Fragmented Mobile Ad Tech

Why Is the Mobile Ad Tech Industry So Fragmented?

by | Apr 6, 2015

Fragmentation is innovation’s Sunday morning hangover.

Saturday night is always A LOT of fun. It starts out with plentiful planning and good intentions. But the next morning? Everyone just ends up with a headache.

Historically speaking, our sector has enjoyed a good number of crazy Saturday nights, driving innovative new products and services for our increasingly technological society.

It seems every major company from Facebook to Google to Apple tells a story of humble beginnings, having been founded in a dorm room or garage by young entrepreneurs looking to hatch something new. Something never seen before. Something that can change the world.

[tweetable alt=”Innovation is the bedrock of American enterprise. #startups “]And in many ways, innovation is the bedrock of American enterprise[/tweetable].

Independent players, young start-ups, and self-appointed entrepreneurs infuse new vision, insight, and ideas into established industries, sparking dramatic leaps forward or destiny-altering shifts in the landscape.

The ad tech industry has played out much in this way. New developments like the explosion of new publisher websites or the widespread adoption of mobile devices necessitate a response from technology companies – both established and newly founded – to offer their own solutions to a growing list of demands.

These solutions indeed drive innovation. But they also come with a cost: fragmentation.

Mobile Advertising Fragmentation

The industry is plagued by fragmentation. Each year, new technologies arise to harness the capabilities of mobile devices as well as the swell of people flocking to the use them. As a result, the mobile ecosystem grows and changes at an alarmingly fast rate – often too fast for the industry to keep up.

This causes pain points or specific problems within the industry that have historically been addressed by hyper-specialized solutions. Today, issues over ad fraud and viewability are being addressed in bulk. Tomorrow, an entirely new crop of challenges may arise and so too will a slew of new “problem solvers.”

In response, hyper-specialized solutions can work. But once a tipping point has been reached, once there are so many that it does more harm than good, the entire system becomes threatened.

Unfortunately, mobile advertising is experiencing such a threat right now.

The Current Mobile Landscape

The above monstrosity is a visualization of the mobile landscape as it exists today, put together by the good people at Luma Partners. It represents hundreds of the biggest players in our space that tackle various problems caused by the opportunity this new technology presents.

As it stands today, running an effective mobile campaign could require 5-15 different solutions across as many different vendors.

For example, a mobile DSP today might need to integrate with:

  • multiple ad exchanges,
  • one to four 3rd-party data brokers,
  • a mobile DMP,
  • a fraud detection tool,
  • an ad serving platform,
  • a measurement platform,
  • a rich media ad builder,
  • and ultimately some sort of real person or programmatic solution to monitor and optimize results.

It’s an incredibly complex process, one that is filled with fees and breakage along the way.

Also, consider now that mobile advertising is undergoing a dramatic shift in the way ads are bought and sold. More and more, ad buying is done programmatically through real-time bidding. That is to say, ad inventory is bought and sold by automated computers that complete the process in the time it takes to load a webpage or app.

[tweetable alt=”Most #mobile ads require 5-15 technologies to fire in under 200 milliseconds. “]In other words, five to fifteen disparate vendors are expected to work together flawlessly in under 200 milliseconds to serve a single mobile ad unit.[/tweetable]

Sometimes it works. But more often than not, it doesn’t. Ad attribution becomes nearly impossible to measure due to inconsistencies in reporting, plummeting campaign efficiency in the process. At times, entire campaigns crash due simply to disparity in technological platform.

As more and more vendors are added to the process, the likelihood for these problems to occur only rises.

But that doesn’t mean that these innovative mobile technologies can’t be integrated. Bringing everything from mobile DSPs to measurement platforms together under one roof works to eliminate nasty breakdowns in communication.

In our opinion, it’s the only way to keep up with an industry moving at a blistering 300 miles per hour.


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