Vertical is the New Horizontal: Innovative Ad Units & Scale
In their quest for new and creative monetization solutions, mobile platforms, such as messaging apps, constantly seek to introduce innovative ad units. The need to balance monetization with user experience has led to a flurry of new, heavily customized ad units. However, in most cases, this comes with a big tradeoff when it comes to scale.
If we look back on native’s adoption in the industry, scale was a challenge (and some may argue that it still is today). Like any new ad unit, initially it was traded primarily via direct channels. As demand grew, RTB exchanges seized the opportunity to trade these units at scale, but ended up facing the challenge of standardization. As every publisher or exchange offering native had a different approach, be it the vast differences in assets or the plethora of formats supported or not supported, this meant every integration required a great deal of effort, while the payoff remained unclear.
In order to reach true scale, and have a new ad format adopted across the board, standardization is key. Our past teaches us that an organization like the IAB or the MMA cooperates with one of the players who initially traded the format, using their implementations as the guideline for the new standards. This process is often time-consuming and as the mobile market moves at a faster pace, by the time the standards are set it’s likely there will already be a new ad format in town. Companies who seek to seize the opportunity need to create custom solutions to satisfy the market.
One of the more intriguing companies leading the charge in innovation is Snapchat with their Snap Ads (previously referred to as 3V ads – native, full screen, vertical video ad units). Snapchat reportedly surpassed Twitter with 150 million daily users and its young audience is very lucrative to marketers. In early June, Snapchat launched its new API for third-party advertisers, enabling them to build their own customized creatives, as well as buy and optimize ads on the platform. Encouraged by Snapchat’s success with the format, publishers such as The Washington Post, Hearst and even YouTube are now embracing the vertical video ad unit.
The shift from horizontal to vertical finally presents a solution to publishers using a vertical focused UI, who until now have had to sacrifice their user experience to enjoy the monetary benefits of video demand. These news and messaging properties on both mobile apps and mobile web now have the option to maintain the high eCPMs of video, while offering an experience that is more relevant for mobile. Additionally, there are also games and social networks that base their experience on vertical and can now implement video in a more natural fashion.
The question remains, will demand for vertical video stay confined within the walls of the Snapchat garden, just like native demand is concentrated on Facebook, or will it expand beyond to other publishers?
Assuming that demand for vertical video will be on the rise, we are left with the issue of control. Publishers want control over creative shown on their inventory. User experience is, and should be, a top priority for publishers. However, auditing every creative that will serve on your property is both timely and costly. If publishers wish to reach scale they will need to find sophisticated technical solutions.
Therefore, SSPs should seek to offer publishers these types of solutions that enable and encourage publishers to create engaging ad units to fit their needs. At the same time, SSP’s have the responsibility to advise caution as to the limitation such units have.