to sell their ad space to advertisers.

Advertisers: The marketers who buy ad space to reach and notify potential customers about products and services.

Demand-Side Platform (DSP): Programmatic ad-buying platforms where advertisers buy ad space and navigate ad exchanges in real-time.

Ad Exchange: The digital marketplace where publishers field open ad spaces via SSPs and advertisers buy ad space via DSPs.

These five elements interact in a real-time bidding process. Publishers set up a supply-side platform connected to their website or mobile platform, while advertisers set up the demand-side platform.

When a user, in this case, a mobile user, clicks on a link to take them to the SSP-tagged website, the real-time bidding process initiates.

While the content is loading, the SSP immediately notifies the ad exchange, indicating that advertising space is available.

The ad exchange notifies the advertiser DSPs, which automatically analyzes the mobile user's behavioral data (tracked with cookies) and places bids on a cost-per-thousand impressions basis (CPM).

The DSP with the winning bid gets their ad fielded in the empty ad space that initially started the RTB process.

The process occurs in milliseconds, and it is constant. When users click on websites or scroll on mobile devices, advertisers analyze mobile data, bid on ad space, and try to get users to convert.

The Advantages of Programmatic Mobile Advertising

Data and Insights

Throughout the entire programmatic process, the platforms record different data points about the mobile user, including demographics, website history, and general consumer behavior. This data is analyzed via machine learning and provides the advertiser with actionable, predictive, and prescriptive insights to optimize their ad buying process.

Precise Targeting

The actionable insights from programmatic advertising platforms build a better picture of target customer identities. This data helps the platform navigate the correct channels and bid on ads fielded to more relevant customers.

Transparency

PMAs are more transparent because the programmatic platforms track everything. At any given moment, advertisers can see who saw the ad, how much the bid cost, and who converted.

For the user, past browsing behavior determines the programmatic ads they see. Although some feel this is a breach of privacy, many respond the opposite way and are happy to see ads based on their preferences.

Enhanced Revenue

The design of programmatic platforms maximizes revenue for both the advertiser and publisher. It is a win-win for both parties. The DSP only bids on the most relevant users, thus guaranteeing more conversions, while the SSP only fields the highest bidder's ad.

Bid costs are also relatively low, in the dollar-to-cent range, which is reasonable given the ROI.

User Acquisition

We have said it many times and will repeat it: programmatic ads hit the right people at the right time. Pair this with a massive market of mobile users, and marketers and advertisers have a better chance than ever to boost user coverage.

Automation in Mobile Programmatic Advertising

Automation is the biggest asset of programmatic mobile advertising. As mentioned, in the past, advertisers manually connected and negotiated with ad inventory sellers to field their ads. This process took time and money, and resources.

Programmatic ads, ultimately, render this former model obsolete. Specifically for mobile programmatic ads, almost every element is automated, including DSPs, SSPs, APIs, ad auctions, and ad insertion. These days, advertisers can even automate data reports and audience optimization.

Programmatic technology can eliminate hours of inefficient, manual labor that doesn't guarantee results—shifting the marketing team to more of an oversight role. Marketers must still provide target audience data, campaign goals, key performance indicators, media, and review results.

Getting Started With Mobile Programmatic Advertising

Choosing the right DSP for mobile programmatic ads takes time and research. Teams should look at market data to identify effective DSPs to adopt.

When assessing mobile DSPs, advertisers should consider inventory availability, access to customer service, average bidding prices, software requirements, AI/machine learning capacity, and the mobile format options of the DSP.

DSPs must provide a complete, programmatic mobile service. Some media planning tools are fully programmatic, but their functionality may need to be improved.

Best Practices for Programmatic Mobile Campaigns

Be Engaging

Mobile users typically view an ad for less than five seconds, meaning wordy, static, and unattractive traditional ads won't cut it. When running programmatic ads, the media content must be super engaging. The engagement factor may be in the message content, media format, or ad design.

Understand Audience Personas

Billions of people own a smartphone. However, they reside on different websites or channels. So, advertisers who succeed in mobile programmatic ads take time to nail down their target audience to help the programmatic platform better serve relevant ads to potential customers.

Geography

Programmatic mobile ads extend the reach of campaigns to target segments across different geographical regions. However, teams running programmatic mobile must remember that users in other parts of the world utilize different mobile platforms and media channels. For example, in the U.S., we commonly communicate via iMessage or the messenger feature on Samsung phones. In comparison, much of the rest of the world uses WhatsApp. So, it is imperative to research consumer behavior and platforms in the campaign's top target geos.

Optimize

Advertisers should constantly review campaign results and optimize. This doesn't have to be strenuous. At the end of the day, if the marketer takes a few hours a week to run and test campaigns, analyze insights, and pivot in a better direction, they are optimizing!

Overcoming Challenges In Programmatic Mobile Advertising Campaigns

Ad formats

Ads need to be dynamic and engaging to the audience. They must also be within the correct dimensions, file format, color space, etc.

This process requires some trial and error, which may slow results. However, as advertisements change and develop their content, they will begin to see better results. It is also an excellent choice to outsource the media creation partner.

Fraud

Programmatic advertising platforms do run the risk of fraud. Bots and malware can fake ad impressions and steal information or even money. To avoid this, many advertisers utilize an anti-fraud extension.

Tech Challenge

Switching ad execution over to a programmatic platform comes with a learning curve.

Luckily, the design of programmatic platforms is intuitive and guides marketers through the entire process. In addition, many resources and partner services are available to help teams run better campaigns.

Is Mobile the Best Fit?

Some campaigns may only reap a few benefits from programmatic mobile ads. The messaging could be off, or target segments might reside outside the specific mobile channels.

If this is the case, advertisers should not wholly dismiss programmatic ads. They may want to explore other ad types like video, audio, or out-of-home advertising.

Questions With an Expert

In your own words, how would you describe programmatic mobile advertising?

Programmatic mobile is when we target users with programmatic ads on their mobile devices. Mobile inventory is just one of many device options on programmatic campaigns. Other devices include PC, tablets, TV, etc. Mobile has a lot of inventory and can often come at a cheaper cost! Targeting mobile devices is just one piece of the programmatic puzzle, but some campaigns call for exclusive mobile targeting.

What are the best practices for advertising on mobile devices?

Pulling a device report is a very common practice at Pathlabs. We let the data tell us which devices perform the best, and then we can increase or decrease our bids based on the findings.

In Conclusion,

The last decade has ushered in a mobile era, and billions have become inseparable from their phones. As the utility of these devices continues to grow, so does programmatic mobile advertising and its benefits.

Although a society attached to mobile devices has pros and cons, it is a welcoming environment for advertisers to connect with users more effectively.

Diving into programmatic mobile advertising is a brave step into the future of digital marketing and this new form of automated advertising.

For those still on the fence, consider reaching out to Pathlabs to see how we can help meet your programmatic mobile needs.

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