Reviewing the Mobile ad landscape and the future of programmatic advertising
Simon Swan's Digital Marketing Essentials interview with Luke Jonas of Hatch London
I caught up with Luke Jonas a specialist in programmatic advertising and performance marketing. He previously worked at mobile advertising technology platform and is a co-founder of Hatch London, an agency that help businesses build and upskill their digital performance marketing teams.
Luke has a wealth of experience across the digital sphere working for start-ups as well as for leading affiliate networks, and discussed with me how the rapid change in the mobile landscape the changing technologies, and the rise in programmatic advertising and the changes in advertisers looking to take media buying in-house.
Q1. You’ve worked in the mobile advertising space, can you let us know your thoughts on the opportunities in the future and how mobile will look to drive more spend onto their platforms?
I have worked in Mobile advertising since 2012 when I started at Flurry. Flurry was, and still is the most commonly used in-app analytics product, this gave me an incredibly broad view of the market as we were tracking almost all smartphones. It also meant that I had the opportunity to forge relationships with some of the most important developers in the business.
The biggest change I have seen over the last 2.5 years is the way in which people market their apps. When I entered this market it was all about ‘ranking’; buying large install volumes in short periods of time to influence your rank position in the iOS charts so that organic users see your app and download it.
It was a rather crude method to say the least, but when the tech isn’t there to optimize, it was the only way. Ranking strategies are still used, but unless you have a very big wallet and an app that has proven monetization you should avoid. The tech is now there for you to treat your app just like a website, you integrate conversion tracking (from companies like Adjust or Appsflier), you buy traffic and you optimise toward a downstream event or roi metric, you bid up on channels/targeting segments that drive value you bid down where you see the reverse.
The way I see Mobile developing is that online and mobile will soon be seen as one ‘thing’. The ad tech vendors and progressive advertisers that master managing mobile and desktop as one will win.
Q2. The rise in programmatic advertising has seen a shift in brands wanting to take the running of such programs in-house – do you see this as an opportunity for brands to capitalise on understanding their audiences better?
First party data is incredibly valuable to performance advertisers, as such advertisers are reluctant to hand this over to agencies or service partners. By taking ad trading in-house, advertisers have the freedom to capitalise on this data for optimization and new audience discovery
On the flip side, is this a threat to agencies and what could they be doing to position themselves in this market place?
The first point I will make here is that taking programmatic buying in-house is certainly not right for all advertisers. You need to have the confidence and conviction, and you need a certain scale. When the outgoings to your agency start to exceed the wages you could be employing a performance marketer for (+ expected software fees) this is the tipping point for entry.
Confidence and conviction are clearly more subjective. You will be able to gain guidance from software vendors as to whether an in-house strategy is right for you or not. The other point to make here is that agencies are very useful for entering new channels quickly. You can save a lot of trial and error time and money by paying an agency to help you enter a new channel.
For an agency to retain the business of progressive advertisers who are considering an in-house move, the best advice I can give to agencies is to offer transparency on margin and staff that are so skilled and experienced that the advertiser has no reason to even consider it. There are some exceptional agencies out there offering transparent pricing and some of the best media buyers in the land, they tend to be small performance marketing agencies rather than the larger agency groups.
Q3. What are the key challenges for the digital advertising industry in 2016?
From my perspective, the key challenges are those brought about by advertisers looking to take media buying in-house. The largest and savviest are already taking digital ad management in-house (early adopters are internet companies who generate most if not all of their revenues online; ecommerce, gaming, online travel, etc.); in fact, if you look at the decade-mature search space, the majority of internet companies do search in-house with a large team. With the right software, display is a natural next step.
For those that aren’t already taking digital ad management in-house, many are considering it. Are there some barriers? Yes to a degree (finding and training exceptional talent), but this can be easily overcome with the right strategic commitment to developing in-house competencies.