Will 2015 be a Breakthrough Year for Ad Tech at Mobile World Congress?
Mobile World Congress has arrived, with the mobile industry’s biggest names all headed off to Barcelona. The event is still largely the domain of ‘legacy’ businesses from the sector. Barring a few exceptions, mobile advertising is a minority interest at the show. ExchangeWire examines efforts to increase the profile of the advertising industry at the show.
The 2015 installment of the event is barely a morning old, and the industry’s largest device manufacturers (Samsung, LG and Huawei) have already attempted to ‘own the show’ by unveiling their latest flagship smartphones and ‘wearbles’ in the run-up to the event.
The level of hysteria surrounding these launches among bloggers and the tech press leaves you in no doubt, Mobile World Congress is still predominantly a show about mobile technologies (think NFC handsets, and 4G mobile networks).
Even the (largely) defunct Nokia brand still has a place here (as a mobile network technology manufacturer).
The ad tech sector is still an afterthought, albeit an emerging one.
Mobile operator’s struggle with advertising
The reason for this is quite simple: no mobile operator has made a success of mobile advertising (let’s not forget, the event itself is hosted by the GSMA, the global trade body for such businesses), with the main focus of the show focused on what drives their revenues.
This is not to say that they have given up trying. With the vast swathes of first-party data most mobile operators have at their disposal, they would be extremely shortsighted to simply give up on something as potentially lucrative as mobile advertising revenues.
This is especially the case as the Silicon Valley giants, like Facebook and Google (in telecoms circles such firms are called ‘over-the-top’ (OTT) players), view mobile advertising as critical to their future business models.
To use telecoms jargon again, this would pose mobile operators with a ‘dumb pipe’ scenario, where they face little or no revenue increase for shouldering increasing amounts of data across their networks, while aformentioned OTT players continue to get rich.
Telefonica’s Axonix
One such example is the Spanish incumbent operator Telefonica, which recently launched a white label ad exchange via its Axonix arm, a joint venture with affiliates of Blackstone’s GSO Capital Partners.
Dubbed the Axonix White Label Ad Exchange, the service gives premium publishers, ad networks, mobile operators and data providers the ability to set up their own self-branded programmatic trading environment.
The company claims it gives partner organisations “total control over how their ad inventory and data are traded” in order to achieve “audience extension” and retargeting capabilities across any publishers’ ad inventory.
In addition to real-time bidding (RTB) auctions, Axonix’s trading rules support multiple alternative sales channels, including preferred trading relationships, programmatic direct sales and internal media sales teams.
Add this to the Weve proposition in the UK (its ad tech initiative was first publicly unveiled a year ago, and debated at length on ExchangeWire), and it’s clear to see that operators have yet to give up on the fight for ad tech.
Can first-party data distinguish operators from the rest?
However, speaking about the launch, one ExchangeWire source noted how existing ad tech players such as AppNexus and Rubicon Project (which could equally be considered OTT players) already enable media owners to build mobile exchanges, adding that mobile operators must highlight a point of differentiation in order to stand out.
The source added: “I think the one question everybody will be asking who works in the mobile sector is what will happen to their rich first-party telco data?
“Will this be used to encourage publishers away from competing ad tech vendors? Selling an impression enriched with this data will only increase demand and sell-through, so it could be a very attractive proposition for the mobile sell-side who [sic] has very little first-party data to compete with the walled garden vendors [read Facebook, Google, et al.] in play.
“That said, questions will be asked about the scale of this telco data and what regions it is being deployed in? [Remember that Telefonica boasts over three-hundred million subscribers across Europe and Latin America].”
Although they did continue to raise questions over the prospect of another white label service provider crowding the mobile ad tech market, adding if anything this sector required more consolidation.
Telefonica’s Axonix, among a host of other ad tech firms such as AppNexus, MediaMath, Millennial Media, MoPub, OpenX, Pubmatic, and xAd, will all be exhibiting their wares in Hall 8.1 on the show floor this week.
Mark Zuckerberg Keynote
Back to the main stage of the show, and Mark Zuckerberg, Facebook, CEO, is scheduled to deliver a keynote address on the opening day of the event (historically the time slot dedicated the mobile industry’s perceived zeitgeist).
Granting this slot to Facebook is justified, given that mobile advertising accounts for 69% of the social network’s revenues at the latest count – a miracle turnaround, given that Facebook was almost sued by its investors for not monetising its mobile traffic in the aftermath of its IPO.
In addition, Facebook’s ad server Atlas is widely perceived as one of the leading cross-screen advertising platforms. Its vast amount of logged-in data is enabling advertisers to plan campaigns across screens, as well as link them to actual in-store sales (in theory at least).
With Facebook widely touted to be launching an accompanying DSP this quarter, will Mark Zuckerberg use this global stage to do so, and firmly embed ad tech into the key headlines to come out of Mobile World Congress? We’ll just have to see.
Meanwhile…
Elsewhere on the peripheries of the show, or “partner events”, the IAB is joining Facebook to host an ‘Innovation in Mobile Advertising Event’. AppNexus is hosting a conference session to discuss ‘The Future of Yield Management in Mobile Advertising’. And there will also be the outlier media-focused event ‘Mobile Media Summit’, which will feature MasterCard’s CMO, as well as Nike’s CTO.
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