In Game monetization, Smartads

To adapt an idea from George Orwell:

All mediators are equal but some mediators are more equal than others.

When Orwell wrote Animal Farm, in-game advertising meant billboards at baseball. 60 years later, mobile gaming generates more revenue than even Hollywood and several services have sprung up with the stated aim of helping developers to capitalize on their reach. Sadly, all is not as it seems. Ad mediation should be about maximizing revenue and improving Cost per Thousand Impressions (CPM), but optimization too often takes a back seat to trade-offs and sleight of hand.

Skin in the game

The vast majority of mediators are owned by the same networks serving ads to be mediated – that introduces implicit bias to the equation. No competitive ad network will ignore its own client within the stack and opt for a rival, simply to drive your CPM. Nobility and honesty don’t translate to revenue. Rather, the network will do what it should be expected to do – that is, protect its own interests.

Textbook nepotism. Presented with a pool of brilliant candidates, Mr. Mediator shocks the world and selects a distinctly average ad from his parent network. It matches requirements and does the job, but there’s a better option sitting idle in the stack. Here’s the problem: as a developer, you won’t ever see that better option. A biased mediator relies upon you being happy with your lot, no questions asked, and that’s usually the case. The industry needs you to ask questions. Dig down into the process and you’ll see nothing but missed opportunities accumulating in the thousands. Suddenly, ‘average’ seems anything but.

Mediation services choose ads in the same way that analysts hone in on specific players – it’s a game of segmentation. Say, for example, you run a vocabulary puzzling game and you stipulate that you don’t want your users to see ads for adult, violent or non-English language content. Each criterion rules out a certain selection of the ads in the stack and leaves you with the best of the rest. Bias, however, introduces another shadowy criterion to further reduce the pool of available ads and tip the scales. This process does maximize revenue, just not for the developer.

Only an unattached mediation service can be expected to serve ads with a singular focus on the priorities of the developer. Without a conflict of interest to settle beneath the surface, the only way for a mediator to maximize their own revenue is to maximize the revenue of the client.

That should be reported!

The reporting around ad revenue is largely vague, and suspiciously so. Any given publisher will have their IAP revenue stats to hand – as well as those of all their immediate rivals – so why is ad revenue any different? Because mediators need it to be. They can’t afford to let the mask slip and giving out anything beyond the most basic information is risky.

When dealing with a network-owned mediation service, developers will typically receive a top-level view of basic metrics like the number of impressions, eCPM, completion rate and net revenue. The figures provided will also show hikes in all the right places. Networks rely on their clients being satisfied with such results in isolation and, with no inside track on the mediation process, why wouldn’t they be? The whole sky looks blue from the foot of the well.

By nature, unbiased mediators operate a transparent model and with that comes openness. Anything they can see, you can request. It’s full disclosure vs. constructed snapshots through the keyhole.

The here and now

Happy to take advantage of their clients’ trust and diverted attention, network-owned mediation services have been getting away with hidden biases and foggy reporting for as long as they’ve existed. To all intents and purposes it’s insider trading and it’s going unchecked. Bringing this discussion into the mainstream and making developers aware of what goes on behind the curtain is crucial, especially as advertising becomes more and more important a part of the mobile gaming experience.

If you have any questions, about the contents of this piece or anything else, contact us at [email protected] and we’ll connect you to the relevant person.

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