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Why The Hybrid Model Will Win Out For Programmatic In-App

Over the last few months, many mobile monetization and mediation platforms have announced their solution for ‘in-app header bidding’ - or put differently (and more accurately) their solutions for programmatic real-time auctioning of in-app inventory.

But even though programmatic is a hot buzzword and becoming increasingly important in the in-app ecosystem, this new technology will not necessarily result in immediate upticks in revenue for all publishers who use it.

Unlike on web, where header bidding was about leveling the playing field, on mobile the rise of programmatic is more about optimization and how that’s going to evolve over the coming years. Traditionally, waterfall optimization has happened according to a model based on historical data. Programmatic enables us to switch to a model based on impression-level machine-learning in real time, which will result in more competitive bidding and higher prices for app developers - in theory.

Having said this, the waterfall model may still be very relevant for specific publishers - for example for larger developers or publishers who have already secured good deals with the networks they work with, or in cases where developers have certain countries with a very low scale of traffic. Bidding in a programmatic context happens on a CPM-basis, which adds risk for any performance buyer who is looking to pay for specific user actions post install. Places with low traffic therefore represent high-risk areas, which can only be mitigated by lower bids - resulting in less revenue for the publisher.

It’s also important to note that very few of the leading SDK networks actually support programmatic, and developing those capabilities is not necessarily part of their strategy. That’s why we’ve decided to build a hybrid model. Forcing our publishers and networks to switch to a fully-programmatic solution may not actually be best for their bottom line. That’s why we’re giving our publishers all the options available - robust programmatic mediation capabilities across all types of demand sources, and the option to stick to a traditional waterfall model if they want to.

The ironSource platform is in fact a double-hybrid solution - mediating between both SDK and non-SDK demand sources, and between programmatic and non-programmatic, or ‘static’ demand sources. This gives our publishers maximum flexibility, transparency, and control.

This not only means developers can benefit from the ad revenue of every kind of demand source available, it also means they’ll be able to mediate demand from the same source (SDK network or otherwise) in two different ways - both programmatically and non-programmatically - at the same time.

This hybrid model also has other advantages, ensuring maximum fairness and transparency for developers, as opposed to marketplace solutions which give exclusivity to only one ad exchange (the platform's own ad exchange) to bid in real time. They privilege their own demand and limit other ad networks, layering them on top in a waterfall that operates according to last-day performance. Similar to the web’s header-bidding, our programmatic mediation solution allows you to work with a hybrid of multiple demand sources to compete over your inventory fairly and in real time. The platform is completely agnostic to whether those demand sources are ad exchanges or ad networks.

This also ensures a fair ecosystem for demand sources, since there is a fair, unbiased auction for every buyer, whether they are big or small, brand-focused or performance-focused - the competitiveness of their bid ultimately decides if they win the impression or not.

Our hybrid mediation applies across every kind of ad unit out there as well - including sophisticated interactive creatives like playable ads, because we know that that is where some of the biggest revenue opportunities for publishers, and growth opportunities for advertisers, lie.

We’re not interested in jumping on a trend just because it’s sexy. Our goal is to create a solution that brings maximum value to our publishers, not one which forces them to make a shift which might not necessarily benefit their bottom line.

The main goal here is still very simple - maximize the value and accessibility of in-app traffic, and enable app developers and publishers to drive more revenue. Programmatic is clearly going to play an increasingly critical role in the app monetization landscape moving forward - there’s no doubt about that. But our goal is to give our publishers the technology with the greatest number of options for maximising the value of their inventory and managing their monetization effectively.

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