Key things to know about mobile ad mediation to maximize your revenue and not compromise performance

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We’ve seen a lot in the last few years: The madness of the pandemic, the chaos of the post-pandemic period, the recession, acquisitions, bankruptcies, and so on. But one thing is relatively constant–the growth of in-game advertising. 

Even as the market is going through uncertain times, the outlook for in-game advertising is overwhelmingly positive. It is expected to reach $3.3 billion in value by next year. 

The market is booming, but surprisingly, publishers are not taking advantage of this landscape as much as they could be. In part, the market’s slow adoption of RTB is to blame: Most in-app inventory still uses “waterfall”, with ad networks filling requests at the lowest prices available. 

RTB has been extremely successful on the web, with many wondering what the technology can offer mobile publishers. Without further ado, let’s explore the ad mediation market, solutions available, and approaches publishers can adopt if they aren’t happy with the platforms available. 

Why do we use ad mediation solutions? 

Simply put, ad mediation solutions allow publishers to connect to more ad networks (and sell more ads) through a single touchpoint: the SDK (software development kit). 

Connecting to more ad networks means reaching more bidders, which, in turn, implies the ability to sell your inventory at higher prices. An SDK is instrumental in ranking and prioritizing bids based on their total potential ad revenue. 

To summarize, an ad mediation solution gets you: 

• Access to more ad networks (thus more bidders and revenue opportunities)
• Single source of truth for all data and analytics, giving a publisher a big-picture view of inventory performance
• Unified reporting for all key metrics (CTRs and CPMs per app type, user demographics, and so on) 
• Improved app performance. A mediation solution allows publishers keep the number of connected SDKs down to a minimum, reducing the strain of each SDK on system resources.

As for tools on the market, the most popular options are still Google AdMob , MAX by AppLovin , and Unity Mediation. Appodeal has also been gaining significant traction.

In general, the mediation ecosystem is actively developing, so it makes sense to keep an eye on new market entrants. 

The more SDKs, the better? Not necessarily

As we mentioned, an SDK helps significantly maximize reach and expand revenue opportunities. Naturally, publishers tend to use several SDKs to access more partners and bids. 

This strategy often backfires, mostly because SDKs are computationally intensive. Each one you integrate impacts the app’s performance. According to App Developer Magazine, a mobile app uses 18 SDKs on average, but developers have a hard time discriminating how much resources each of these consumes. It’s worth noting that there’s variability within the metric: The number of SDKs tends to go up for specific app categories, like Trivia, Strategy, Casino, and RPGs.

Interoperability is another technical challenge to keep in mind: connectors often have conflicting technical requirements and don’t co-exist with each other. 

Integrating multiple SDKs is a technical gamble that might bring in more revenue but is also likely to drive users away from the app due to: 

• Interoperability issues
• High maintenance costs
• App performance issues
• Inability to set custom eCPM requirements for different networks
• Limited monetization visibility

How can publishers make sure they are not leaving money on the table without pushing their technology to the limit? In our opinion, building a custom ad mediation tech stack is a way to go - here’s why. 

Where off-the-shelf mediation platforms fall short

Most mediation solutions, to start with, are backed by ad networks, meaning they would sneak the bids from their networks every chance they get (even if a competitor has a better offer). Understandably, that hurts a publisher’s shot at getting maximum revenue. 

Even presuming full transparency, most ad networks still use the waterfall methodology, which limits revenue prospects significantly compared to RTB (in a waterfall, a mediation solution waits for a network to bid and moves on to the next one only if the first-choice network does not respond). 

Mobile in-app bidding offers more opportunities (but it’s the road less traveled)

The reason why more publishers are looking over to the real-time bidding camp is in the mechanics of the auction itself: In RTB, the highest bid wins, not the first one to come through. 

Unfortunately, the number of ad mediation vendors with mobile in-app bidding integrations is small. Where RTB is available, the choice of DSP and SSP partners is often limited. As a result, we’ve seen a trend of building custom ad mediation platforms emerge among in-game publishers. 

Building a full-on tech solution might not sound like fun, given the commitment, development costs, and talent one needs to put in. Yet, in the long run, switching to custom mediation is actually a reasonable investment. Let’s make the case for it: 

• Freedom in choosing demand: ad formats, inventory assets, buying conditions, and ad partners (DSPs, SSPs, and ad exchanges). We’ve seen in-game publishers successfully create a purchase path for premium buyers and direct deals. 

• First-party data toolkit: custom ad mediation solutions give publishers deeper insight into the geography, demographics, and behaviors of app users. This data helps enrich ad requests and effectively address partners’ concerns about the quality of impressions. 

• Fraud prevention: in many ways, comes as a byproduct of advanced analytics provided by custom mediation solutions. Being in charge of your mediation stack gives you the ability to include fraud checkpoints (invalid traffic detection, bot blocking, SDK spoofing prevention, and so on). 

• Designed for scale: Off-the-shelf solutions often charge extra for new connectors or customization, which limits the publisher’s freedom. With a custom solution, an advertiser no longer faces this issue: you can increase the system’s processing power, optimize maintenance costs to keep them at a minimum, and add new capabilities without licensing fees. 

• Ramp up cross-promotion. Off-the-shelf solutions make it harder for publishers to spread the word about new titles in their other apps. In that regard, custom solutions give you full freedom to allocate the best inventory for your own ads or auto-fill vacant spots with cross-promotion banners. 

The takeaway

The in-game advertising market is growing by leaps and bounds, but monetization technologies are slow to catch up to the robust ecosystem of online advertising. Publishers are increasingly realizing the shortcomings of standard waterfall mediation and contemplating switching to RTB to maximize profits. 

Since the range of mediation platforms that support RTB is narrow (and, in any event, a publisher’s flexibility is constrained by the limitations of off-the-shelf solutions), publishers are opening up to the idea of custom ad mediation tech. 

In fact, building an ad mediation platform is not as intimidating and time-consuming as it might seem at first glance. If you want to get a clearer understanding of what you will be getting from a custom ad meditation solution and what the underlying tech, process, and cost will look like, our team will be happy to help. 

In the meantime, share your thoughts on your experience with in-app mediation solutions. Which features did you feel were missing? What improvements would you like to see in the coming years? 

Xenoss Newsroom 

Recently, we got back from DMEXCO 2023, and we cannot stop talking about it! It was great to catch up with our partners, clients, and colleagues in MarTech/AdTech about the latest trends and innovations. Till next time! 

Meanwhile, here’s the highlight reel of our amazing time in Cologne.