The Future of Ad Monetization

Panel discussion with Google, Kolibri Games, LoopMe, and Digital Turbine at Gamescom

During Gamescom in Cologne this August, Digital Turbine hosted an intimate event for app developers to connect and discuss current challenges in ad monetization. Though some of the insights were shared off the records, we are excited to bring the main discussion takeaways on what the future holds for mobile ad monetization. Learn how header bidding is similar to restaurant service, what stops brands from buying your mobile app users, and why adapting, diversifying, and testing are the main focus areas that should be on every developer's radar.

What's on Everyone's Mind This Year?

The shift to bidding would be the first on the list. More and more publishers are testing bidding to increase their efficiency and get more control over what they sell, how, and to whom, with a hybrid setup now being popular. New bidders are coming to market, and there is a large adoption of bidders by the demand partners, with some moving campaigns and adjusting algorithms to bidding only - all this makes it a massive change for an industry, impacting publishers, buyers, and ad service providers.

Brand advertising expansion to mobile and the connected current challenge - a wide CMP adoption in a mobile landscape - contribute to the industry steadily moving to a consistent privacy-complaint ecosystem. There is a strong need for the mobile gaming industry as a whole to adapt to privacy and regulatory changes in mobile ads.

Even though government regulators and the industry giants lead the way through the current transition period toward a privacy-compliant ecosystem, the historical perception of the in-game inventory and lack of proper consent management stop brand buyers from shifting budgets towards mobile ads.

360-Degree View of the Mobile Market Shift to Bidding: From Publisher to Bidder to Buyer

Whether you are a pro or have just started your first A/B test, bidding is a hot topic with new questions popping up as its adoption increases on the buyers', publishers', and networks' sides.

One of the most important concerns is what revenue impact publishers should expect when switching to bidding. With their recent Google bidding open beta announcement, Denise Farrelly, Head of Apps & Gaming EMEA Partnerships at Google, caveats that switching to bidding does not necessarily lead to more revenue instantly, so it’s important for publishers to test for at least 14 days

While revenue may stay the same, publishers like Kolibri Games benefit from the transparency, fair auctions, and efficiency offered by bidding. It also allows more time for optimization and reduces ad latency, which has an impact on IMP/DAU as ads are served to users more quickly.

Though bidding is taking over the industry for the mentioned reasons, publishers usually utilize it in a hybrid setup, which is also the case for Kolibri Games.

Moreover, Denise emphasizes the importance of publishers utilizing a hybrid setup in bidding. Even though Google Ads buying will transition primarily to bidding in the next quarter, there are many others that continue buying through waterfalls.

When it comes to testing and implementing bidding, Paul and Denise both suggested not to do it by geo. Going global will ease the process and minimize the impact on different regions. After that, it’s advised to implement bidding on 100% of inventory wherever the A/B test was positive.

The widespread adoption of bidding also helps brands find the right audience. Helene Bouteille, Head of Global Supply at LoopMe, confirms that there is definitely a need for more of this inventory. Brand buyers might contribute to eCPM growth as their algorithms buy more on those apps that consistently send more ad requests.

Those Three Little Words - Consent Management Platform

Bearing in mind GDPR was introduced back in 2018, CMP adoption has now become crucial. Why is that?

With the new EEA and UK laws, regulations on the mobile user privacy landscape are changing. Google’s goal is to be a facilitator of this change, rather than to simply enforce it. Their aim, Denise said, is to standardize the CMP integration process, making it easier for publishers and promoting the health of the entire mobile ecosystem.

Helene emphasizes that brands are moving towards in-app advertising, challenging the adoption of CMPs in a mobile app landscape. Keeping in mind that brands need to buy a specific audience rather than installs, CMP adoption enables publishers to effectively serve targeted ads and open their inventory to more brand campaigns, ensuring better user ad experience.

Since the beginning of the GDPR era, the publisher’s credo was “the later you move, the less you lose.” Now, with increasing pressure from regulators on mobile environment and user privacy, as well as brand expansion to in-app ads, Paul reasonably calls out that the industry has to move together. Publishers must test and implement CMPs at the same time to minimize the business impact, give consistent experience for users and advertisers, and ensure a fair competition for publishers.

In Denise’s words, the consistent approach to user consent will also determine how buyers buy, what audiences, and at what prices.

Even though it definitely takes time and resources to test different CMPs and implement one (Paul compares it to the rollout of the new game feature), the publishers must adapt to privacy and regulatory changes. There’s no more time for waiting, the time to move is now.

Whether you develop your own or browse through available products in the market, your chosen CMP has to be certified by IAB and work on TCF2.2 protocol. That’s the minimum requirement.

To make sure your app is eligible for 100% of Google buyers - for personalized ads, non-personalized ads, and limited ads - the CMP must also be certified by Google.