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Mobile Display Advertising in 2017 ... Is it DEAD or NOT? (32)

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Mobile advertising has been driving the affiliate marketing industry for a couple years now, many of STM members made millions from it … and many still do. But while we still see PPV/POPs running strong, mobile Display (banners) took a huge nosedive – at least when it comes to the standard affiliate offers like sweeps, antivirus, PIN submits … the easy to convert offers we all love.

The reasons for this were pretty hard to identify, it happened pretty suddenly and nobody really had a definitive answer I'm afraid. However, I dedicated quite some time to figure out what happened and I think I was able to identify the main problems … so let me present them to you.

FIRST OF ALL, NOT ALL MOBILE DISPLAY IS DEAD!

Adwords, Bing, Facebook … even Adult … mobile display still works the same way on all of them. There was no significant performance drop on any of them. So if you promote legit/compliant products, you can still use regular mobile banners on google for example and you can expect pretty much the same performance as a year ago.

Adult traffic, that is based mostly around banners, also didn't see any special drop in performance. Certainly nothing that would indicate a format problem – there are ups and downs all the time of course, but the display format is still working well.

Facebook utilizes a number of display formats, it's not exactly banners, I know … but if anything, they grew last year, instead of going down.

This all indicates one thing, there is no problem with the “mobile banner” format itself or mobile advertising in general … it's somewhere else.

IT'S JUST THE MDSP'S THAT GOT SCREWED.

By talking to many affiliates and analyzing my own experience too, I came to the conclusion it was just the mDSPs that got affected – so networks like Avazu mDSP or Go2Mobi... Which indicates an isolated problem that only relates to the mDSP model.

Just to make sure everyone knows what I'm talking about, mDSP means : Mobile Demand Side Platform. DSPs provide access to large Ad Exchanges that do not normally work with small affiliates directly. So in order to buy traffic from a large AD exchange, you make a bid at a DSP and they will enter the auction for you. It's a similar concept to stock exchanges for example, where you need a broker to buy the stocks for you.

Ok, so we know that the problem is tied to the DSP model, but it's not a problem with the system itself as I found out … it's related to the largest AD exchange that accepts standard affiliate products and borderline creatives : SMAATO.

SO WHAT HAPPENED TO SMAATO?

Large % of the campaigns I had profitable in any DSP were bases on traffic from Smaato, the other exchanges either rejected my campaigns or didn't perform that well with the bids I wanted to pay. Smaato was different, they had huge volume and they were not too picky about what could fly in their network.

And from what I heard from other affiliates, I wasn't the only one. Looks like Smaato was driving large % of the business for any performance based affiliate marketer who focused on mobile display. That's why their changes affected such a large % of the AM world.

This all changed at some point, Smaato started to reject campaigns that were OK before, volume went down a lot, conversions vanished. At that point, large part of affiliates simply had to stop buying traffic from them and since they were the easiest AD exchange to work with (the only one for many), they also stopped buying from DSPs completely.

The situation is still the same today, the traffic is still there, you just need to bid much higher now to reach the same CTR's and also CVR's, which makes it very complicated to reach profit now. Because the traffic is way more expensive compared to last year.

There is only one possible reason for this that I can think of – Smaato wants to become more attractive for branding advertisers, so they are getting rid of more shady affiliate advertisers … and the fact that the bids are higher now indicates that they already have some large buyers or they made a special deal with someone to resell their traffic for higher prices than DSPs were able to.

SO WHAT NOW? IS IT GAME OVER FOR MOBILE DISPLAY ON DSPS?

From a large part yes, the gold rush seems to be over, at least under the current circumstances. Unless the rules get a bit less strict and whoever buys the traffic now, stops doing it.

As always thou, world isn't black and white, so there is still something you can do.

1. First of all, the problem seems to be tied to Smaato only, or from a LARGE part. So you can still use other Ad Exchanges, there is quite a few of them available. The problem is, majority of them is more strict, or misses the volume … Smaato was simply the best one in my opinion.

But still, I know about affiliates who run profitable campaigns on the other exchanges. For example Vortex (Amy) used some other exchanges in the previous round of 6WAMC and showed the students how to make profitable campaigns there … and it worked.

2. Even Smaato can still work, but it's quite a pain in the ass to optimize it. Let me tell you how to approach it.

The key is to realize that the good placements now require much higher bids to even enter the bidding for them. If you don't bid high enough, you won't get any traffic from them. At the same time, when bidding high, you are getting all the traffic from the poor spots and at a high price.

The only way to handle this is by using blacklists/whitelists. When working with a DSP, you don't want to have a winrate above certain %, because there is only so much traffic you want from a placement. Based on my tests, 25%-30% was the max I wanted to achieve, let's use it as a benchmark # for now.

So to put it in a simple way, you need to create several whitelist campaigns, that contain spots with similar winrates at a certain bid. The easiest way to do this is to have 1 testing campaign, where you will be raising the bid and watching the winrates. As soon as some placements reach 25%-30% winrate, you create a whitelist campaign for them and move them here. Then you blacklist these placements in the original campaign, raise the bid a bit and look for next batch of placements that reach the benchmark CTR … then create a whitelist campaign for those … and repeat. Once you have these groups narrowed down, you optimize them in a standard way.

This was the only way I was still able to make a profitable campaign with Smaato. However, the process was too labor intensive so I stopped doing it. It could still be an option for some affiliates thou, that's why I laid the method out.

SO HOW TO CONCLUDE THIS, IS MOBILE DISPLAY DEAD OR NOT?

It's not dead, let's just say that PART OF IT is hibernating There are still different Ad Exchanges you can try, the current problem seems to be related to Smaato from the most part, so it's not the end of the world. It's a large problem, since Smaato was the main source of traffic for many affiliates, but with the method I mentioned, you could still make it work. Whether it's worth the time is questionable, but that's up to you to decide.

On top of that, Google Display Network works fine and they have a fuckload of volume … so for compliant products, definitely test them out. There is also Bing, Facebook … many sources sell mobile display traffic, so the format itself is working and not going anywhere.

What is your experience guys? Do you agree with what I presented here or have a different experience? Let me know please.

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Probably the most useful post of 2017 I've been doing DSP before, was looking to put it in my portfolio again, but I guess I'll need to change my approach Thanks Matej!

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I've been planning to write for a while, it's an issue that affected a lot of people, so it needed to be addressed.

I'd love to hear from others who used to run on DSPs a lot though... there's still a chance I didn't get something in the right way.

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this is very insightful!

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Insightful article!
From my end, we're facing the same issues in terms of getting volume and maintaining profits from these DSPs.
So always on the lookout for new ones

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Definitely looks like MANY affiliates have been affected by this in one way or another

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Yep, profits have dropped quite a bit on my end.
The brand guys have alot of budget as well since its only Q1

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I don't think it's related to Q1 budgets, the problem started in summer last year for me.

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Definately not dead, i work in media buyers team and we make xx.xxx daily only in display advertising only with one affiliate. Smaato is not a panacea, you can try Sizmek(StrikeAd), myDSP, Turn, Getintent, AppNexus, Rubicon, Pocketmath, both of them are unavailable for majority of all medium or even some super high level media buyers. It's all depends how you build your relationship with mgmt mDSPs, how much will be your spending,etc...This is another story..)

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Indeed, it's not dead, just like I wrote in the article The problem is closely tied to the most affiliate friendly part of it. The traffic didn't go anywhere, it's just very hard to get it now for the regular affiliate ... and what you wrote just confirms it. Thanks for sharing your opinion!

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Any vertical you think should work with dsp? Or maybe better question - any vertical we should avoid on DSPs?

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now everythings dead!

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The traffic itself didn't really change, it's just more expensive now and harder to get and manage, so same offers as before could work. From what I've seen, PINs are still possible to get going for example. Antivirus should work too, but it's harder to get creatives approved now ...

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I hope a replacement can come up. While FB/Google are both great, there are many offers you simply can't run on those sites(or at least you'll need dozens of accts to sidestep bans).

What other exchanges compare to Smaato? You say they're the best but there are others, and I'm wondering are there any other affiliate-friendly alternatives? Will the pendulum ever swing back to allow for more affiliate offers in these exchanges?

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There are several exchanges to try, but I used to get the best results with smaato - they were the least picky from those with solid volume. So when smaato stopped working from me, I pretty much put my focus elsewhere... For whitehat stuff, mopub or mobfox had a lot of volume for example, at least when I was running there.

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Summer last year is when Google started switching on the caching, see my post here

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This crossed my mind when I first read your thread, but the problem is, as per your own words : "The result is: users from anywhere in the world are possibly being counted as US traffic!" But, most of the affiliates I talked with, including myself, were running traffic from other GEOs ... so I'm not sure if it could be related in any way.

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Yes, it's a fair comment. We are preparing some more tests on this.

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Would love to hear back once you are done with the testing, in case it affects worldwide GEOs, that would explain a lot of problems

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When I walked the Exhibit Hall at Affiliate Summit in Vegas in January, one thing that immediately stood out was the decline of mobile DSP's exhibiting...I'd say it was off by 60% from the prior two years. However, I was (pleasantly) shocked at the number of CPC Email vendors there, so it appears the "next big thing yet again" is CPC email, which I have been very, very pleased with.

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I can tell you why that is from my perspective, as a manager of a DSP (not just mobile) : the exchanges have hammered us and hammered us for having affiliates as clients.
Some affiliates have also not helped by cloaking even though they swore blind they would not. But we always caught that pretty quickly. The single biggest source of "time-suck" the last two years has been because of affiliate clients and their campaigns. Google, AdX, Rubicon, OpenX, the list goes on: they pressured and pressured us for stricter compliance than they would enforce had it not been an affiliate.
I've had ridiculous arguments with compliance teams about minutiae on a banner JPG.
Their preference has been Branding dollars. And because there suddenly was a LOT of branding dollars available, they had the luxury of having their pick. Affiliates bring annoying questions like "conversion pixels", "segmenting lists", tracking down top-converting placements and doing direct-deals thereby cutting out the exchange's commission. Why deal with them when brands, and large ad-agencies are showering you with cash...

And for the endless arguments, "alert emails", scrutinising questions from the exchanges, etc. we decided to withdraw from reaching out to the affiliate community. The stick became much bigger than the carrot.

On the other hand, some affiliates are like crack-addicts, ie: refusing to learn real marketing and just going for the swipe, cloak, high-payout, account-farming, repeat. Burning an AdWords account or farming FB accounts is not comparable to burning a seat on an ad-exchange, believe me. You get burned once and you're pretty much finished in this arena.


That sounds really interesting! I thought there was only LiveIntent that did that programmatically. Would you mind sharing some names of email CPC networks?
I'd like to reach out to them to see if we can add their inventory via OpenRTB protocol. Could be a cool new traffic source bundled into retargeting.

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As much as I hate to admit it, some affiliates are really not helping it. I prefer to run a clean ship, I never cloaked, but yeah ... not everyone shares my views on doing business ... maybe that's why I'm still around after almost 20 years while pretty much everyone who started at the same time as I did, is gone.

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Hi, I am new to the affiliate marketing game, how new? I just know what CPA meant last Thursday...and I just signed up for the STM account yesterday.

I was pointed to go for mobile marketing by using instructions on the famous "The Appetizer" thread since I have a small budget $3,000. The Appetizer specifically said to use Go2Mobi and the Smaato exchange.... now if that is now DEAD... do you guys have advice on what Newbies with a limited budget should start on so that at least I can learn how to split test, optimization, tracking, etc and still have a chance of success?? I recently had a new baby and lost my job at the same time, so this is my second act in life that I hope will work. Please help!

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The process you just described is something that happens with all direct response media (except direct mail), and has been happening since the beginning of direct response time. I think I’ve described the process in a previous post, but to recap, here’s what happens.

When new media emerges, the first people to test are direct marketers (affiliate marketing is a subset of direct marketing). Since the owners of the new media need cash and advertisers, they happily take direct marketers. If it’s good media, direct marketers renew, test, track, and refine. But all direct marketing is “schlocky” (because that’s what works) and after awhile, the owners, who now have cash and customers start to think it is beneath them.

Then they start to get image advertising clients with budgets they need to SPEND (not INVEST like we do), who care nothing about testing and tracking—they just want to “get their name out there.” Because most are from big companies (like Ford, Disney, etc.) they have big budgets and pretty ads that feed the egos of the owners. Soon enough, the owners decide they no longer need the direct marketers and regulate them out of existence. Happens in almost every new media, and it’s something every direct marketer should be aware of. Some media (such as email, direct mail, adult sites, etc) are more friendly to direct marketers (and stable), which is why it’s important to learn how to make them work. The same thing process I’ve described will happen to some Native ad networks too at some point, so beware.

As far as CPC email vendors, I know Mark Hurson of Vrume reps CPC Email lists, Matomy was at ASW and they do Yahoo and Hotmail CPC email, PCH Media (yep, Publisher’s Clearing House does CPC Email), as well as Has Traffic. If you guys want, I’ll dig up the specific business cards I got at ASW and post the contact info.

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Incredibly great sum up of the new media clock.

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Indeed, I've seen this happen a few times already, and it's not just traffic sources ... well written summary johna!

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Your best bet is to go with POP sources now, focus on 3G traffic and PIN submit offers. More info here: https://stmforum.com/forum/showthrea...o-promote-them

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PCH, yes please!

(I have reached out to HasTraffic, Matomy and Mark at Vrume. Would be great to offer these all in one consolidated UI.)

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PCH, yes please!

(I have reached out to HasTraffic, Matomy and Mark at Vrume. Would be great to offer these all in one consolidated UI.)

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Won't autobid on i.e. go2mobi or other DSPs do this for you? I thought part og the algo there was to bid to get a certain Win rate vs. the bidding landscape on a placement. Maybe Go2Mobi or other DSPs could comment?

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Autobid will usually just make more money for the network, I don't use them unless it's the only way.

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Is there a recent newbie-guide for display traffic?

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