What are some of the top questions about the variety of ad formats and how to choose the best one for your business’s needs? We sat down with Steph Radzivonik, our Business Development Team lead for EMEA, to find answers.
There are many different ad formats that can be used in advertising. Which ad formats does Smaato provide? Which ad format performs best in which channel?
Smaato covers all channels (web, in-app, and CTV) at the moment and we are format-agnostic. This means we support all ad formats, such as video, display, native, and in-game. The best-performing ad format is defined by the channel: different audiences and experiences customers are looking to get while using this or that channel and this or that application/inventory type.
In-App Channel Ad Formats
For example, let’s consider the in-app channel: first, we should separate it by non-gaming and gaming apps. Of course, in the case of gaming apps, we are seeing the highest eCPMs and fill rates for interstitial and rewarded formats as they are more user-engaging.
Interstitial ads are displayed in a top location and take up the screen. They are extremely effective when you need to drive clicks and conversions. Rewarded ads have the highest engagement level as they offer some benefits to users. However, these types of formats can be considered by some users as intrusive ones, so frequency capping is a key parameter here to pay attention to.
Secondly, let’s take into account the type of games: casual, hypercasual, hard-core, mid-core. In casual and hypercasual games, display ads are still keeping their positions, such as sidebar banners or bottom sticky banners which can’t harm user experience in any way, as well as frequency capping is not a pain here.
It’s interesting, but even hard-core and mid-core gaming publishers, which traditionally worked only with performance-based ad networks, started adding branded ad networks to their waterfalls as well as display ads but mainly in the form of either static or dynamic in-game ads. It’s in-game but still, it’s display, so definitely we are seeing a tendency across publishers to reconsider display ads and add more display ad placements to increase their overall ad revenue.
If we look into analytics for non-gaming apps, native ad format is dominant here as it’s less disruptive but still user-engaging. It could be used and converted in different ad formats: native to display and display to native, depending on the highest bid received during the auction. So, this interplay between display and native brings the highest eCPMs as well as the best fill rates.
Web and CTV Ad Formats
Pretty much the same as we are seeing in the web channel, with the exception that native video is in high demand across all demand peers. As well, in-stream video ad formats became popular and it’s showing pretty high eCPMs. However, sometimes this format in the web channels could be considered by advertisers as outstream, so there is some ambiguity that needs to be under the radar of any company working in the ad tech industry. If we talk about CTV, pre-roll and mid-roll in-stream ads get the highest eCPMs as well as fill rates.
Key Performance Factors
So, you can see that the best-performing ad format really depends on the channel. However, there are many more factors that affect performance for each channel.
- In-app channel: CTR metric, device ID passed, SKAdNetwork 4.0 support as well as action type (bidding/waterfall).
- Web channel: availability of personal identifiers, universal ID support and type of integration (direct/indirect) are the must to consider; for
- CTV: view rate, win rate, top geos and content of the channel, auction type (PMP, OMP) are important. In general, seasonality, GDPR regulations/TCF v.2, LGPD (Brazil), and a number of uniques influence the performance greatly.
A/B Testing in Ad Monetization
A/B testing is very important in ad monetization, and adding content to waterfall without A/B testing is risky. What do you do on your side for testing?
A/B testing is one approach for monetization optimization, but at Smaato we use a more holistic approach to help publishers maximize their revenues.
Every publisher, every app, and every audience is unique, so performance is a question of numerous factors. Our task is to test and experiment with live traffic to see how our demand reacts/buys this type of inventory, and to determine what is the optimal bid floor or targeted eCPM. Same applies when we talk about in-app, where we check what performs better with this specific app and ad format: bidding or waterfall.
Is it risky for publishers to test?
I don’t really think that it’s risky. In the case of waterfall setups, we are always getting the expected eCPMs from the publisher. Our analytical system provides pretty precise revenue estimates on the basis of volumes, ad formats, inventory and integration types, and top geos. So, we suggest where a publisher’s inventory should be placed in the waterfall, considering our current top, average, and bottom floors. When it comes to bidding, it’s even more straightforward: we just set suggested floors to the relevant ad formats, so that the demand knows how high it should bid on this inventory — that’s it.
Ad Format Efficiency for Publishers
Considering today’s market trends, which ad format is the most efficient ad format in your opinion and why?
According to eMarketer, worldwide ad spending continues to grow despite economic uncertainties, largely driven by mobile’s continued impact on the ad market. In fact, they estimate that $1 in every $2 will go to mobile ad spending. Mobile advertising continues to dominate, outpacing CTV and desktop.
Video and display are still having the dominant positions. In-game advertising has been having a wider scope recently, however, non-clickability of these types of ads is pretty challenging. This influences fill rate greatly and interest of especially user acquisition, performance, retargeting, data/location demand partners. I would say that display is reborn and joined forces with video.
At Smaato, display is definitely a sweet spot while video ad formats are in high demand, so in my opinion they would definitely continue to go hand in hand. Static or dynamic in-game advertising is also trendy, but advertisers have been a little hesitant to get started.