Location Is Everything: Talking Mobile Programmatic With Avazu’s Yi Shi

Beacons and the Potential for Mobile Web

Location, location, location is not just the mantra of real estate agents anymore. The ability to reach your audience where you want to reach them – and hopefully when they want to be reached – has long been a top perk for advertising on mobile. Of course, hyper-localized targeting sounds grand in theory, but bringing it to life and scale has been a long slog. This slog has become easier to manage thanks to programmatic’s spread throughout the mobile ecosystem.

Localization has been a cornerstone in mobile DSP Avazu’s strategy since it refocused completely to mobile. And what a proving ground the company has had to develop its strategy: the burgeoning smartphone wonderland of the Asia-Pacific region, where hyper-local targeting is a necessity for advertisers both large and small.

Recently named one of the top 5 DSPs in revenue share on mobile exchange Smaato for the second quarter in a row, Avazu has its sights on global expansion, opening branches in Amsterdam, Berlin and Los Angeles. I spoke to Avazu CEO and Founder Yi Shi about how the company will use its APAC upbringing to its advantage in tackling new markets, how technology like beacons is transforming location-based advertising, the potential for mobile web inventory and much more.


Are there certain insights you’ve learned in the APAC market that you think will prove advantageous in markets like North America?

Asian advertisers from India and China have spent a lot of money in the past on mobile, when we look at the top 10 most popular apps in the world, more than 30% are coming from China. We’ve served all those clients very closely with local operation teams to gain deep insights into their campaign strategies – this I think will indeed help us penetrate new markets.

For example, we found it extremely valuable to see how a newly launched app could gain over 10 million users within the first two weeks of release using our solutions. That kind of scale can be only seen in fast evolving emerging markets.

What made Avazu to pivot towards mobile in 2012?

Avazu started its performance advertising business on a global scale in 2009 and in 2012 we saw that the future demand is clearly shifting to mobile. So we moved all our resources into mobile to create a unique advertising platform. We started with opening offices in different countries in 2013 to achieve a better level of localization.

What are the key factors driving spend toward mobile programmatic – targeting, pricing? Are smaller advertisers more interested in the space than large brands?

So far we have seen a big portion of advertisers coming from the performance space (gaming and app downloads) to our platform, so for them a comprehensive bundle of efficient campaign management tools is the key factor driving spend.

However, with the development of new ad formats like native ads and location-based ads, we are also seeing significant demand coming from large brands. We created a self-service platform with 100% transparency and control down to the placement level, which gives large brands more confidence in the campaigns they run with us.

One advantage on mobile – so much data and so many targeting parameters! Are there combinations of mobile targeting parameters your clients find particularly successful?

We have seen a great deal of success with hyperlocal targeting, where advertisers can target users from a certain GPS location circle. For example, a local restaurant could target all users within a 50 meter radius of its restaurant’s GPS location to find their target audience. Other targeting options are phone device, brand, operation system, app/site, and ISP/carriers, which are particularly useful for performance advertisers.

What are other ways advertisers take advantage of location targeting that have impressed you?

We are seeing campaigns that combine location-based ads with loyalty programs, offering recurring customers targeted vouchers. That’s a great example of leveraging mobile advertising effectiveness from the online world to the offline world.

Has Avazu leapt into the world of beacons? How will that space grow?

We are currently looking into this field and believe it will lure more budgets from retailers and offline world to online. Product-wise, we are integrating it with our hyperlocal targeting to create a competitive, but user-friendly solution, particularly for advertisers that are not too familiar with mobile advertising.

Are advertisers interested in mobile private exchanges?

Mobile private exchange are clearly a hot thing right now and will remain hot in the future – however, it’s more a tool designed for ad networks and agencies in my opinion. Advertisers tend to use simplified solutions, as their ad ops typically are not that sophisticated in terms platform management. A private exchange is complex to manage.

Non-human traffic has been a huge concern in the US and Europe of late. How does a tech company like you ensure clients inventory bought is being seen by humans?

We have a set of methodologies to pre-filter non-human traffic, this starts with manual audits of traffic sources and placements, then combined with blacklists from certified third-party vendors and inhouse data. In addition, we apply machine learning algorithms to discover irregularities within traffic patterns.

Apps or mobile web – which is the best way to reach consumers currently, and why? Will one side be more popular for advertisers in the long term?

Somewhere between 70% to 80% of mobile inventory still comes from apps, and advertisers achieve significantly larger scale there compared to the mobile web. However, we think that mobile web inventory is under-valued and overlooked by most media agencies and advertisers. A media buyer could reach the same user on mobile web just like on an app, just at a lower bid price.

We were exploring this phenomenon and found out that the IAB mobile creative sizes are still dominating mobile demand, while mobile web typically work with desktop creative sizes. However, if an advertiser’s website isn’t fully optimized for phones and tablets, mobile web inventory usually won’t work at all, thus diminishing demand.