AppNexus Summit: Mobile Programmatic Crawls Forward, Creative Next Big Issue

At its San Francisco summit earlier this year, AppNexus used a slide chock full of poker chips to announce the technology platform was going “all in” on mobile. A gambling reference was an interesting choice – in the hazy world of mobile monetization is programmatic (namely RTB-driven) trading a good bet?

The smart money is leaning toward yes, but the bet is more complicated than just laying all your chips on the table. AppNexus announced the general availability of mobile buying on its platform, but that’s only one of several moves the company detailed at its most recent summit this week in New York.

Rather than the “year of mobile,” I’d argue 2013 has been the year of looming Mobegeddon (h/t Zemanta President Todd Sawicki). Publishers are seeing sharp spikes in mobile traffic cut into desktop; on mobile devices, they end up delivering less display ads that are less effective (unless you consider CTR due to stubby fingers a quality metric) at a lower price. The picture is not all that great for advertisers either – tiny display ads are viewed by consumers as even more annoying than other forms of advertising. Performance? HA! 

Also, I’ve seen plenty of shady “One Weird Trick!” ads delivered on my smartphone – I’m almost having flashbacks to the (old) MySpace era. (The reign of Tom vs. the age of JT?)

Problem is there’s no stopping the consumer tide – in the instant access age, they’re going to turn to the Internet-connected device most readily available. Who cares whether the ads are good on the tiny screen, or whether they’re less of them? The latter is a good thing, right?

Not for publishers, and therefore not for big ol’ technology platforms like AppNexus. 

Roundly praised for building up a mighty desktop-based programmatic biz, jumping into the shark-infested ocean of mobile appeared a daunting challenge. President and co-founder Brian O’Kelley even joked at the AppNexus summit that he personally had been trying to talk people on the street out of using their mobile phones for browsing. I can only imagine this kind of situation on the streets:

O’KELLEY: You don’t really need to look that up right now – you’re probably close to your house, with your desktop browser that knows and understands you thanks to the magic of cookies.

PEDESTRIAN: Do I know you?

O’KELLEY: C’mon, I’ll lead you to an Internet café down the street – they have vintage iMacs!

PEDESTRIAN: My taser is at full charge, buddy.

In the words of former British Prime Minister Harold Wilson, “He who rejects change is the architect of decay. The only human institution which rejects progress is the cemetery.” And the ad tech institutions that reject change are headed to the LUMAscape graveyard, getting more and more populated by the year.

“We consider mobile to be the real digital,” commented Millennial Media CEO Paul Palmieri. “It’s a short matter of time before desktop is traditional media.” (Is there any bigger burn in ad tech than to hear your media channel is “traditional”? Who’s getting disrupted now?) He even suggested that PC-served ads will be a sideshow in the long term.

Unfortunately, we’re in that ugly transitional time, though it’s getting less hideous all the time, particularly with programmatic prowess. It’s been argued that the best format for mobile is native/content marketing – BuzzFeed has shown native’s effectiveness. When it comes to direct sold, media operations like NPR and Vox Media have developed eye-catching, HTML-5 enabled creative in-house that actually works across platforms.

But the issue is scale – custom creative takes time to build, reducing how much you can spread across the plethora of mobile inventory before running into frequency issues. Mobile video is also proving promising, but you run into scale issues again.

What says scale like programmatic? The piping is getting firmer – Millennial’s MMX exchange is built on top of AppNexus’ platform, through which 6 billion impressions flow daily. But the real appeal to programmatic – namely RTB-driven tech – is targeting, and the adoption of device IDs and probabilistic identifiers has opened up a variety of targeting options. Audience and location, together? In the words of Eric Cartman, “SWEEEEEEET.”

Though there were some sneers over Millennial’s acquisition of JumpTap, Palmieri noted the latter was a big buyer of mobile inventory – having that technology in-house gives Millennial a better idea of what buyers are seeking. He also noted JumpTap’s programmatic buying prowess, including 35 million deduped mobile profiles.

But we still have that issue of crappy, tiny ads that users don’t register as anything but irritating. Xaxis – which is not an agency trading desk, how dare you call it that! It’s a programmatic buying platform, damn you – has a workaround for the accidental clicks which it calls the “Fat Finger” solution. (By the way, my fingers are not fat; they’re just big-boned.) When a consumer taps on a display ad, he or she is prompted to say whether they actually meant to click that ad.

I guess that’s a start to enabling better mobile creative traded programmatically, but the onus here really seems to be on the agencies as the trading platforms have can support rich media, video interstitials and other engaging units. The theory is that advertisers are still adjusting to the idea of mobile as an extension of desktop media – treated as a silo like social, it was easier for brand advertisers to wrap their head around strategy (e.g., branded apps). Xaxis CEO Brian Lesser suggested that creative will improve as advertisers better understand mobile audiences.

It seems the data is out there to inform them… But then we’ll have to discuss the sad state of mobile metrics, which is about to get messier as Nielsen readies its mobile product. One hurdle at a time.