A Forrester Consulting Thought Leadership Paper Commissioned By The Rubicon Project

Selling Mobile: Its About The Industry, Not Just The Inventory
Why Publishers Must Change More Than Their Pricing Sheets To Monetize Mobile April 2013

Forrester Consulting

Selling Mobile: Its About The Industry, Not Just The Inventory

Table Of Contents
Executive Summary .....................................................................................................................................................................................................2 Selling And Managing Mobile Face Several Barriers Today ...................................................................................................................4

Mobile Is An Important Channel Alone And As A Complement To Others .....................................................................................2 Hopes That Mobile Automation Can Help Are High ...................................................................................................................................5 Key Recommendations ..............................................................................................................................................................................................8 Appendix A: Methodology ........................................................................................................................................................................................9 Appendix B: Endnotes ................................................................................................................................................................................................9
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Forrester Consulting

Selling Mobile: Its About The Industry, Not Just The Inventory

Executive Summary
In February 2013, the Rubicon Project commissioned Forrester Consulting to conduct primary research to evaluate sellers and buyers experiences with mobile display and the benefits of mobile automation. To explore this trend, Forrester developed a hypothesis that tested the assertion that publishers are beginning to sell mobile inventory and that, as their strategies mature, automation will become a key to growth. As mobile use continues to grow among consumers today, the importance for buyers and sellers to use the mobile channel, manage buys and yield, and optimize results becomes increasingly important. In conducting in-depth interviews with sellers and buyers, Forrester found that although publishers and marketers are still becoming acclimated to the mobile channel today, advanced management such as that offered by an automation platform can help drive mobile advertising toward maturity.

Key Findings
Forresters study yielded four key findings: monetizing the channel.
Publishers are well aware of the importance of mobile to their businesses, but theyre having difficulty Understanding mobile is a challenge for publishers, but many are plagued by issues that run much deeper Lack of expertise on the sell-side and lack of established standards and performance metrics have made Both publishers and advertisers acknowledge the benefits of employing an automation solution once their

than simply learning a new channel.

media buyers hesitant to put money behind this still-emerging channel.

strategies become mature enough to seize the opportunity.

Mobile Is An Important Channel Alone And As A Complement To Others

The growing importance of mobile today is clear: 1) Consumers are increasingly turning to their mobile phones to consume content when, in the past, they would have fired up their PC; and 2) traffic to mobile websites and apps is ticking up substantially. Interviews showed that publishers are seeing 15% to 20% of organic web traffic coming from mobile devices, and Forrester forecasts US mobile Internet users will grow from 148 million today to 200 million by 2017. 1 Both sellers and buyers recognize that as consumer time and attention shift to mobile, so must their advertising dollars. And marketers are acting on this instinct: Forrester forecasts that mobile marketing spend will grow significantly over the next few years, reaching more than $8 billion by 2016. 2

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Selling Mobile: Its About The Industry, Not Just The Inventory

Figure 1 Marketers Plan To Increase Investment In Mobile Marketing Spend

Source: US Interactive Marketing Forecast, 2011 To 2016, Forrester Research, Inc., August 24, 2011

The publishers we spoke with are feeling the pressure to leverage mobile as a channel today, and they recognize that it has unique factors to be accounted for that include different consumer use cases and expectations, and unique benefits such as location-based targeting and in-app ads. However, while they acknowledge this uniqueness, publishers look forward to a future state where mobile will be fully integrated with other channels and the inventory will be device-agnostic. As one publisher explained: For us, run-of-site means run-ofeverything app, desktop, mobile, optimized, etc. You buy run-of-site, it will run on all of our devices. The special things that mobile can do will become the mobile sell hyper-local targeting, interstitials, couponing/deals. Those become the mobile piece the rest is a media buy for us and it runs everywhere. Today, as both sell-side and buy-side take baby steps to embrace this future, we uncovered that:
Sellers are starting to mature their mobile offerings. The publishers that we spoke with range in the extent

Mobile is sold primarily as part of a package. Most commonly today, mobile is sold as part of a multichannel

of their mobile offerings some just offer standard, static formats, while others offer a range including everything from rich interstitials to fully customized package offerings.

Mobile is sold by a multichannel sales force. Its not just the buy thats bundled. The majority of interviewees do not have a dedicated mobile sales team. As one publisher told us, We used to have a mobile-dedicated sales

bundle; one publisher we spoke with stated: We dont sell just mobile anymore selling mobile separately is like trying to sell just laptops separately. One buyer we spoke with echoed, We will rarely do mobile-specific buys. If we need moms and know theyre on BabyCenter, we will go there, and as part of a traditional buy add mobile to it. Another reason mobile is bundled with other channels is to encourage buyers to embrace the channel. As another publisher stated, We try to encourage people to get into mobile by offering it try to package it into other offerings.

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Selling Mobile: Its About The Industry, Not Just The Inventory

force but not anymore. Its more about the objectives than the screen. This is reflective of the progress we saw across the interviewed companies, where there is an understanding that: 1) because silos within sales teams have caused problems with integrating digital into traditional business models, companies are trying to learn from that mistake and avoid silos with mobile; and 2) the buyers objectives are far more important a criterion than screen size.

Several Barriers Hinder Selling And Managing Mobile Today

As sellers and buyers ramp up their investment in, and experience with, mobile paid media, there are several hurdles that they face in fulfilling the channels potential. As one publisher stated, I have this huge mobile audience, and its not being monetized as well as it could the market is learning how to use it and were learning how to sell multiplatform. Most notably we heard that:

Sales forces lack mobile expertise. All but one publisher we interviewed believe that their sales team isnt

Mobile mechanics still need work. Because mobile has not yet matured, it lacks the standardization that has

yet well-versed in mobile. The specifics of the technology differences and unique benefits can give them pause, as one publisher states: The nuances within mobile are way different. In mobile you do have to understand the different screen sizes, percentages of individuals that look at it so there is training that is needed. And buyers notice, as one said, The traditional reps, non-mobile-specific, are just as baffled as I am. They are still asking, What am I selling? What does it mean? And its not just screens and audiences: Sales teams must understand the challenges that are inherent in mobile because its still an emerging channel: challenges around measurement and standardization.

A lack of standards leads to tracking and measurement hurdles. Compounding the problem is that this lack

helped display on desktops, such as standardized ad formats, standardized sizes, and consistent ID methods. One publisher cited its biggest pain points: Too many formats. Not enough lead time to get creative in-house. Lots of inventory, and CPMs are low. Were still working to find the right model to monetize mobile. And another publisher revealed the impact of a lack of standards: The ad format is a difficult challenge. We have three ad servers depending on the platform, so you need to feed it through three systems. This requires different insertion orders (IOs), different creative and tags. The industry hasnt standardized it yet. Additionally, companies at all stages of the mobile value chain are still trying to figure out what to do with the unique data that mobile brings in. As one buyer points out, I have to ask, Why am I running this campaign on mobile? Usage is skyrocketing, but you cant just move into a mobile campaign just to catch eyeballs. Consumers are about me time on that device, and you seem too interruptive unless you have a unique mobile idea.

of standards leads to poor, misunderstood tracking and measurement. To persuade buyers to invest in mobile, sellers have to be able to prove success of the channel. But today, there are no established KPIs to work from to measure success against an accepted standard. Even more difficult? Tracking and user identification. Cookies work on many phones, but not all and even when they do work, they cant be used to track a unique visitor between an app and a browser or among different apps. As one buyer said, [With mobile,] optimizing is in air quotes when you cant track stuff, youre guessing. Were trying not

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Buyers still need convincing. With a sales staff insecure with mobile, it can be hard to ease buy-side fears.

to fry our spend on stuff we dont understand. One publisher put it bluntly and accurately: Clients wont plan mobile as part of the media mix unless they know what impact it is having . . . if we can get the measurement, we can get the budget.

One buyer explained that people are still having difficulty wrapping their heads around the basics: I think a lot of what is holding mobile spend back today has less to do with a lack of automation than a lack of knowledge about how to use the channel. And one agency buyer stated: We get different information around how mobile audiences are generated, conversions are tracked, and ads served. With different vendors giving different information, and with so many answers to the same questions, its like no one really knows whats going on. And although mobile is being bundled, it is often the first thing on the chopping block. Our sales team cant explain what the mobile performance will look like, and the channel gets the ax.

Hopes Are High That Mobile Automation Can Help

While today the management and success of mobile selling is scattershot, its apparent that both publishers and advertisers feel optimization will be possible as the channel and accompanying solutions mature. Although there are significant differences between mobile and desktop display, in some ways, mobile is following a similar maturation process as online. An important part of this process are advancements in tools and technologies that allow for the shift to programmatic, data-driven media management, which in turn leads to increased management, transparency, and optimization of paid media for both the sell-side and the buy-side. Publishers are excited about the possibility of an automation platform that will bring this shift to fruition. According to one marketer, a mobile automation platform would mean continuing into more programmatic capabilities; getting more to where we are on display . . . just getting the pipes where they need to be in the mobile.

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Selling Mobile: Its About The Industry, Not Just The Inventory

Figure 2 Programmatic Solutions Offer A Myriad Of Benefits To Buyers As Seen In Desktop Display

Source: The Future Of Digital Media Buying, Forrester Research, Inc., September 7, 2012

There is consensus that automation can help mature mobile monetization strategies by:

Incorporating third-party data. A benefit of the mobile channel is the rich data that is available about a

Increasing transparency and establishing pricing standards. As was seen with desktop display automation,

users context. Incorporating outside data will optimize the channel by enhancing targeting abilities and creating a more comprehensive cross-channel view of not just customers as a set but each customer as an individual. As one publisher stated, We are looking at solutions to pull together data from a third-party network. Once publishers can incorporate that data, theyll be in a strong position to work with advertisers to create mobile programs that are far more custom and relevant to each audience than todays campaigns. mobile automation promises to remove some of the guesswork and murkiness in the pricing, placement, and performance of campaigns. One person we spoke with acknowledges that this can help mature his pricing strategy for mobile, saying: [What is needed is] transparency: to understand what is being bid on, who is bidding, what drives the spend, what sources of data are more valuable. This helps me figure out how I set price floors and test. And another publisher points out that its just as much about weeding out the bad experiences as it is optimizing the good, saying, We have had a harder time with mobile identifying bad ads, the source, where it came from, and cleaning them up to ensure it doesnt happen again. publishers manage buys across channels more efficiently and effectively, something that will really appeal

Offering a cross-channel, holistic view of success. An automated solution holds promise for letting

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Selling Mobile: Its About The Industry, Not Just The Inventory

Reducing manual labor. The majority of the publishers we spoke with are enthusiastic about the possibility

to its buyers. A buyer we spoke to said it best: The biggest thing for me is how do I automate my buys to create the optimized mix of spend across channels? And another echoed the sentiment: If I had my way, Id have everything in a platform and look at it all in the same way. Theres a huge benefit to being able to look at it all.

Delivering on mobiles key value proposition. As weve stated, publishers know that mobile as channel

that mobile automation will reduce the amount of time their highly skilled and highly paid sales staff spends on mundane but necessary tasks. Just the task of manually processing direct orders takes hours and hours of time. Automating those kinds of imperative but not skill-dependent tasks will give salespeople more time to handle the high-touch relationship-building, which is not only what theyre best at, but also what drives the most revenue.

But even with all the enthusiasm surrounding the idea of a mobile automation platform, publishers are careful not to get ahead of themselves. They understand that given the state of their own businesses, technology platforms are not the silver bullet that will instantly remove all barriers to mobile monetization success. Publishers told us that they still have big challenges to overcome if theyre to take advantage of a mobile automation solution, such as:
Embracing programmatic overall. Many of the most successful mobile publishers are traditional media

provides unique opportunities to create one-to-one, contextually rich connections with consumers that are not possible on other channels today. While the publishers we spoke with are excited about the notion of mobile automation, they insist that any solution they implement must be able to handle these unique opportunities. One publisher told us that what any mobile automation solution has to be able to bring to the table is advanced, well-thought-out solutions for me to deliver a message to the right person at the right time. Echoes another, Mobile is more hyper-localized you can tailor messages to a local customer, so you have to have some amount of automation that pulls-in ZIP codes or has intelligence around it, and then serve the ad. And buyers expect this from the automated offering, with one telling us: The uses of mobile are different than desktop display . . . in desktop display you have information about content and intent. In mobile you have a lot of information about location and device, so how do you tailor the strategy around that information?

Establishing shared priorities with IT. A mobile automation solution isnt going to come cheap, and with IT

companies and many traditional media companies have yet to fully integrate digital, let alone mobile, into their business. Before companies like this can take advantage of a mobile automation platform, they must embrace the notion of selling audiences to a programmatic buyer. One publisher told us that her company would win, with the scale and premium nature of all our brands combined, but we still maintain sales forces particular to each brand. Targeting across the brands, programmatically, is what really needs to happen but that will mean a wholesale restructuring of our entire business. And there is a learning curve among the programmatic buyers, too. As one agency buyer stated, Were trying to get our head around regular DSPs, and we dont have the mobile use case yet clients that would justify investing in mobile DSPs. still playing the role of cost center in most companies, procuring a platform isnt yet a no-brainer. Product

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Having confidence in standards that are established. Many publishers told us that even if they had the

and sales leaders must come together with IT to established shared goals and priorities for the future of mobile monetization. If both sides have skin in the game and understand just how quickly mobile could improve the companys bottom line, the process of vetting and selecting the right solution to increase the companys efficiency and capacity will undoubtedly go more smoothly. As one publisher told us: At my company, the biggest challenge is that IT needs to come out of the back office to understand how our business works, not just how our email and file sharing works. We need and want their help. I know I cant do it alone! budget and the interest from buyers, theyre not sure they would procure a mobile automation platform today for fear that once standards are established theyd need to switch vendors. This reveals just how badly standardization is needed for mobile to mature across all parts of the value chain. As one publisher says, I hope the industry will come together and make a decision about this we will benefit from standardization.

KEY RECOMMENDATIONS

While mobile automation isnt going to solve all of mobiles problems immediately, publishers must be prepared to take advantage of the automation opportunity once it matures. Both sellers and buyers will have to commit to embracing this channel for it to work as one publisher asked: Why am I the only one taking a risk here? Buyers arent ready to take that risk for us. We both have to get our feet wet here. To get started: Take the blinders off. Mobile is a moving target, and that isnt going to change. Look for ways to automate today, but embrace the fact that youre testing an evolving medium. Get started by testing todays banners and rich media, but know that mobile formats and standards will change. What you sell today will almost certainly not be what you sell tomorrow, but thats OK. Take the opportunity to cultivate mobile as an internal competency while its still nascent. Once the opportunity is mature, your organization will be, too. Decide if you are a leader . . . Its true: Standards dont exist today. But they wont drop out of the sky either. There are organizations and technologists out there trying to establish these standards today, and if youre a leader in the mobile publishing space, you should be a part of it. As one publisher stated: [We want to] be first beat the market. Its coming programmatic is next. If that sounds like you, jump in and help establish guidelines and standards. Partner with the Interactive Advertising Bureau (IAB), the Mobile Marketing Association (MMA), and others to make sure your voice is heard. Partner with vendors and agencies to forge the processes and functionality that will help the whole industry succeed. . . . or a follower. Many companies cant afford to put the time and effort into establishing the standards and thats okay. But you cant afford to sit back and wait till the standards are set, because once they are, there wont be much time for you to catch up. Take the steps to prepare yourself for fast adoption by evolving your internal skills and understanding. Start by ensuring that you personally understand the mobile opportunity. There are many resources at your disposal educational programs through leading industry associations are a good place to start. Once you have a grasp of how mobile will impact your company, you must become an internal evangelist. Your colleagues may not need to acquire the same skills and enthusiasm that you now have for mobile, but youll need their support when the mobile monetization opportunity becomes a reality. A more concrete imperative? You must start training your sales team to talk the mobile talk as soon as you can. As one publisher noted, [Mobile] may not be there right now, but it will be soon, and our sales force has to get ready for it.

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Appendix A: Methodology
In this study, Forrester interviewed 15 buy-side and sell-side organizations in the US to evaluate the impact of technology that mobile publishers and media buyers use and which they could use to sell and manage their mobile inventory. Participants included digital ad strategy decision-makers at comScore 500 publishers and major US advertisers, and trading desks. Questions provided to the participants asked about their experiences and approaches to selling/buying mobile media today, focusing on technology, personnel and structure, analytics, and go-to-market messaging. The study began in December 2012 and was completed in March 2013.

Appendix B: Endnotes
Source: Forrester Research Mobile Advertising Search And Display Forecast 2012-2017, Forrester Research, Inc.
1 2

Source: US Interactive Marketing Forecast, 2011 To 2016, Forrester Research, Inc., August 24, 2011.

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