Programmatic monetization - 4 min read  - May 29, 2020

Core In-house Benefits for Programmatic Buying

To move programmatic technologies in-house is not a decision to be made lightly. Do the benefits outweigh the effort? Do publishers need to do it alone?

We prepared an overview of the major benefits that come with in-housing and what they mean for mobile businesses. This article is taken from BidMachine white paper New Approach to Programmatic in 2020: Towards Incremental Ad Revenue Increase.

Control over your data: transparency and security

With an in-house ad stack, you no longer share your data with multiple third-party companies and minimize the risk of your data being used for competitor’s advantage. Having control of your data is a major step towards understanding where your budget spend goes, which exact path it takes, what it results in, and how it affects your ad revenue.

Analyzing, optimizing, and relaunching is a habit much like everything else that a company does as part of its routine.

Publishers are afraid of the amount of resources they will have to spend on building teams to take care of the whole ad mediation cycle, however, they forget that big monopolies might do that work for them now, but with little consideration of publishers’ business goals and needs. Understandably, not every company that has several thousands of clients can have everyone’s best interests at heart.

The recent report, prepared by the Norwegian Consumer Council, outlines major problems that come with data shared with third parties and repercussions of violating GDPR rules.

As evident from one of the cases, a big monopoly mediation company was at the top of “cascading data sharing” by using complicated, unclear schemes and allowing its large network of partners to keep and manipulate user data. Even if a user decided to withdraw their consent from the company, their data would still be used by all the third parties with whom the information had already been shared. The situation led to a lawsuit directed at the client and not the mediation company.

Being in charge of your data also means that the paths between publishers and exchanges become visible and verifiable. Since publishers cannot always control how their inventory is being sold for the sake of a charged dollar by bigger ad exchanges, they miss out on direct deals and partnerships with clear expectations. 

In addition, fraud becomes less of an issue when a publisher can easily blacklist and whitelist IDs based on trackable activities they can see from start to finish. No restless appeals to a third-party support team with hours lost, waiting, and losing valuable impressions.

Building up data for supreme targeting

Not only will your data stay safe from being shared with unwanted parties, but new data will start to accumulate for sharper targeting and user acquisition. With their own user database, mobile app publishers will be able to reach the “right” people more efficiently and reduce the “bulk” targets. 

Moreover, this data accumulation can span monetization and user acquisition in one spot. For example, a customized business intelligence dashboard will allow working directly with real-time data insights and help facilitate decision-making.

This is an important factor since monetization and user acquisition are interconnected and greatly impact revenues. In the long run, this will save money that publishers can reinvest into more valuable users and their lookalikes.

Cutting out the middlemen

As big monopolies’ appetites continue to grow, the need for in-house ad stack comes to the forefront. It is now obvious that some big companies, who used to earn thanks to the ambiguity of “black box” auctions, feel rather threatened by various transparency specifications that keep popping up. In 2019 alone the industry began embracing app-ads.txt*, Supply Chain object*, and sellers.json*. All these transparency tools help build more direct relationships between publishers and advertisers, which is not very beneficial for some middlemen that charge up to 60% of publishers’ ad revenue.

The big middleman companies or monopolies in ad tech are commonly called “walled gardens”, because they essentially represent a closed system. For the most part, walled gardens rely on complicated payment models and lack of transparency. The current system is structured in such a way that it devours a percentage out of profit, which is unheard of in any other industry. 

The hidden mechanics walled gardens employ to conceal unjustified fees are numerous and keep blooming. It is staggering that the mobile industry continues allowing these unfair schemes to prosper. 

With technological advancement and tools at hand, it is possible for mobile app publishers to start the process going with clear goalposts and data points validating moves along the way.

Imagine that your CRM service provider took a percentage of your profits instead of offering a fixed rate. Since nothing is disclosed big ad tech companies may charge publishers up to 60% of publisher ad revenues. That means your cost increases as your business grows.

The opportunity to make direct deals with advertisers and make the most of cross-promotion with brands you prefer is a game-changer. When you can’t see determine whether your interests are met and respected, you can’t make an informed decision. So make sure you plan today to thrive in the future.

* app-ads.txt is a text file that provides a mechanism for publishers to openly declare their authorized digital sellers.

* Supply Chain object shows the supply path from the publisher to the advertiser with all reseller entities in-between.

* sellers.json file helps verify the app-ads.txt entries provided by the publisher.

Make programmatic count

If you’re interested in learning more about other aspects of moving programmatic ad tech in-house, stay tuned for our next articles in the blog and check out our website.  BidMachine offers solutions that allow moving ad technologies in-house gradually and at a lower cost.

To access the white paper New Approach to Programmatic in 2020: Towards Incremental Ad Revenue Increase in full, follow this link, or click on the banner below.

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