What Does 'Premium Inventory' Mean in Mobile Display Advertising? - eMarketer

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What Does 'Premium Inventory' Mean in Mobile Display Advertising?

January 16, 2015

Nitin Chitkara
Director, Mobile Product Marketing
Rocket Fuel

Mahi de Silva
(not pictured)
Opera Mediaworks

Chad Gallagher
(not pictured)
Global Director, Mobile

Jeremy Lockhorn
(not pictured)
Vice President, Emerging Media and Mobile Lead, North America

David Staas
(not pictured)
Ninth Decimal

eMarketer asked a panel of supply- and demand-side ad experts to explain the difference among mobile inventory that is premium, mid-tier or bottom tier. The following excerpts from conversations with a selection of executives from different corners of the ad market illustrate the fluid state of premium inventory in mobile. The excerpts also highlight the leading factors that drive advertisers to pay premium prices for mobile display inventory. Some of the factors are a mirror image of those shaping the perception—and value—of desktop inventory. Others, such as location targeting, are unique to mobile.

Chad Gallagher

Global director of mobile for media company AOL

Premium is in the eye of the beholder and buyer: “Premium is linked to who the marketer is and what they envision. A premium experience for one advertiser may not be considered a premium experience for somebody else.”

Standalone ad units are premium: “Another way we differentiate premium vs. nonpremium is in the depth of the experience we deliver. A lot of advertisers are not thrilled with their mobile experiences, meaning their own mobile app or mobile website. So a lot of brands want us to create a premium mobile experience for them and have the entire experience live within the ad creative itself.”

Jeremy Lockhorn

Vice president of emerging media and mobile lead for North America at digital advertising agency Razorfish

Confidence and transparency drive premium prices: “More often than not, the definition of premium skews towards a publisher-direct deal where you have a really high level of confidence, meaning the advertiser knows where the ad is going and what content will be surrounding it. So premium tends to be known publishers, publisher-direct deals.”

Precision targeting can be an exception to that rule: “Premium can also be defined as having the right targeting variables and potentially less knowledge about where the ad is going to run. Sometimes that can be considered a premium purchase as well.”

David Staas

President of mobile audience intelligence company Ninth Decimal

Premium is defined by the ad format, and the degree of targeting: “In terms of the ad format, bottom tier is standard mobile banners, mid-tier is mobile rich media, and premium is mobile video. From a targeting standpoint, bottom tier would be run of network, basically untargeted. Mid-tier may involve targeting a standard audience segment like moms or targeting users within a very simple geofence. Premium-level targeting involves more granular levels of audience segments. For example, moms with young kids who drive a certain kind of car and buy certain types of groceries and eat at certain types of restaurants. Or, premium-level targeting might combine an audience segment with geofencing. For example, I want to reach tech enthusiasts who recently shopped at Best Buy and serve them an ad only when they are near a specific store. That’s more premium.”

Mahi de Silva

CEO of mobile ad platform provider Opera Mediaworks

Tiered pricing in mobile is a function of the sales process: “The ads that show up in mobile are a function of how premium publishers sold their inventory in more traditional forms—TV, print or even desktop. Mobile tends to benefit from a spillover of that bigger ad buy. A good example is advertisers that advertise on TV tend to follow that audience to mobile. That drives pretty high CPMs given that these are large budget commitments where the publisher is promising essentially multilevels of engagement for that same brand across different modalities.”

Scarcity pumps up prices: “Even though those media companies I just described have good followership and a fairly diverse audience, they actually don’t have that many impressions. And that scarcity allows them to price that inventory significantly higher than the mid-tier. Mid-tier for us tends to be a bit more of more longer-tail content, meaning digital-only outlets that have high-quality reporting, but the brand name is a little less valued compared with a marquee publisher like The Wall Street Journal. The longer-tail content commands lower CPMs, but those publishers tend to have a lot more impressions. So despite the lower CPM, the total dollars that they might see from advertisers could be significantly higher than some of the big media guys that are selling at the very top level.”

Nitin Chitkara

Director of mobile product marketing for programmatic media buying platform provider Rocket Fuel

Audiences, not publishers, define premium in mobile: “It used to be that premium inventory in mobile was buying on a premium site like CNN or The Weather Channel without really focusing on the type of consumers who were looking at those sites. Now with real-time bidding and the auction-style buying and selling model, you have the ability to buy premium consumers directly. In this scenario, you’re looking less at the actual site that consumers are on and more at what you know about that consumer. Things like location, time of day and frequency at which you see that consumer, basically all of the data points that qualify consumers and inventory as premium or not premium.”

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