6 Mobile Performance Trends

In recent years, we've seen an incredible journey for programmatic advertising, with major headwinds and challenges. Have you seen Applovin’s recent earnings call?

Concerted optimization efforts and a strong software platform drove a significant financial upturn, with annual revenues surging to $3.3 billion (up 17% YoY) and adjusted EBITDA climbing 41% YoY to $1.5 billion!

This highlighted the industry's shift toward optimizing supply and demand across the landscape, along with a load of other tech.

These moves are just an example of what set the stage for explosive growth in the second half of 2023, giving the performance industry a strong push into 2024.

Despite the usual slowdown in ad spend, from Q4 to Q1, this year feels different.

There's a sense of optimism in the air, with a healthy flow of advertiser dollars, new product launches, and policy changes that are both exciting and challenging the marketplace.

As you plan your programmatic ad strategies, here are some important trends and highlights to consider:

Trends with Programmatic Advertising Budgets: Big performance buyers are rolling into the new quarter with renewed budgets and a sense of optimism, continuing the strength seen in Q4 of 2023.

The Super Bowl weekend, for instance, was a golden opportunity for brands like DraftKings to secure a ton of new users and have loyal ones back in the game. However, it's a different story for brand-focused and omnichannel SSPs, which have seen a slower start due to shifts in brand advertising trends.

The focus this year is clearly on efficiency.

Advertisers are looking for the best possible ROAS through the use of cutting-edge tools and tech, which should naturally lead to increased budgets.

In 2023, advertisers kept tweaking their budgets to chase the best returns, amidst a lot of market buzz. Despite high returns from some unexpected and less efficient supply sources, it left many wondering why.

This curiosity sparked several demand-side platforms to sharpen their strategies, digging deeper into their networks to boost performance and get a clearer picture of how their models work. This effort to refine and understand has been a win for advertisers and is set to keep delivering results into 2024.

This focus on strategy refinement and deeper insights has paved the way for more sophisticated use of machine learning and AI, setting the stage for unprecedented advancements in targeting and optimization.

Machine Learning and AI

Machine learning and AI advances make bidding more efficient, with neural networks set to revolutionize future bidding algorithms.

There have been significant strides in AI and its impact on bidding behavior across multiple channels.

With demand platforms diving into neural network tech, advertisers are set to see a new level of clarity in how their ads are bid on and where they're shown. Expect to see some really cool, on-the-spot ad creation that's as personalized as possible.

It's a bit complex under the hood, but if we lean into it, this tech promises to smarten up mobile advertising in ways we're just beginning to imagine.

While the intricacies of this technology might seem scary, embracing its potential is key to unlocking a future where mobile advertising isn't just smarter but also more cost-effective and efficient.

Innovations in Cost Reduction and Efficiency

SPO (Supply Path Optimization) has been a hot topic since last year, and we have seen the rewards of optimizing supply paths pay off for several DSPs (Demand Side Platforms). A tighter landscape means more dollars for direct O&O (Owned & Operated) supply and less for those in the omnichannel space.

With rising costs and inflation impacting the market, cutting costs will continue to be a trend in 2024.

As mobile usage skyrockets worldwide and advertisers re-invest their dollars, the inevitable cost rise has become a critical focus. The mobile advertising industry strategically prioritizes cost savings, from server expenses to optimization efforts.

Watch for an uptick in market consolidations, publishers merging, and collaborative ventures among advertisers as key moves to navigate this trend.

This cost-conscious approach is here to stay, underscoring the importance of vigilance.

As we watch these cost-cutting moves and collaborations, let's not overlook the exciting new products coming into 2024.

Emerging Products Spotlight: SKOverlay and SKPV

Supply partners who got on board with products like SKOverlay and SKPV (auto store kit) early are reaping the benefits. There's a significant opportunity for apps in networks that haven't yet adopted these to monetize further.

App builders aiming to maximize their app's earnings need to align with networks quickly to embrace innovations like SKOverlay and SKPV.

For advertisers, choosing demand-side platforms that widely support these advanced features with their partners is smart, ensuring a boost in ROAS and more effective use of their advertising dollars.

There's increasing buzz around new tools being introduced, such as the Android Store Kit, which fills a gap that's been noticeable in the market. If it performs on par with the iOS version, we could see a significant shift in advertising dollars favoring Android devices.

Expect these products to remain central to many supply partners' strategies for tapping into demand budgets.

Niche App Advertising on the Rise: Casinos and Cashback

Casino-based games and cashback apps continue to show strong demand. They'll remain significant players in the ecosystem if they comply with privacy regulations and gambling laws.

Performance marketers with a gaming focus could find great potential in expanding to non-gaming publishers in these categories.

Games like Papaya Gaming's Solitaire Cash and Bingo Cash are hitting the jackpot by drawing players into the thrill of playing with real money. This clever move taps into a goldmine of opportunity, especially as users look for fun ways to boost their income amidst tightening budgets due to economic factors.

And it’s not just gaming apps getting in on the action.

With the rising cost of living, cashback platforms like Rakuten are stepping up their game, promising users a better deal than the usual pennies returned from credit card purchases.

* Rakuten downloads showed an all-time high near the end of 2023 followed by continuous download growth in Q1 2024. Source: data.ai

Non-gaming business utility apps like Chaty have also seen a rise, catering to businesses looking to put all their messaging into one app.

This wave of apps, blending entertainment with economic perks, is set to grow in 2024, changing the game for how we earn a little extra on the side.

DMA and CTV Insights

The push for alternative app stores could redefine revenue streams for publishers and offer relief from the hefty fees imposed by the likes of Apple and Google.

While this presents an opportunity for new market entrants, it's a space yet to fully mature.

Giants like Unity or Steam have an opportunity to expand into direct publisher-to-user incentives. With Unity's extensive reach via its engine, it could significantly influence publishers to provide user incentives, especially in the EU.

The DMA is still in its early stages, but it hints at an exciting future for digital content distribution.

On the CTV front, while it's been a buzzword for a while, the performance industry is still exploring ways to scale attribution and drive tangible performance for buyers.

Prepare for a Transformative Year Ahead

As we wrap up this journey through the world of programmatic advertising in 2023 and look toward 2024, it's clear we're on the brink of some groundbreaking shifts.

The incredible financial success stories, like Applovin's impressive earnings, underscore the power of strategic optimization and technological innovation in driving growth.

With advertisers and DSPs fine-tuning their approaches to maximize ROAS and embrace advanced technologies like machine learning and AI, we're seeing the dawn of a smarter, more efficient era in mobile advertising.

The rise of emerging products such as SKOverlay and SKPV, alongside the strategic moves toward cost efficiency, highlight the industry's adaptability and forward-thinking.

Diving into niche markets and checking out new platforms, like how app stores might change or what CTV has to offer, feels like we're stepping into a world of both huge promises and big challenges.

Staying in the loop with these shifts is key for all of us riding the mobile advertising as we figure out how to make the most of the twists and turns in this fast-changing scene.

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