But despite some trends that were simply full of hype and no substance, like blockchain in AdTech, the enthusiasm surrounding retail media is backed by some very promising opportunities that are already being realized.

To sum up the various opportunities in retail media and the options retailers have when building a retail media network, our CEO, Piotr Banaszczyk, contributed to ExchangeWire’s Industry Review 2024.

Click here or on the image below to gain instant access to Piotr’s piece on retail media or visit ExchangeWire to download the full report.

AdTech

What Is Retail Media & Retail Media Networks (RMNs)?

Natalia Figas

Mar 23, 2023

AdTech

The Benefits of Retail Media for Retailers and Advertisers

Martyna Oświecimska, +1

Nov 06, 2023

Data & Privacy

Data Clean Rooms Explained: Q&A with Clearcode and Aqilliz [VIDEO]

Mike Sweeney

Feb 22, 2023

The post Should retailers rent, buy or build their retail media network (RMN)? appeared first on Clearcode.

In a recent video interview, Michael Sweeney, Head of Marketing at Clearcode, engaged in a conversation with Wiktoria Wójcik, the Co-Founder at inStreamly. This insightful dialogue delves into the intricacies of advertising within the game and live streaming realm, shedding light on the innovative strategies and opportunities that brands can leverage to enhance their outreach.

As brands navigate the dynamic landscape of game and live streaming platforms, Wiktoria Wójcik shares valuable insights into the evolving trends, challenges, and the unique potential that this advertising channel presents.

The Questions Covered In the Video

• What does inStreamly do?
• What’s the current state of game and live streaming?
• What are the main types of streamers?
• How difficult is it to be able to provide sponsorship on livestreams?
• Can it be considered as a form of advertising, or is it more similar to the types of sponsorship that you would generally see on a lot of YouTube creators?
• With the actual creative of the sponsorship, is that something that the brands generally come to you with already, or is that something that you work with them on to provide best practices? 
• What kind of ad targeting is available and what type of measurement data is also available to brands?
• What kind of information can brand see about how well their campaigns performed, etc.?
• What’s the general response from brands and do you work with brands that would be investing a lot in this, or are you starting to see some brands that are experimenting in this?
• The growth of game & live streaming and sponsorship within livestreaming over the next 5 or so years — what does that look like from your perspective, how do you see this channel growing and where will the growth come from?
• What are vstreamers and vtubers?

Below is the transcript from the video interview above.

Michael Sweeney: Hello everyone, my name is Michael Sweeney and I’m Head of Marketing here at Clearcode. 

In today’s video, I’m joined by Wiktoria Wójcik, who is the Co-Founder at inStreamly, and we’ll be talking about advertising inside game streaming platforms.

So Wiktoria, thank you so much for joining me today.

Wiktoria Wójcik: Yeah, thank you for inviting me and hello everyone.

Michael Sweeney: You’re very welcome. So before we jump to the questions, Wiktoria, just tell us a few words about yourself and what you guys do at inStreamly.

Wiktoria Wójcik: Sure. Hi, I’m Wiktoria, I’m a co-founder of inStreamly, one out of four co-founders. I had a background in, let’s say, gaming, live-streaming, esports. 

I was a streamer myself, then an esports host and interviewer, then worked in an esports organization and for a while I was also an expert in gaming marketing.

At inStreamly, what we do is, to put it simply, we help brands reach gamers in a way that those gamers appreciate and in the process we are helping gaming streamers earn on their passion. 

So we are making it easy for streamers that even have, like, 20 viewers to work with the top brands like Samsung, Netflix, or PlayStation.

Michael Sweeney: Excellent. So maybe just tell us a little bit more about the current state of game streaming, because you mentioned before yourself that you were involved in that, that’s your background. 

I personally don’t know a lot about game streaming, the only kind of association I have is with this Pewdiepie guy, I guess that’s, kind of, related. 

But just tell us a little bit about the actual game streaming landscape, what types of platforms are being used for streaming, and also what audiences are consuming the streams, etc., what does that look like?

Wiktoria Wójcik: Alright, so with game streaming and broadly, let’s say, start with livestreaming, so livestreaming is a huge market and basically at any platform, be it YouTube, or Instagram, or TikTok, you will see people streaming live. 

What we are focusing on is people who stream video games, or are streaming to the video games audience primarily. 

So in this case, we have, let’s say, in the Western world, because there’s also Asia, especially China that’s quite different, but the biggest player of course is Twitch and it has around 70% to 80% share of the market, depends on the year, depends on the month. 

Then we have YouTube, Youtube is, in my view, in the best position to win live streaming overall in the next few years.

Maybe not in gaming, maybe Twitch will stay and have their position in gaming, but in any other content category, the creators are already on YouTube, they do not need to move to Twitch or to anywhere else, but they can livestream. 

So I see a huge opportunity there.

And then we have a dark horse of this race, a new one, Kick platform that was created by…I don’t even know who created it, to be honest. 

It has some associations with a gambling platform, but is used as an alternative for Twitch with better split rates for subscriptions, so for fun support for the streamers, and a more loose approach to content moderation, which made it very interesting for streamers to go in and be more free with what they stream and how they stream. 

And it’s getting more and more traction. 

Then we have Trovo, Trovo is a platform that’s backed by Tencent and it has some popularity in, let’s say, Brazil, Latin America, and smaller countries around Europe. 

And we of course have Facebook, maybe it’s weird saving it for last, but Facebook had a very big push a couple of years ago. 

They were paying even streamers in Poland a lot of money to stream on the platform and basically everyone took the deal, got the payday, and once the contract finished they switched back to Twitch. 

So Facebook is revamping their livestreaming efforts, they are quite popular as livestreaming platform in Asia, especially Southeast Asia, their live streaming on Facebook is very strong, but in Europe, we’ll still be talking, in Europe, in the United States especially, it’s going to be Twitch, then nothing for a while, and then we can talk about YouTube, and maybe Kick as the rest of the platforms.

Michael Sweeney: Cool, very interesting. So you mentioned a moment ago about the streaming of live events, so I guess there’s, kind of, maybe, let’s say, two different categories.

You’ve got the game streamers, which as you said, kind of, use Twitch as the platform, and then you’ve got regular content creators that create lots of different content about different things, but incorporate livestreaming into that content production, right. 

Is that, kind of, how it looks?

Wiktoria Wójcik: Yeah, I would say the split is very, very concrete. And I say those normal content creators, for them livestreaming is more of a tool to connect with the audience. 

Like a lot of personalities, for example, BLACKPINK use livestreaming to just seem more human and to connect with the viewers. 

When we are talking about gaming livestreaming, I would lie if I said that all that gaming streamers do is stream games, because it’s not true. 

If you go on Twitch and see what’s the most popular, most watched category within the last three years, the last month, the last week, it’s always gonna be just chatting, so it’s nothing to do with games, but the audience is still the same. 

The streamer is the same streamer who will be on just chatting, just chatting with the chat for an hour, and then go stream a game, or two, or another game.

And it’s still gonna be a gaming audience, gaming livestreaming, even if the content is not gaming at the moment.

So for example, when I was a streamer I was streaming mainly League of Legends and let’s be honest, nobody watched me for League of Legends content because I was a very, very bad player. 

People watched me for my personality and this is what they do for all the streamers. They choose the game they prefer as a context, but watch a streamer for their personality, for how entertaining, fun, interesting they are.

I had, like, 25 viewers, concurrent viewers, when streaming League of Legends and one day I had to prepare dinner and I decided okay, I’m just gonna go on stream and peel potatoes and make cucumber salad, just on the stream, just to talk with people, and pass the time while I’m making the dinner. 

And I had 80 people watching me peel potatoes and talk about religion, philosophy, culture, etc., and most of those people were people who usually watch me play games. 

And it wasn’t gaming content, but still the audience, the platform, the context was much more gaming driven than if I were to stream the same thing, for example, on TikTok. 

So this is why I say that Twitch is right now a primarily gaming, or with a gaming audience in mind, platform, and YouTube is more positioned to take livestreaming as a medium more broadly.

Michael Sweeney: Yeah, that’s a super interesting insight because, yeah, I don’t have a lot of knowledge about the whole streaming thing, whether it’s game streaming or livestreaming, but, yeah, I always, kind of, thought that it was essentially people watch these streams because they want to see people play their games, right. 

But as you said, there’s different ways that people can be entertained through these, but as you said, the audience, generally, is still going to be people who watch game streams, but it’s more about the person’s personality rather than, I guess, the actual game because those people could go and play themselves.

Wiktoria Wójcik: Yeah, we even did a research on over a couple of thousand stream viewers and 85% of them said the reason they watch streams is because they simply like the streamer. 

And I like this comparison to going bowling with your friends. So you choose to go bowling because bowling is better than kayaking. 

You don’t like kayaking, you’ll go bowling with your friends, but it’s not like you are oh God, I need to go bowling, I will play bowling, this is so great. 

No, you’re, like, okay, let’s go bowling, let’s have fun together as a friend group in the context of bowling. So it’s the same with choosing a stream to watch, a streamer to watch.

Of course I’m gonna choose the League of Legends category, because I prefer League of Legends over CS:GO the same way I prefer bowling over kayaking, but then which streamer I chose, who I interact with, how much time I spend there, it’s more about the person and the game is just the context.

Of course, there will be people who are watched because they are the best at the game. 

There are a couple of streamers, there’s a couple of them in each category and they are so good and their content is about them being good and maybe showing some knowledge about the game. 

And of course it’s better to get and it’s easier to become a popular streamer if you are very good at games because, let’s be honest, it’s very frustrating to watch somebody lose all the time. 

Of course this can be fun sometimes, but usually the better you play, the more likely you will have people watch you.

Michael Sweeney: Yeah, that’s a super cool analogy, the way you explained it. 

I guess, I don’t know, when you were saying that, I thought maybe karaoke is also another example where a lot of people don’t say oh, I need to go and sing in a bar, but you do it because you’re with your friends as well, but yeah, the bowling analogy is super interesting, so it definitely makes a lot of sense. 

So let’s maybe talk a little bit about the advertising, or as you said it’s more about sponsorship and branded placements inside game streams, and livestreams, etc., so first of all, how does that, kind of, look?

Because we’ve got, you mentioned the major platforms like Twitch, YouTube, Facebook even, these are all walled gardens, right, closed off systems essentially. 

So let’s maybe, kind of, start with that, how does a company like inStreamly get into that, is that a fairly difficult thing, is it like you have to set up some kind of business relationship with these platforms, and then there’s some, sort of, API or something like that? 

How difficult is it, without going too much into sensitive, confidential information, but how difficult is it to be able to provide sponsorship on livestreams on these platforms?

Wiktoria Wójcik: So maybe I’ll explain briefly what we do and answer your questions. In a sense, we deal directly with the streamers and we may make dealing with the streamers directly just easier. 

So in the past, if you were to even place just a stupid logo on a stream, you had to contact the streamer, agree on the rate, sign an agreement, then negotiate how long it’s gonna be seen and if they could turn off the logo when they are playing a certain game, because the brand doesn’t want to be associated with the game, and then you have to get the reporting, and pay the money. 

There’s a lot of steps only with one streamer, so if you are thinking about working with 10 or 20 streamers, this becomes a full-time job for one person just to set it up. 

And it meant that most of the brand appearances within streams were only with the top biggest streamers and 99.9% of streamers on Twitch have less than 100 concurrent viewers so they have people who watch them for several hours a day and they are very engaged, they are in contact with them. 

But those streamers cannot even dream about working with those big brands. 

So in short, we make it very easy to have a brand appear within a stream, and then to measure how many people have seen it, to measure how many people clicked the link and the CTA in chat. 

And then we can go fancy, so have a different kind of messaging depending on what game is streamed, or even react to what happens in the streamed game and say when a streamer is winning, then the brand appears saying this one is for the winner and drink this drink if you are a winner. 

And because we are constantly in conversation with the data of what’s happening in the stream, but in the end, the content that we place within the stream, the brand placement, brand advertising is inside the streamer’s content before it even hits the platform. 

So it’s unblockable by Adblocks and it’s more similar to how streamers worked with brands before, or, for example, how Youtubers work with brands right now. 

So you have something directly in the content. 

So we are dealing, like we made something that was very manual, very hard to do with many streamers, very tedious, and in the end a lot of times boring, or just simple, into more interactive, more interesting way that also helps us and makes it possible to work with, let’s say, 2000 streamers in one campaign. 

Usually, within one day of a campaign, we will have around 500 streamers participating in it. 

When it comes to working with the platforms, of course we need some kind of automation and connection to the data. 

So of course, we gather from the Twitch API, we gather the data about people watching the stream and we gather the data about what’s happening in the chart etc., but the whole dealing is more on the relationship between streamer and the brand and us facilitating this relationship than dealing with the platform. 

In a way, when a streamer streams to YouTube and Twitch at the same time, we just gather data from those two platforms and the streamer gets paid for both of them. 

And we are looking to expand to other streaming platforms within this year, I hope so. We are not in a hurry because those two platforms cover the majority of the market, but we are in good talks to get more platforms on board.

Michael Sweeney: Perfect. So just touching on that advertising part again as well, because you mentioned that, I mean maybe this is gonna be another question. 

Do you consider this as a form of advertising, or is it more similar to, as you said, the types of sponsorship that you would generally see on a lot of YouTube creators? 

What does the kind of format look like, because I guess it’s not, like, a typical banner ad inside a game stream, right, it’s more of, as you said, a sponsorship type thing.

So what does the format, kind of, look like for the sponsorships and branded placements?

Wiktoria Wójcik: Okay, so the visual format is in a form of animation that can change depending on streamed game, or what’s written in the chat, etc., the format itself does not impact whether you perceive it as an advertising or a sponsorship. 

The relationship between the streamer and the brand does. 

So with advertising, most of the time, in a sense of ads on YouTube or anywhere else on the Internet, you don’t have much control what’s visible in your content.

In our case, every streamer chooses the campaigns to join, they see what’s the campaign about, what brand, how it looks like, and they have a choice to join it to represent the brand or not. 

And the second thing is, we call it sponsorships because for the past 10 years of live streaming, every time a brand appears within a stream, even if it was just a logo, even if it was just a piece of text, it was still called a sponsorship because it was directly in the content, it was chosen, embedded by the streamer. 

And we come from this pedigree, we want the streamers to perceive that they have a relationship with the brand, and also responsibility towards the brand they are representing. 

They have to behave in a certain way and they have to behave a certain way to the brand and of course the viewers also know it, so the viewers perceive those brands as sponsors, as people who help their favorite creators earn on their passion instead of just another ad that’s intrusive, because it’s also, it takes a smaller part of the stream, so it also is just more interesting for the viewers and less intrusive. 

And that’s why we call it sponsorships. Of course in some understanding, sponsorship is similar to sponsoring a football team, and this is quite far away.

So we call ourselves that we sit somewhere in the middle between influencer marketing, because it’s thousands of micro influencers choosing to work with a brand, digital media, because it’s measurable, you can run a/b tests, you can get data about every single moment when the brand was visible and we work on this data to optimize those campaigns. 

And from the third site, we are a bit like TV, so we are baked into the content, unblockable by ad blocks, the targeting is also content, not viewer based. 

And in the end, we also allow for much more creativity within the format than the standard mold of, let’s say, digital media has.

Michael Sweeney: Excellent, cool. I’ve got a couple of questions regarding the ad targeting and measurement part as well because I think that’s super important for brands, it’s probably one of things they ask you about all the time. 

But just with the actual creative of the sponsorship and that kind of thing, is that something that the brands generally come to you with already, or is that something that you work with them on to, kind of, provide best practices? 

Is it, like, a collaborative process between yourself, the brands, and even some of the streamers, or how does that kind of process look?

Wiktoria Wójcik: Yeah, it’s a new format in an area that’s not very well understood and very well known by marketers. 

So of course, we can work and with some brands, we work in a way that they deliver the creative, the artwork, maybe just get a feedback from us and that’s all. 

And with some brands, we help them craft whole campaigns, or just an idea for getting their, let’s say, TV ad and digital messaging and just molding it in a way that it suits livestreaming and gaming. 

So, we do those things because we know that it’s needed, that the help is still needed and appreciated. And we also expand into even helping brands with their overarching gaming marketing strategy, and bigger things, like even creating maps inside games like Roblox and Fortnite. 

So basically, we are able to branch out but it’s not needed, so if somebody just gets the technical and, let’s say, creative guidelines for the artwork, they can do it on their own and it’s not a problem for us. 

And in the future probably it’s gonna just be more and more brands. 

Usually, it’s like the first time we do it, the second time it’s a collaborative thing, and the third time the brand and their agency are able to do it on their own.

Michael Sweeney: Perfect. So, let’s maybe go back to those points about ad targeting and measurement that you mentioned before. 

So what does that look like in the streaming environment, what kind of ad targeting is available and what type of measurement data is also available to brands?

Wiktoria Wójcik: So when it comes to targeting, we are able to target per streamer, so we can exclude some streamers if the brand has has a blacklist or anything. 

We can target certain hours within a day and also change the messaging. 

So for example, if you have a convenience store, in the morning you might want to promote your coffee machine, and then in the evening, you want to maybe promote some lunch options. 

And then we can also target by content. 

So for example, you can exclude certain games. There are brands that really want to exclude every game that has realistic shooting in it, and we make sure that the brand will not be visible in those categories. 

And then we can also target by demographics in a sense that we gather demographics from the streamers, we are able to say okay, those streamers and this type of content will reach mostly older audiences, this type younger audiences, and we are able to skew the targeting one way or the other. 

So, we are also able to segment per game in a sense or pay per game category. 

If you’re a brand running a competition around League of Legends, you probably only want to promote in the League of Legends category and this is also possible.

Michael Sweeney: Perfect, excellent. And what about the measurement data, like you mentioned before you’ve got analytics and that kind of stuff, so what kind of information can brands see about how well their campaigns performed, etc.?

Wiktoria Wójcik: So they get every data. I’d say that wasn’t previously possible and just, like, manual sponsoring. 

So they get overall data of the campaign, the number of views, number of clicks, number of unique viewers, category streamed, unique brand appearances, and then they get data per each category. 

So they get data per streamer, they can view each streamer, the number of views of each streamer, and each time the streamer displayed the brand placement. 

So they can go really in-depth, and also see the CTRs of certain streamers and identify the, for example, biggest brand promoters for the future collaborations. 

Then you have categories, so you can see which messaging performed in which category, or just overall the campaign. So you have the clicks, number of views, the CTR, all this data for each category. 

And then if you have multiple artworks, for example if you want to do A/B tests, we also have this data for every time an artwork is shown, we know who had shown it, how many viewers there were, how many people clicked, unique viewers of that, what category was streamed, etc., so there is a lot of granular data. 

We also provide demographics data, the demographics data has one issue that it’s driven by Google Analytics and it means that it’s not covering people under 18, which is a lot of the category, but still it gives you a pretty good overview of who was the main major audience that you reached. 

So this is available in a live dashboard if it’s needed. And we also provide a direct report at the end, so we create a presentation with all the major data, and also with our recommendations for future campaigns, how to optimize it. 

So we’ve done, like, 500 campaigns and it means that based on this humongous amount of data, we are able to now decide where and how to set up a campaign in a way that it just delivers the best results.

Michael Sweeney: Excellent, sounds cool. So let’s talk about the brand side of things for now.

Like beside from the advertisers, brands that want to show their sponsorships, for example, on streaming, game streaming, etc., so what’s the general response from brands and do you guys work with brands that would be investing a lot in this, or are you starting to see some brands that are experimenting in this? 

What does that, kind of, look like from the brand perspective?

Wiktoria Wójcik: For most of the brands, the first campaign is always an experiment, so we start slow. And then we try to become a part of the media plan every time there is a Gen Z targeted campaign, or young people targeted campaign. 

It doesn’t even have to be targeted to gamers, because we help to tailor your back to school messaging in a way that it will fit within this game in context. 

For brands, for sure sometimes it’s hard to place us, because we are not entirely influencer marketing, not entirely digital media. 

In a sense, you can still put us in the Excel between Facebook and Google and see the measurements, the CTRs, the views, the CPV, etc., like we can be in this Excel, but still we are more in the non standard category. 

So we usually either work directly with brand marketers, people who care about brands going into those new places, reaching those gamers, and then with them we just go to their media agencies to distribute it. 

And with some media agencies, we have worked for over 3 years now that we are just a part of the media plan every time there is a Gen Z gaming angle within a campaign. 

So we’re then, it goes very, very quick and for the brands we are just a channel that’s fitting in this hole that was not filled before, especially in a media sense. 

And for brands, I’d say that they get excited with the creative opportunities that we bring. For example, ability to react to what happens in the game, or ability to react to what people type in a chat. 

Right now, we are, just in a week, releasing a campaign where we’ll be reacting to what the streamer says, so a voice recognition campaign. 

And we bring those opportunities and from this you can build up very, very interesting campaigns that are going much further than just saying you’re just running media within a stream. 

And I think this gets people excited, this gets people excited also because they know that esports is in a very rough spot, like a lot of sponsors withdrew, are checking the results and they are searching for a way to fill this void to reach those gamers. 

Influencer marketing got expensive and it was very expensive in streams, because it was not really well measured, it was very rare, because you had maybe 40 streamers on a given market and then they were too small to work with them, and then we come and unlock it. 

So it’s really fun, I’m not saying it’s very easy to sell, I’m saying it’s very easy to get people excited, but to sell, people have to make this effort to go out of their way, out of their standard media, to be willing to do something different. 

Once they do and they figure out it’s quite easy to do so, they stick with us, but the first moment, and the push, and the relationship, and the explanation, and knowledge that needs to be shared to have it done, it’s a pain point for us, so if there is a very innovative marketer that likes to do things differently, we might be a great fit to work with you.

Michael Sweeney: Perfect. Yeah, I mean I think that’s a great point as well, because I think for marketers, brand managers, etc., I think a lot of the time they, kind of, stick to the traditional channels, right, the ones that they know and have used many, many times. 

But I think it all comes down to the audience, ultimately, right, is finding the audience regardless of where they are, you know. 

And I think with streaming, it’s, kind of, like a, you probably, I wouldn’t say guarantee, but you, kind of, know that the audience are all going to be pretty similar, right. 

Like they’re all gonna have similar interests to a certain point, right. It’s not, like, when you’re watching TV, there’s lots of different people that could be watching the same TV program, for example. 

But with streaming, it’s a little bit more of a definition of the audiences maybe in some way, I guess, with that. 

So I think there’s certainly a lot of potential that it’s, kind of, maybe in a way similar to, as you mentioned before, some other kind of channels.

Like influencer marketing you mentioned, even maybe in-game advertising where, because that’s a fairly big channel as well now, there’s a bit more investment in that, showing actual ads on digital billboards, for example. 

But that’s a little bit of a different format to what you guys are doing, the sponsorship part is a little bit more, you’re probably gonna get a bit more awareness of the brand and it may be a bit easier to measure as well. 

So it definitely sounds like a very interesting channel that, as you said, brands should certainly explore, and experiment with as well. 

Because it’s all about experimentation, you’re not going to know if it works until you try, basically.

Wiktoria Wójcik: Yeah, I think that the biggest USP that we deliver is that we reach this audience that you cannot reach in any other way, because they either play games, or they watch gaming content and they use adblock, so good luck reaching them. 

We are inside the content that they watch and it’s unblockable by adblocks, so this is the way we solve it for sure.

Michael Sweeney: Yeah, definitely a very strong selling point. Excellent. 

The last question I have is about the growth of game streaming, and sponsorship within livestreaming as well, over the next, sort of, 5 or so years. 

So what does that kind of look like from your perspective, how do you see this channel growing and where will the growth come from? 

For example, will it be, as you said, about educating more brands about the potential and the advantages of this channel and the possibilities for them, or will it come from somewhere else? 

What does the, kind of, growth look like and where will it come from over the next, sort of, 5 or so years, let’s say?

Wiktoria Wójcik: So maybe I’ll start with how livestreaming will evolve, because I think brands always follow the eyeballs and the eyeballs will follow the growth of livestreaming. 

So first, I think we’ll get more worth between the platforms. I think YouTube overslept, they could have been much bigger in the last five years and they did not do much to address some pain points. 

They did, actually, last year do a lot of things to be on par feature wise with Twitch. I still believe in a sense that the Twitch monopoly will fall. 

It’s gonna be Kick, it’s gonna be YouTube, maybe multiple platforms, maybe more niche platforms for other kinds of live streaming, but we’ll get there. 

The second thing is the future of creators collectives, or like teams. 

We had this huge craze of esports teams that basically were entertainment companies, because the part of esports players playing the game, the best in the world, there were also streamers and content creators and a lot of it was based on getting to people with the content, with the entertainment value. 

So right now, those creators are skipping just doing the esports part, and they are doing just creator teams, working together on content, creating distribution channels, their own events etc., great example is OTK, a group of streamers led by Asmongold, one of the biggest streamers in the world. 

And they are doing streams together, they are doing their own indie game showcase events, other events, and they are also, right now, creating a publishing company for video games that will help market those games by working with the creators they have in this talent collective. 

And they, of course, are doing branded events, etc., a lot of content for brands, because this is how you earn money.

So we’ll see more of those teams, and also not only from big creators but also small creators, they are goning to team up. 

And technology, I think the rise of vtubers, vstreamers in the past couple of years. Last year, I think, at some point in the top 10 most watched streamers, there were 3 or 4 vtubers, vstreamers streaming. 

So it’s just gonna get bigger and I think brands will need to follow that. 

So we will see brands moving their budgets into either bespoke events created together with the creators, because those creators understand their audiences, or just overall getting into livestreaming, because it’s gonna be the place where people like celebrities stream to get in touch with their audiences. 

The second thing we will get, of course, these vtubers, more brands trying to make their own vtubers, more brands failing on doing that, and maybe sponsoring some vtubers and going into those virtual spaces and creating instead of events that take place offline, they would create, like, virtual places and online events with those vstreamers. 

Maybe we’ll see that. 

And the third thing, I think they will just follow the audiences, so I don’t see any way for livestreaming to really go down. 

I don’t think gaming, livestreaming, especially in the main market, the Western market, will grow much higher. 

Of course we have India, of course we have Latin America where there is potential to bring in more people.

And fun fact, in India, you have multiple localized livestream platforms and Twitch isn’t even in the top 3, I think, of the most popular gaming livestreaming platforms. 

So we’ll see a bit more fragmentation on the market and it’s gonna be a bit harder for brands to just be on top of what’s happening, but on the other hand, it’s gonna get so normal that you are visible in games, visible in livestreams

Like within five years, if somebody goes on a conference, marketing conference, and makes a presentation talking to marketers like oh, gaming is so big, gaming is so great, I hope that everyone leaves the room because this is nothing new. 

And in five years, I hope that we finally will get past the point of talking about oh, gaming is new and important and we’ll get to the point of okay, so how do we actually do gaming. 

And I hope that we, at inStremely, can be the answer to that.

Michael Sweeney: Excellent, super interesting insights there. Just a couple of quick questions there, you mentioned vstreamers and vtubers, is that right, what are they?

Wiktoria Wójcik: Yes, so you have a 2D or 3D avatar. In the case of 2D it’s most likely anime-like avatar, 3D can be 3D avatars, sometimes very human-like and sometimes just more out there. 

And this is basically streamers streaming as this avatar, of course, using their voice and the movement is tracked. 

But what viewers see on the stream is, of course, the gameplay, what’s happening, but the persona is just a drawing or just an avatar.

Michael Sweeney: Wow, so that’s, kind of, I guess, getting into the Metaverse world, or the virtual world as you said before, right?

Wiktoria Wójcik: I’d say yes and no in a sense that I always loved that the word that marketers love, so avatars, is never used by gamers. I don’t hear anybody saying oh, I want to dress my avatar up, like it’s not a word. 

But in a sense yes, I think we are getting more and more agreeable with the vision that our digital persona and a digital, let’s say, avatar is a good representation of who we are and we can be represented by that. We are getting just more and more adjusted that this can be true.

And this is why people don’t mind watching cute anime characters that also can get more fancy, be better dressed, etc., than a streamer every day could be. 

And on the other hand, for the streamers it’s just very easy to be a character, because you have a barrier between you and the viewers. You are acting as a character and you don’t always have to be you there. 

And when I was streaming, you are streaming for four hours a day, every day, at least four hours, and it’s very, very hard on you, especially as people are seeing you, commenting on your looks, commenting on what you do, how you do things, etc., and having this barrier of having an avatar, something that can be an act, it just lets you get more space. 

And in the long term, I think it’s just easier to stream in this way. 

So this is why people are watching vstreamers and I think it’s just very interesting, it’s fun. It would be very, very cringe to watch a girl be like hello everyone, I’m so cute. 

It’s very hard to act this way, but if I’m a cute character with bunny ears, maybe this can work, maybe I could do it.

Michael Sweeney: Yeah, perfect. You did a very good voice then as well, it’s very convincing.

Wiktoria Wójcik: You will never know if I’m a vstreamer, this is the point.

Michael Sweeney: I’ll have to look out for that voice.

Wiktoria Wójcik: I can be a businesswoman during the day and a bunny girl vstreamer during the night and nobody will know. And this is the appeal.

Michael Sweeney: A lot of appeal there, definitely. So just last question, you mentioned before about the word avatars mainly used by marketers, right. 

So what do vstreamers refer to as, do they simply just refer to them as their digital self?

Wiktoria Wójcik: There is a name, but I don’t remember, but usually it’s a character, like avatar is used in a technical term, but in a sense that people are talking about oh, every 13 year old girl has their own avatar and we use avatars in games like Fortnite. 

You don’t really talk about that, your skins for your character, you dress up, but it’s never, like, an avatar is a thing.

It’s just a joke, of course people will use it, I’m not saying that nobody uses it, but in a sense that I will hear this word more often on marketing conferences instead of in the game.

Michael Sweeney: Yeah, so just some differences between the lingo between the marketers and the people that are streaming the games, etc.

Wiktoria Wójcik: Yeah.

Michael Sweeney: Yeah, perfect, excellent. Wiktoria, that’s all the questions I had for today, was there anything else you wanted to add before we finish?

Wiktoria Wójcik: No, I think not. Maybe I will just leave you with a little thing to think about because gaming, of course, you might think: future, not the future, whatever. 

I’d say that right now, the next social media will be a game and already is because average TikTok viewer spends on TikTok around 90 minutes a day and an average Roblox player spends on Roblox average 150 minutes per day, and it’s also because they spend time with their friends there. 

So of course, you can miss out on games and don’t care about games now, but my kids for sure will not be using their phone to catch up with their friends. 

Most of the time, they will be in some kind of game and I believe that in a sense, in 10 years it’s gonna be very, very hard to distinguish what’s a game and what’s on the game, what’s a platform, what’s a movie, and what kind of entertainment part we are in. 

So even if it’s not your area, I would pay attention if I were you, because things, especially for the younger generations, are changing really fast and you’ll be surprised how big of a deal gaming is in being a part of their lives.

Michael Sweeney: Excellent way to finish the conversation, Wiktoria, some really great thoughts there. So, yeah, as I mentioned, that’s all the questions I have for today. 

If anyone wants to get in contact with inStreamly, I’ll leave a link to your website below in the description, but I think your website is just instreamly.com, right? I think it’s as simple as that. Yeah, so you can head over there and check it out.

Wiktoria Wójcik: Yeah, you can catch me also on LinkedIn. I share knowledge about gaming, gaming marketing, and just reaching Gen Z. 

So give me a follow on LinkedIn, it’s Wiktoria Wójcik, you will find the name in the title, so feel free to reach out to me if you ever have any questions about marketing to gamers.

Michael Sweeney: Perfect, excellent. I’ll leave a link as well to your LinkedIn profile as well, so people can click on that in the description as well. 

So yeah Wiktoria, thank you so much for that, that was a fantastic conversation. I learned a lot about the world of game streaming and livestreaming, so thank you so much for your time today.

Wiktoria Wójcik: Alright, thank you very much and have a good one.

AdTech

What Is In-Game Advertising and How Does It Work?

Mike Sweeney, +1

Jan 13, 2022

AdTech

What Are The Benefits of In-Game Advertising?

Paulina Zawiślak, +1

Mar 03, 2023

AdTech

Advertising Inside Game and Live Streaming Platforms: Q&A With Clearcode and inStreamly

Mike Sweeney

Dec 18, 2023

The post <strong>Advertising Inside Game and Live Streaming Platforms: Q&A With Clearcode and inStreamly</strong> appeared first on Clearcode.

That’s where Clearcode comes in.

As a specialized software development company focused on AdTech and MarTech solutions, we bring to the table a dedicated team equipped with the necessary skills, insights, and experience.

Our goal is not just to provide you with the technical resources but to be a reliable partner in navigating the complexities of software development for advertising and marketing.

We understand the hurdles you face, and our team is here to provide stability, specialized skills, and support throughout the process.

Learn more about us, our approach, and the companies we work with by checking out our latest video:

Below is the transcript from the video interview above.

Michael Sweeney: Hello everyone, my name is Michael Sweeney and I’m Head of Marketing here at Clearcode. And in today’s video, I’m joined by my colleague and good friend Radek.

Radosław Kostecki: Thanks for having me, Mike.

Michael Sweeney: No problem at all, and Radek is Head of Business Development here. So Radek, just to start things off, just tell us a little bit about yourself and what you do here at Clearcode.

Radosław Kostecki: Sure. So yeah, Radosław, Head of Business Development, everyone calls me Rado. I’m responsible for managing the whole pipeline at Clearcode, so also talking with different potential customers, making sure that we’re in line, and we are finding the opportunities, and talking with different companies in the industry about AdTech development.

Which types of companies does Clearcode work with?

Radosław Kostecki: So essentially, mainly, these are not only the typical AdTech & MarTech vendors, like the companies that already have some existing stock, either a DSP, SSP, or any other system and we help them with our development expertise, but also publishers, big publishers especially, media agencies.

Also the non-typical verticals like retail media is quite common nowadays, and telco industry, even banking companies are looking more and more towards even marketing technology, so the range is quite wide.

The only thing is which is common is the AdTech&MarTech, this is what we specialise in, what we do.

What industries do our clients come from?

Radosław Kostecki: I’d say that all the companies that either want to join the AdTech world because they’re obviously some companies that are already on the market for many years, however there are companies with potential to become an AdTech company in some sense.

For example, telecommunication industry, retail media, which is very, nowadays, common, many companies are trying to get use of the first party data or monetize what they have at the moment, either the inventory ad spaces that they can also fulfil.

And if the scale is huge enough, big enough, it’s definitely a use case to actually build, have their own IP, own system that they can leverage.

Michael Sweeney: Yeah, definitely. And I guess going back 5 years ago when we looked at the types of companies that we’d work with and the industries they represent, I guess a lot of that it’s changed quite a bit, right.

It’s, kind of, moved with the times, as you said before there’s a lot happening with retail media, streaming, telcos as well.

So do you notice that change as well, that we’re, kind of, moving with the industry, I guess, and everything that’s happening there?

Radosław Kostecki: Yeah, you know, Mike, I think that one of the main changes in the industry is obviously the cookieless future and this also creates an opportunity for others to either have their own systems or create other workarounds apart from the cookies that were the base of the industry.

But still, there’s a lot of potential in terms of the company that thinks about their own IP and even the telco industry nowadays, like in the European market, they thought about the unified identification, for example, of the users.

And this creates a lot of demand for technology, for advertising technology especially, due to the fact that many of them are using or have a very complex ecosystem already in place and in order to, like, properly add the system into the existing part.

It can be a challenge using the 3rd party providers, and then there’s a lot of potential to actually create a new piece of the stack.

What problems do we help our clients solve?

Radosław Kostecki: So as I told you about the 3rd party providers, there’s, like, a lot of 3rd party white label or 3rd party providers that they charge you for the traffic or depending on the traffic you just get, like, a monthly fee, or a yearly fee.

And if the scale is big enough, there’s actually a use case to think about to cut the middleman and have the actual technologies their own, and the only thing to take into account then is just the development cost, infrastructure cost, either AWS, Azure, GCP, or whatever cloud provider is required.

This might be also an investment that they can save in the long run, to save actually the money.

The other part is the actual ownership and privacy concerns when you use the 3rd party provider. You actually need to share the data with the 3rd party provider, which for many companies, especially that cares about the 1st party data that they own, they cover, there’s like a pushback to actually use the white label provider.

And yeah, so those type of conversations are quite often the beginning of the journey when we talk with the customers, when there’s like a build versus buy, and when there’s, like, a build use case, Clearcode actually can help and navigate how to actually develop the system.

Why do companies decide to build custom software vs renting or buying existing AdTech platforms?

Radosław Kostecki: The acquisition part is very interesting and the whole AdTech market is a very dynamic space, so as we’ve seen last time even AT&T acquisition, or AppNexus transforming into Xandr, got acquired by Microsoft.

Those changes are constant in the AdTech industry and if someone decides to acquire the system, on the one side okay, this is an existing system with integration already in place, with even sometimes business relationship with the potential customers, on the other hand technologically how to actually adjust the acquired system to the ecosystem that is already in place, this is a challenge for many companies.

This is, like, challenging due to the actually work that needs to be done anyway. It can eventually, in the long run, even create much more problems and much more challenges related to customization and even rewriting some parts of the system to make sure that the scale is handled properly.

This is one of the reasons that someone even if thought about acquisition 1st, decides, in the long run, to actually build, yeah.

Michael Sweeney: Yeah, definitely. I noticed that you’ve touched on this a second ago as well, about the telcos with AppNexus being acquired by AT&T a few years ago.

And there are many examples of telcos that acquired, you know, AdTech companies, and then tried to, kind of, implement them into their existing business to, you know, grow, to build an advertising business, essentially.

But a lot of those acquisitions didn’t work out and as we saw, a lot of those telcos ended up selling that AdTech company, or that platform, often at a loss.

I guess the whole telco situation with AdTech is quite an interesting one, because especially when you look at how some other companies these days are getting into advertising, right, it’s a very different situation, they’re taking a different path with it.

Because with telcos, a lot of them went down the acquisition path, whereas companies like Uber, you know, some of the other super apps, Instacart, DoorDash, etc., a lot of those are building the software in-house themselves, right.

So they’re not going down the acquisition path, they’re focusing on the actual building part and it’ll be interesting to see how that works out because with the acquisition path, as you said, there’s a lot of risk, I guess, especially if, you know, not only the technical risk which you said as well, which is can be quite hard to overcome, a lot of technical challenges with that, but also in the business side as well.

You’re spending hundreds of millions of dollars on something, you know, you’ve really got to make sure you’ve got a proper plan in place.

And the question is whether you’re actually wanting just the tech, or the existing business as well, right, because companies like AppNexus were existing, huge businesses, right, they were generating revenue.

So yeah, it’s quite interesting to see what happened with the telco situation with AdTech and obviously how it’s different with a lot of other companies as well.

Radosław Kostecki: Indeed, Mike. I think that even the conversations, ongoing conversations, that we have, not only the customers from the industry, but also the customers, potential leads that thought about building the systems, when you look at their ecosystems, what they’re struggling with, even the legacy systems or they have such complexity that is challenging for them to actually narrow, even on the business level, narrow properly the strategy.

And Clearcode not only develops the system, which is the end goal, but obviously also the strategy is crucial to make sure that this is in line with what the company wants.

Obviously the business details are the ones that the customer has the biggest input on, but we can always address, based on our past experiences, also givethe value added.

Those conversations are very interesting and this is definitely a trend in the industry, that the telco industry, eventually, many of those companies will become an AdTech vendor, in fact in.

As for the super apps like Uber, DoorDash, any others, those have just an upper hand of the 
data itself, so it’s quite a no-brainer to them to actually decide to build their own systems.

Why do companies choose us vs hiring developers internally or using body-leasing companies?

Radosław Kostecki: Sure, for sure in terms of building the advertising systems, expertise is important. 

Because Clearcode throughout the 14 years of our history building those systems, we’ve come up with different use cases, very specific, complex systems that had to cover like high scalability, either the system had many integrations in place that we had to also develop and create.

I’d say the more complex project gets, the more Clearcode might be a better fit, because someone takes responsibility to actually develop the system, or the stakeholders from the company actually need to make sure that this would be a success, many of the companies tried to do it internally first, then came back to us, because they actually failed with the with the initiative.

It’s not always something that we say, that for all of the projects it needs to be

Clearcode in the first place, we’re always open for different approaches, but obviously the more project requires high scalability, high QPS, the traffic will be huge, those are not like a simple platforms to develop, like it requires just a lot of experience.

So this is the upper hand we give, time to market should be as quick as possible for the MVP to be live.

Michael Sweeney: Yeah, definitely. And I think, you know, as you said experience, expertise, skills in this area, it’s quite important, right, because as you said before, the more complex the platform is, the more experience you need to have building it, right.

And I guess even with, you know, platforms, like common platforms, like DSPs, even though they are very common platform within the industry used by, you know, there’s, like, hundreds, possibly even thousands of vendors on the market.

When it actually comes to building it is still a quite a complex thing to build, right, because you’ve got to integrate with the open RTB protocol, you’ve got to understand what a bid request is, you’ve got to understand how long you’ve got to respond to a bid request as a DSP, or bidder.

It can be very hard for, I guess, you know, you’re even a seasoned, experienced software developer who has no experience in AdTech actually building it, right.

So if I don’t know what a DSP is, they’re going to have no chance of building it, right, because they have to learn all the, you know, the inside things about how it all works and stuff.

Radosław Kostecki: Funny thing in terms of AdTech is that we have a lot of 3 letter acronyms, a lot of shortcuts DSP, SSP, CDP.

Even when we talk initially with our customers, sometimes they say OK, I want to build a DSP, but if we dive into details, deeper requirements and find out that not necessarily this is the actual end system that needs to be developed.

So a lot of terms, the domain is also quite huge in terms of the potential systems that can be developed, so we always like try to navigate customers in the discovery to make sure that it’s in line with what they’re expecting.

Michael Sweeney: Excellent, perfect. So yeah, that’s all of the questions I had for today Radek, so thanks so much for joining me today and sharing your insights.

If you’d like to learn more about custom AdTech&MarTech development, if you have any questions at all, feel free to get in contact with us via our website clearcode.cc.

You can also get in contact with Radosław Kostecki on Linkedin, he’s very active on Linkedin, so he’ll probably reply to your Linkedin message before he replies to an SMS, so check out Radosław Kostecki and get in contact with him as well and we’ll see you next time.

Clearcode

AdTech/MarTech Development and the Vicious Cycle Plaguing Vendors and Agencies

Maciej Zawadziński, +1

Jul 16, 2018

AdTech

AdTech/MarTech Development Teams: In-House vs Outsourcing vs Development Partner

Mike Sweeney

Aug 27, 2018

AdTech

Q&A With an AdTech Developer: How To Implement Prebid Server

Mike Sweeney

May 25, 2023

The post The Companies Clearcode Works With: Q&A with Radosław Kostecki appeared first on Clearcode.

Carrying out these processes results in high infrastructure bills. Optimizing various cloud-computing services can help reduce the costs, however, it’s often a time-consuming process that many DevOps teams simply don’t have time for.

Enter Antimetal.

Clearcode’s Head of Marketing, Michael Sweeney, recently spoke to Matthew Parkhurst, co-founder and CEO at Antimetal, to learn more about how Antimetal helps companies save costs on their AWS infrastructure setups.

Tell us a bit about Antimetal and what you guys do.

Antimetal automates AWS savings, giving you the flexibility of on-demand services with the savings of long term commitments.

What is the main problem that you help companies solve?

Forecasting AWS spend is incredibly difficult and time consuming. Done wrong, it can cost companies a significant amount of money. We make forecasting easy and drastically reduce the risk of making the wrong forecast for your AWS bill. This allows companies to engage with long-term AWS commitments and their associated savings, without worry.

Antimetal helps companies save money on AWS costs. You have recently started focusing on the AdTech industry, why is that?

Our customers in the AdTech space routinely experience the same problems: Extremely high AWS compute spend. Our tool is ideal for the space as we allow AdTech companies to see an average saving of 62% on their AWS in minutes.

Infrastructure costs are one of the biggest costs for any AdTech company. Tell us about how AdTech companies can reduce these costs manually (i.e. by relying on their DevOps teams to make optimizations) vs using Antimetal to do it? What are the main advantages of using Antimetal in this situation?

Antimetal is not a replacement for DevOps teams, but a useful tool to help them achieve their goals of reducing AWS costs. 

Our best customer is one that has optimized their AWS spend but needs to take their optimization to the next level. 

Our algorithm collects data across a wide array of sources, from the AWS Reserved Instance marketplace to utilization and coverage, allowing us to generate recommendations far beyond what companies would see in Cost Explorer or other savings tools on the market. 

How specifically does Antimetal help AdTech companies reduce the cost of the AWS bills?

Antimetal analyzes customers accounts to see exactly how best they can save on their AWS bills. We’ve built a complex dataset for AdTech customers allowing us to maximize their savings in a unique manner. 

Learn more about Antimetal here.

AdTech

How We Built an Ad Exchange with Amazon Web Services (AWS)

Mike Sweeney, +1

Sep 26, 2019

Clearcode

Clearcode Joins the AWS Partner Network Program

Mike Sweeney

Dec 18, 2019

AdTech

How We Built the SITO Mobile Demand-Side Platform (DSP) on AWS [case study]

Mike Sweeney

Mar 04, 2020

The post Saving Money on AWS for AdTech: Q&A with Matthew Parkhurst from Antimetal appeared first on Clearcode.

With a staggering $45 billion US retail media market, retailers are attempting to seize the golden opportunity that retail media presents to not only cater to evolving consumer preferences, but also open up new avenues for advertisers seeking to engage with their most coveted audiences.

In this blog post, you will learn about the opportunities for retailers and advertisers in the retail media space, as well as the challenges related to using AdTech within the retail landscape.

Key Points

• Retail media networks (RMNs) are capturing a growing portion of marketing budgets as manufacturers and brands redirect their expenditures to focus on engaging consumers in proximity to the point of purchase.
• The end of third-party cookies in web browsers and the focus on using first-party data for advertising is a key force that’s driving interest in retail media.
• Between 2024 and 2027, retail media is expected to be the fastest-growing advertising channel.
• The main benefits of retail media for advertisers are closer relationships with their consumers, more accurate targeting, and closed-loop attribution.
• The main benefits of retail media for retailers are the ability to unlock and monetize their first-party data, improve inventory management and sales, and boost company revenue.
• The main challenge for retailers when building a retail media network is finding a software development partner that has experience in AdTech development.

The Rise of Retail Media

While both retail and retail media share the common goal of driving sales and enhancing the customer experience, they operate on distinct fronts within the retail ecosystem, so it’s crucial to differentiate them.

Retail, in its classic form, encompasses the brick-and-mortar stores and e-commerce platforms where products and services are sold directly to customers.

Retail media, on the other hand, is a relatively new phenomenon that has roots in traditional retail advertising but has evolved to adapt to the digital age; it represents a convergence of commerce and advertising within the retail space.

There are various reasons for retail media’s rise in popularity among advertisers and retailers, one of which is the desire to reach consumers just as they’re about to buy a product.

The end of third-party cookies in web browsers and the focus on using first-party data for advertising is another key force that’s driving interest in retail media.

Yet another key aspect is the fact that the demand for shopper convenience has become one of the top priorities, accelerated even more by the transformative impacts of the pandemic and continuous technological advancements.

This leaves retailers with no choice but to accommodate consumers’ needs by improving the overall shopper experience, whether it’s through a smoother shopping process or by providing personalized but non-intrusive ads.

Moreover, in a recent survey by Prosper Insights & Analytics, around 19% of consumers expressed a preference for the convenience of purchasing online and utilizing in-store pick-up services, while 18% used grocery delivery apps, and 16% made regular online purchases for home delivery, making it crucial for retailers to boost their social media presence either through paid advertising or social media marketing, which will simultaneously generate traffic in their physical stores.

It’s also worth mentioning that from 2024 onwards, and at least until 2027, retail media is expected to undergo an exceptional upswing, meaning that establishing a fresh retail media partnership model that brings retailers, advertisers, and AdTech together will be crucial.

The Benefits of Retail Media for Advertisers and Retailers

As the digital advertising landscape continues to evolve, retail media is poised to play a pivotal role in the success of both advertisers and retailers, as it represents a win-win situation for both groups. 

In short, advertisers can gain access to highly targeted audiences, improve their ROI, and obtain valuable insights, while retailers can enjoy a new revenue stream, enhanced customer experiences, and a competitive edge in the market.

However, let’s explore a bit further to see what advertisers and retailers can actually gain by including retail media as part of their business strategy.

For Advertisers

Being Closer to Consumers

In order to reach consumers right on the verge of purchasing the product, manufacturers and brands are increasingly redirecting their investments, mainly into RMNs. 

According to research done by McKinsey, 73% of advertisers expect to boost their spending on RMNs in the next 12 months, and RMNs are anticipated to account for roughly 10-15% of the complete media expenditure.

Targeting Shoppers Accurately

RMNs employ sophisticated data analytics to identify and reach ideal shoppers. By tapping into first-party shopper data, advertisers can gain invaluable insights into consumer preferences, behaviors, and needs, ensuring that customers are exposed to products that genuinely resonate with their interests.

Implementing Closed-Loop Attribution

With ad impressions and sales occurring within the same platform, advertisers can precisely monitor the effectiveness of their advertisements and, therefore, readily demonstrate that their marketing efforts are delivering tangible results.

Thanks to closed-loop attribution, the influential marketing channels are automatically credited, making it easier for advertisers to understand the customer journey and to determine which of their ads contributed to a conversion.

For Retailers

Unlocking First-Party Data

In the world of retail media, Amazon and Walmart significantly dominate the industry due to their large amounts of first-party consumer data. 

However, across the entire retail media ecosystem, numerous independent AdTech companies exist to help retailers unlock the value of their first-party data to power audience targeting, measurement, and attribution.

Improving Inventory Management and Sales

AdTech can help with better inventory management since it can provide product information and highlight product availability at specific stores. 

This can help retailers promote the products they have in stock and avoid promoting those products that are out of stock, leading to better inventory management and an increase in sales.

Boosting Revenue

It’s not always possible for retailers to increase the margins on their products, but by building an advertising business, they can create a new revenue stream.

By establishing an advertising business that’s centered around their first-party customer data, retailers can create a new revenue stream that will allow them to offset revenue from low-margin or fixed-margin products sales.

The Main Challenges Retailers Face When Building a Retail Media Network (RMN)

Despite the rise in popularity and investment, the retail media industry is facing growing pains. While most of these issues are business related, some are connected with the technological side of building and running a retail media network.

Balancing Ambition with Pragmatism

While the potential for any retailer with a receptive audience to establish an RMN exists in theory, the practical execution of such networks demands a substantial investment of both time and financial resources.

As marketers venture into the world of retail media, they are confronted with the intricate challenge of managing media purchases across numerous networks. The endeavor, although promising in terms of reach, often proves to be costly and time-intensive.

Retailers that decide to go down the build-it-yourself path quickly realize that developing an AdTech platform to power their retail media business is not an easy task, even for seasoned developers. 

Without support and input from an experienced AdTech development partner, retailers will likely experience delays in launching their retail media network.

Navigating Uncharted Territories

Even with the potential of closed-loop attribution, the absence of standardized measurement practices is a prevalent concern, making it difficult for advertisers to measure ad campaigns. 

This lack of universally accepted metrics and methodologies also hinders effective assessment and comparison across campaigns and platforms.

It’s a challenge that retailers face when building a retail media network, but that’s not to say that it can’t be achieved with the right technology and first-party data strategy. 

Also, it’s likely that industry bodies like the IAB will introduce measurement standards for retail media in the future, just as has been done for other digital advertising channels.

Shifting From Expansion to Consolidation

As the retail sector witnesses a gold rush of retailers vying to establish their RMNs, the industry will soon find itself with a fragmented landscape that includes hundreds of RMNs for brands to choose from. 

Smaller retailers at the fringes of this expansion may face a natural process of consolidation and be acquired by larger players. 

For retailers, the influx of competitors necessitates a strategic approach that encompasses innovation, value proposition differentiation, and a keen awareness of the evolving market dynamics. 

For this reason, it’s vital that retailers get the technology part right — both the internal and external integrations, as well as the technical consultancy and development aspects — when building their RMNs.

Doing so will help them to fully utilize their first-party data.

Maintaining Exclusivity and Attraction

The allure of cultivating a walled garden approach, while fostering exclusivity, comes with the inherent risk of alienating potential advertisers. 

Striking a balance between creating an enticing environment for advertisers and upholding the principle of openness is an ongoing challenge for RMNs, but it can be achieved with the right business strategy and development partner.

AdTech

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Fast forward to 2023, when 1.96 million apps are available on the App Store and consumers are predicted to spend $33.9 billion in app stores.

Moreover, as many as 86% of people use other devices while watching TV, with between 68%-76% of viewers using a smartphone to research information, use social media, and reply to messages.

Taking all that into consideration, in-app mobile advertising presents a great opportunity for advertisers. With many of us being so dependent on mobile devices, using mobile advertising to reach a target audience is a no-brainer for marketers and advertisers.

In this article, you will learn about mobile advertising, how it’s different from in-app advertising, and how in-app advertising works

Key Points

• In-app (aka, mobile app) advertising refers to displaying ads within mobile apps on smartphones and tablets. 
• Mobile apps serve ads through the use of a software-development kit (SDK), meaning that developers have to integrate the given AdTech vendor’s SDK into their app.
• Gaming, social, utility, and entertainment companies rely heavily on in-app advertising (IAA) to generate revenue.
• As app developers get paid to serve advertisements within their mobile app, in-app advertising allows publishers to keep their content free for users, boosting downloads while earning scalable revenue.
• Nowadays, the app economy is dominated by free-to-download apps, with only a small portion (~5%) of users making in-app purchases (IAP) and generating revenue for apps.
• According to data.ai’s research, time spent on Android phones per day has reached 5 hours in the top mobile-first markets, along with the number of app downloads hitting 255 billion in 2022, with global consumers downloading more than 485,000 apps per minute.
• The main types of in-app ad formats include playable ads, interstitial ads, offerwalls, rewarded video ads, video ads, expandable ads, standard banner ads, and native ads.

The Growth of Mobile Advertising

These are just some of the events that have shaped mobile advertising into what it is today:

• Although the handheld mobile phone was developed in 1973, it wasn’t until 1992 that the first text message was sent.
• It was only in 1997 that free news headlines via short message service (SMS) were offered by a Finnish news provider.
• The first phone used for email was released in 1999.
• Mobile marketing came to life in 2000 when the Wireless Advertising Association in New York and the Wireless Marketing Association in London were created around the same time; together, they transformed into the Mobile Marketing Association in 2003.
• 2006 brought AdMob, the first leading mobile advertising platform, thus giving web developers and publishers the possibility to monetize mobile ads.
• Introduced to the public in 2007, Google’s Mobile AdSense allowed websites optimized for mobile browsers to display the same ads as a regular website.
• Before AdSense was released, the launch date of the first iPhone was announced in early 2007.
• iPad went on sale in 2010, and a few days afterwards, Apple introduced their advertising platform, iAD.
• Facebook’s Mobile Ads was launched in 2012. Prior to this launch, Facebook garnered no revenue from the mobile app because no advertising was available.

The release of the first iPhone in 2007 totally changed the game for mobile advertising, giving users the option to interact with a mobile ad in a new way: the touch-sensitive, multi-sensor interface enabled ads to to be shrunken or enlarged, as well as rotated.

Considering that people use apps for all sorts of things, it’s not surprising that time spent “in-app” keeps increasing year-on-year (YOY).

However, users tend to spend more time in-app compared to on the mobile web these days, so although marketers and advertisers have more hours and ways to reach them each day, they have to think of innovative ways to actually catch the attention of their target audience.

Evidence of this behavior is illustrated in the following statistics from Data.ai’s State of Mobile 2022 report:

• Time spent on Android phones per day has increased to 5 hours in the top mobile-first markets.
• App downloads reached 255 billion in 2022, with global consumers downloading more than 485,000 apps per minute.
• Mobile ad spend is predicted to get as high as $362 billion in 2023, despite tightening marketing budgets.
• What’s concerning is that the App Store spend has cooled to $167 billion (-2% YoY) due to a decline in gaming spend, which was previously bolstered by pandemic conditions.

What Is In-App Advertising?

In-app advertising, aka mobile-app advertising, refers to displaying ads within mobile apps on smartphones and tablets. Brands and advertisers run ad campaigns across multiple mobile apps to increase brand awareness and conversions, just like they do with other digital advertising channels, such as web advertising.

Gaming, social, utility, and entertainment companies are quite dependent on in-app advertising (IAA).

Since app developers get paid to serve advertisements within their mobile app, publishers can keep their content free for users.

Not only does this model keep content free, but it also drives the number of downloads up, as well as providing scalable revenue for app developers and publishers.

Currently, it’s rather rare for apps to require payment up front, as most have a freemium model that lets you download the software for free with the option to upgrade later in order to be able to use more features, remove ads, have access to more content, or buy stuff.

Moreover, only a small portion (~5%) of users decide to make in-app purchases (IAP) and, therefore, generate revenue.

There are apps that are capable of relying on IAP alone, but most of them prefer to use ad revenue from in-app advertising (IAA) as their main revenue stream.

Now that we’ve got the definition of in-app advertising out of the way, let’s move on to how in-app ads work.

How Are In-App Ads Served?

Mobile apps need to use a software-development kit (SDK) in order to display ads, meaning that developers have to integrate the given AdTech vendor’s SDK into their app. In terms of how ads are shown, it’s done through an AdTech platform, such as a mobile ad network.

An ad network is a platform that brings developers and advertisers together.

Due to constant changes in formats, programmatic ad buying, and real-time bidding, developers are now able to automate and handle ads more efficiently than in the past.

In addition, ads have undergone advancements to enhance intuitiveness and seamless integration within the mobile user experience. 

Like all the other digital advertising channels, the in-app mobile advertising ecosystem is divided into the buy side and the sell side, with various advertising technology (AdTech) platforms playing a key role in the delivery and measurement of in-app ads.

The buy side consists of stakeholders buying the ads. These are app developers and agencies who are responsible for designing mobile ads, coming up with a campaign strategy, and then launching the ad campaign.

The sell side, on the other hand, is made of apps selling ad space, known as publishers, with app publishers (developers) combining a mediation platform with various ad networks through a software development kit (SDK). 

An ad network acts as a broker, meaning that it takes care of selling the publishers’ in-app inventory to the advertisers, along with handling the process of matching a publisher’s ad supply with the advertiser’s demand. 

Apart from the ad network, we’ve also got the ad exchange.

An ad exchange resembles a stock exchange, so instead of simply selling impressions by the thousand, the ad exchange lets advertisers select their desired audience and bid on individual impressions.

Two other key AdTech platforms are the demand-side platform (DSP) and the supply-side platform (SSP). 

The former gives advertisers access to inventory from numerous ad exchanges, while the latter lets publishers manage their in-app ad inventory and make it available to advertisers via an ad exchange and DSP. 

So, how does the whole system work exactly?

Well, it depends on how the in-app mobile ads are bought and sold.

If an ad is being transacted via an ad network, then an ad request will be sent from the mobile app to an ad network via an SDK. The ad request will be matched with an advertiser’s campaign, and an ad will be selected. The ad will then be sent back to the mobile app and displayed to the user.

If the ad is being transacted via real-time bidding (RTB), then an ad request will be sent from the mobile app to an SSP via an SDK. The SSP will then pass on the ad request to an ad exchange, which will then pass on the bid request to multiple DSPs.

Each DSP will evaluate the bid request, match it with the advertisers’ ad campaigns, and send back a bid response. The ad exchange will then hold an auction where each of the bids from the various DSPs will compete against one another.

The highest bid will win the impression, and the ad will be shown to the user.

Below is an overview of how in-app mobile ads are bought and sold via ad networks and RTB.

What’s the Difference Between In-App Advertising and Mobile Advertising?

Here’s a short comparison between mobile and in-app advertising:

Now, let’s see exactly how these two types of advertising can be differentiated.

When it comes to mobile devices using a browser to display ads, they don’t require a software-development kit (SDK), as these ads are served in the same way as ads on websites.

Mobile apps, on the other hand, need the mobile app’s developers to integrate the given AdTech vendor’s SDK into their app so that the ad space where the ads will run is defined, along with information about the ad medium (e.g., text, image, native, and video) and the ad format (e.g., interstitial and banner).

Despite less time being spent on the mobile web compared to in-app activity, the mobile web offers more contextual- and audience-targeting opportunities, due to the fact that new web pages are being created all the time.

Thanks to that, advertisers are capable of reaching audiences based on their interests across the whole Internet, making the mobile web a huge opportunity for advertisers in terms of scale.

There’s also the matter of available formats.

Most ad formats adjust well to the mobile web — whether it’s native ads that seamlessly blend into their surrounding content, or video ads, which are a useful weapon for battling “banner blindness”.

What’s also important to mention is viewability. Based on research from eMarketer, the global viewability rate is much higher in-app than for either the mobile web or desktop:

It’s all due to the fact that ads shown in apps are better at capturing one’s attention, as they are often more prominent and can’t be closed as easily as ads displayed in a browser.

It’s also worth pointing out that desktop and laptop computers might be shared, whereas mobile phones generally only have one owner, so installed apps have a thorough personal connection with the user and their daily habits, making the in-app environment a perfect space for creating effective and personal advertising touchpoints.

Examples of In-App Ad Formats

There’s no right or wrong answer as to which in-app ad format you should choose to get your desired results, but you can certainly find one that is suitable for your needs.

The best way to do this is by deciding what you’re aiming to achieve with your campaign.

Each type of in-app ad offers various useful benefits, so let’s explore them to know what they bring to the table.

Playable Ads

Playable ads are like app “samples,” as they allow users to try out the software through all sorts of mini-games before installing it.

Since these ads are interactive, they tend to be received positively by the audience, provide a good user experience, and deliver the highest eCPMs in the industry.

Interstitial Ads

Interstitial ads provide users with rich, customizable, and appealing static or in-app video ads at natural pauses in an app’s flow, such as when a user opens the app, browses between pages, or switches between games. This frequency of ad exposure keeps the disruption of the user experience to a bare minimum.

They do, however, require user action in order to be closed or display the desired content.

One of the most distinguishable interstitial ads is a splash ad, a full-screen interstitial ad shown when the app is opened but before any other content is loaded.

Offerwalls

Offerwalls are essentially mini-stores within the app.

They mainly present a list of tasks that users can do and in exchange for an in-app reward.

The user has to initiate this type of ad, which extends session length; hence, they hold a dominant position among eCPMs.

Rewarded Video Ads

With rewarded video ads, users receive various prizes for watching a video.

Not only are they displayed voluntarily, but they also boost in-app purchases and encourage users to come back.

Video Ads

In-app video ads last between 15 and 30 seconds.

Moreover, compared to desktop ads, users pay more attention to in-app video ads because, without the ability to multitask, their attention is solely directed toward the ad.

Expandable Ads

Although expandable ads are usually rich media ads, they are also considered a mix of banner and interstitial ads.

Starting with a teaser banner (320×50 pixels), they then expand to 320×480 pixels after being clicked on by the user. The enlarged version of the ad gives advertisers more space to deliver the message they are trying to convey in the ad.

Standard Banner Ads

Standard banner ads vary from 320×50 to 300×50 pixels, and they’re usually static or animated. Moreover, they commonly appear at the top or bottom of the screen. 

Despite being fairly simple, this is the most popular advertising format.

Back in the day, these ads weren’t quite effective, but if implemented in the right context, they’re passive and non-intrusive; thus, they contribute to user experience satisfaction.

Native Ads

Overall, native ads combine advertising messages with user-centric content.

As publishers aren’t given an actual ad but rather the components of the ad, they’re the ones deciding how to display the element in ways that fit well with its app, meaning that there’s no one established standard in terms of form and size.

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In this video interview, Michael Sweeney, Head of Marketing at Clearcode, asked Ann Hand, Chairman & CEO of Super League Gaming, a series of questions about advertising in the metaverse.

Get in contact with Michael and Ann on LinkedIn:

• Michael Sweeney, Head of Marketing at Clearcode
• Ann Hand, Chairman & CEO at Super League Gaming

Below is the transcript from the video interview above.

Michael Sweeney: Hello, everyone. My name is Michael Sweeney. I’m the Head of Marketing here at Clearcode. In today’s video, I’m joined by Ann Hand, who is the Chairwoman and CEO of Super League. We’re going to be talking about in-game advertising and the metaverse. Ann, thank you so much for joining me today.

Ann Hand: Thank you for having me.

What Super League does and what do you do?

Michael Sweeney: Tell us a little bit about yourself and what Super League does.

Ann Hand: There’s a lot to say about myself, but I don’t know if it’s that exciting to anybody else. I guess probably the thing that career-wise people kind of latch onto is the diversity of my background. 

I spent close to 20 years in large companies, specifically energy and retail companies like BP and McDonald’s. And then I kind of took a little bit of a wild leap into early-stage companies, first running a clean tech business and now running one that’s in the gaming entertainment sector.

So I spent a lot of my early career or early time in these roles kind of apologizing or feeling like I had to overexplain those kinds of several hops in my CV. But now I’ve just decided that it’s a positive thing and that I’m versatile, and I’ve kind of moved on from that. And it does just prove that business is business, right? You’re solving problems and applying very similar toolkits to those problems regardless of the industry or size of the business.

Super League is a company that’s been around for about eight years, and the original premise that really grabbed me and got me excited about it was the opportunity to debunk the myth of who an everyday gamer is these days, to latch onto the fact that gaming is now a lifestyle trend. It’s something people aren’t growing out of, and to find a new way to really help advertisers and brands talk to this young consumer base, which really represents a lot of the consumers that brands are seeking, and to educate them on the fact that a gamer is their customer too.

Michael Sweeney: I definitely agree with you that coming from a different industry is probably, in many cases, a positive thing because you get a fresh set of eyes, get to see things from different perspectives that a lot of people who have worked within the industry for a while don’t necessarily see.

What’s Super League’s relationship with Minecraft and Roblox?

Michael Sweeney: Thanks very much for the intro about Super League. Just got a couple of follow-up questions about Super League itself. I noticed that on your website and just doing a bit of digging around and reading some other articles about Super League, that you guys have a connection with Minecraft and Roblox, right? The two very popular gaming environments. So just tell us a little bit more about Super League’s connection with those two environments because from what I understand, Super League has many different pillars of your business, right? You guys are one kind of game creator, maybe AdTech company and you guys have your own advertising platforms. You’ve got a studio option as well for ad creation. So, just expand on the connection between Super League, Minecraft, and Roblox.

Ann Hand: So I’d say first, to your point, we have really two primary things that we provide for brands and advertisers. The first is an opportunity to create immersive game experiences inside game worlds on platforms like Minecraft and Roblox. And I’ll talk about our relationship there in just a moment. 

And the second thing, as you mentioned, is we have a set of very innovative native intrinsic in-game ad products. That is another avenue that we can bring advertisers into the landscape of these games. 

Often, what we find is that the power of the Super League is brands want both. They want the experiential kind of product placement on steroids moment inside these game worlds, and they want it augmented with on-platform media products that allow us to really drive exponentially more traffic into that experience and deliver really off-the-charts types of engagement and ROI.

Our roots of starting really with Minecraft started in the early days of the company when we were saying “where are kids?” if we’re going to focus on kid gamers, what we saw was most of them were playing Minecraft. And what was great about Minecraft is that it has the underpinnings of STEM. It’s a very parent-friendly game because your kids are learning about coding. 

First, we really focused on that competitive gamer because that’s who we thought the hardcore avid gamer, that’s what they look like. But over time, the more that we worked with Minecraft, our eyes were kind of opened up to the fact that actually, a lot of the kids were in there not for competition. They were in there to harness the power of open-world platforms like Minecraft and Roblox, as it puts the tools in the hands of everyday players.

And so what it means is that they get to create their own game experiences, and many of them are there not just to create or compete, but they also want to socialize. It’s really just an extension of their physical life. It’s like a digital cul-de-sac or playground or hangout spot. 

And so the more we learned through working with Minecraft in the early days, the more we started to say, you know, we really want to double down on where we think the world’s going, which is more of these open-world types of games where the player themselves gets to change the landscape of the game. 

And we just saw that as really empowering, sticky, and exciting, and that led to our jump into Roblox starting a few years ago, and now we reach over 100 million monthly unique players in those two platforms combined. So we’ve been able, by really focusing on that type of genre of game platform, we’ve been able to really gain depth and scale, which is what advertisers seek.

Where can brands show ads inside games?

Michael Sweeney: I think another follow-up question there. So, with regards to the ad platforms that you guys have, where brands can show ads inside these games, is it generally ads inside your own game that you create, or are they showing ads across many different games in those environments?

Ann Hand: Yeah, it’s a good question. 

The power of what Super League has built is this tech and capability backbone, so to speak. And it’s a tech and capability backbone that we are applying to platforms like Minecraft and Roblox. 

So what it means, if you could imagine almost like a solar system, right? If Super League’s ad tech and capability is the sun of that universe, then what we do is we operate some of our own mini-game worlds or planets that are plugged into that technology, that backbone. But it’s also an opportunity for anybody who develops an exciting mini-game world or planet in those platforms to tether onto our backbone as well. What that means is they get a whole set of analytics to make their planet or the mini-game world more robust, exciting, and monetizable for their own needs. But it also means they can participate in our ad economy.

So if you step back and imagine this wider solar system, we have hundreds of games plugged into that universe that we operate, and we control the pathways between the game worlds, too. When we talk about bringing brands into games, either through immersive experiences or their brands into those in-game ad products, we’re able to find the appropriate set of game worlds that really speak to the kind of target they’re seeking, right? Because a Barbie girl’s different than a Hot Wheels’ boy. And so we select from our universe what is the right network of games that will give the advertiser the type of audience that they’re seeking in a very targeted way.

And so that’s the power of how we’ve been able to aggregate and achieve scale. It’s because this underlying foundation of creating great creator tools and the creator economy has really incentivized all the creators inside this greater platform to have a participation, a piece of the upside by joining the Super League network.

How do you navigate the complex regulations around advertising to children across different regions?

Michael Sweeney: Perfect. Sounds good. So just a side-question here because you mentioned before that I guess, especially with environments like Minecraft, Hot Wheels, Barbie, that kind of thing, obviously, the audience is children, right? And there are obviously a lot of different regulations depending on the country, the state you live in, in America. There are different regulations around showing advertising to children. 

So is that a challenge you face as a company that provides advertising predominantly targeted toward children? Or is it like, you know, there would be specific brands whose target audiences are children? And there are no barriers that you would face in other environments, right? I guess the brands themselves would know what the restrictions are. For example, when it comes to advertising to children. Is it like that? Is there the difference kind of a bit nuanced where it’s not so much of an issue?

Ann Hand: It’s both, really. 

As you said in your last point, we served over 100 brands last year. These are sophisticated global brands. They know and have their own kind of sets of guardrails around the audiences that they’re trying to reach and want to reach. It’s appropriate to reach also one of the hallmarks of Super League because we’ve always stood for not just inclusive, safe, positive gaming and debunking that myth of who a player is, as I mentioned earlier, it’s always been as well about a safe marketing channel. And so COPPA compliant, we have kidSAFE certification. 

Those are kind of hallmarks that the brand is known as a trusted place to put marketing dollars. And to your point, that being said, we as well can ensure that a brand who wants to reach an over 13 audience, we’re directing them that way, right? So it’s got to be the appropriate brand. 

And again, the sophistication of the brands that we’re working with, they’ve already got that high bar they’ve set for themselves. That’s the power of us really understanding our network and making sure that we’re putting that advertising appropriately in front of an audience that is considered 13 and over.

What have been some of the main changes and trends within the in-game advertising industry over the years?

Michael Sweeney: Yeah, perfect. Awesome.

So obviously, Super League has been around since 2014, I believe, and you’ve been at the company since 2015. So what have been some of the main changes and trends within the in-game advertising industry over those years? Because advertising in games has been around since games were around pretty much always, with things like product placement or that kind of stuff. 

But I think it’s only been the past few years that the whole in-game advertising industry has really picked up speed. And there’s been a lot of press coverage about in-game advertising over the past few years. So what have been some of the changes and trends that you’ve noticed over those years working at a company that is in this industry?

Ann Hand: Yeah, in the early days we were focusing much more, as I mentioned earlier, on that competitive gamer, and so we were thinking much more… We were kind of dragging off that trend of e-sports, and the establishment of professional teams and leagues and tournaments, and we were thinking a lot about amateur leagues, for kids and young adults. And so again, a tighter focus on that more hardcore gamer. 

Then we started to go through that journey and realize that our safe and positive brand positioning was actually a distinctive place to stand, that we had a point of view about positive gaming, that gaming can be good for you in the right context, that we really felt a leading position. And by choosing that path, it really meant that we were going to be focusing more on these games that are just as much about creation and socialization. 

If you understand a lot of the game worlds inside Minecraft and Roblox, you’ll know that there aren’t winners and losers. That’s not the way the games are designed. They’re role-playing games. They’re games where it’s much more about the socialization aspects. So the company started to really say: “Let’s focus more on these types of worlds.”

What happened to the landscape of the ad world through that process is that we were starting in the early days, and we were small, right? We didn’t have a real scale. The only way advertisers were going to come and put dollars to work with us was really more because there was a lot of brand alignment. They saw the promise of what could be over time. Companies like Logitech spent money as a top-down sponsor with us trying to get to young kids and their parents. Nickelodeon as well, Cinemark theaters. 

What’s interesting about those three names I mentioned just there is at the same time, they became investors in us. And that just shows all the more in some ways that their sponsorship was almost more just putting a toe in the water, and we weren’t going to change their marketing strategy for the year materially, but they saw the future of where things were going, and they wanted that opportunity to invest in us and collaborate. 

In fact, it just got announced today that we won a Webby Award with Paramount and MTV, one of our investors, for a red carpet experience we recreated for the Video Music Awards last year for MTV in the metaverse. So it’s fun, five years later to see that those things that look like small sponsorships have turned into material, important parts of their marketing strategies.

And because we were also more narrowly looking at that kind of e-sports category in those earliest days, we were mimicking what we were seeing with the professional e-sports team layer, even though, of course, we weren’t going to attract the kinds of dollars they could because we didn’t have all those giant viewership numbers. 

But certainly, we were much more sponsorship-focused. And what’s changed now is instead of being event-focused or tournament-focused and sponsorship-focused, we’re really talking about 24/7 persistent worlds and volume of players that allow us to create some really exciting temporal experiences. But instead of them lasting an hour or 2 hours, they can last weeks or longer. And as well augment them with those very clever in-game ad products. 

When I talk about in-game ad products, we’re not talking about pop-up banners, and we’re not talking about things that interrupt the gameplay or jump in front of the player. We’re talking about native products baked into the landscape. Maybe it’s SpongeBob off in the distance, standing under a tree in the game, and it’s your opportunity if you choose to go over and talk to him.

Or maybe off in the distance of a cityscape, there’s a dynamic billboard that has a funny meme on it. It’s your choice to go over and decide if you want to view that content. Just like when you’re driving down a street in real life, the billboards don’t jump out in the road in front of you. That distinction of these very engaging ad products that we believe enhance the game experience and don’t interrupt or block it is a distinction from what you see classically when people talk about in-game advertising, even mobile game advertising tends to be pop-up banners and overrides and things that you have to kind of opt out of or move to continue your gameplay.

Is Super League still involved in e-sports?

Michael Sweeney: Definitely. I think that’s an incredibly important point that you just made there about the difference between pure in-game ads and traditional banner ads or pop-up ads that you would see, for example, on a mobile game. I think that’s quite an important distinction to make when talking about in-game advertising versus in-app advertising, which is a kind of different format industry. So yeah, it’s a quite important distinction you made there.

Just a quick question around the e-sports part that you just mentioned before. You said that Super League started with the sponsorship of e-sports tournaments, etc. Is that still a part of your business, or is it something that you’ve moved away from a little bit into other areas? Is it still something that Super League is involved in?

Ann Hand: So here’s how it happens now. When we were doing some of that e-sports work in the earliest days, we were a small company. A lot of the power of e-sports was creating great broadcast. And so we have some proprietary tech, a fully remote virtual production room that we can do a very high-quality tournament live broadcast that has minimal audio-video lag – like milliseconds, and it’s special enough that we continue to use it for all kinds of use cases.

Last year we did a pretty big activation with Samsung Galaxy, with the Charli XCX pop concert inside one of our Roblox worlds. They don’t want just the players to get to see Charli XCX sing in her metaverse avatar persona. They want the live feed because they want a great broadcast to put on their Twitch channel and Samsung.com for all the people who like Samsung and Charli XCX but maybe not our ROBLOX players.

We were the company that could very affordably add a super high quality and provide them that broadcast. In fact, that event was up for an MTV VMA award for the best metaverse concert. So, we still use that technology. 

And back to your earlier question, when a brand comes to us and says, you know what, for obvious reasons, it could be an alcohol brand or Red Bull or just somebody who’s targeting an older demographic, if they’re looking for like an over 18 demographic, we’ll take some of that tournament tech and broadcast tech, and we can still deliver them a solution that helps them reach an older gamer.

So it’s not the core kind of where we have the largest audience numbers, but it’s certainly a capability that we’re known for. And we have companies we’ve worked with for years like Topgolf, who has fantastic physical golf facilities, fun places, entertainment, golf, you know, locations. But they also own a golf video game called World Golf Tour. And they want to reach and engage with their audiences beyond when they visit their physical sites. And so we run monthly broadcast tournaments for them and for others.

What is your definition of the Metaverse?

Michael Sweeney: Yeah, sounds good. So you’ve touched on this topic a second ago with Roblox, but I wanted to ask a couple of questions now about the metaverse. It’s a very hot topic and a bit of a buzzword over the past few years. So, I guess the question is, what is your definition of the metaverse?

There are some people out there that say that the metaverse isn’t really here yet because one of the fundamental pillars of the metaverse is interoperability between different virtual worlds. Right? It’s kind of, you know, people say that the metaverse is essentially just a virtual world that mimics your real life. What is your definition of the metaverse? And what are some of the examples of what you’ve seen?

Ann Hand: Yeah, I try not to really limit myself and to think it has to be the complete max definition of full interoperability. I talk a lot to CMOs and also my investors because they get a little kind of turned off by in many ways, the unfortunate missteps of some other companies that have gone into the metaverse. So maybe perhaps a little too boldly thinking they could live into that max definition of faster than is really possible.

And here’s the truth. The truth is your physical life isn’t fully interoperable anyway. You can’t actually move your music from Apple to somewhere else. So this notion that full interoperability, there are plenty of ways we operate in all kinds of Walled Gardens today. And so, to me, I look at that notion of full interoperability – could it happen? Well, a lot of really smart people try to think about how it could happen, sure. But I don’t think it’s happening in the next five or ten years. And the reason is just that the amount of cooperation and regulation that would be required it’s astounding.

You know, to first get people to want to share their customers, share their data, share and put at risk their own profits for sake of directing them elsewhere to competitors. I mean, that’s asking a lot. Now, could I see a couple of players jumping off and trying to build a use case by showing interoperability between them? Could Facebook and Microsoft attempt to do something? Or maybe. But this notion of a fully integrated world to me, we’re many years away from.

What I try to talk a lot to again, brands and investors about is, look, here’s the thing, – and this is the way I think of the metaverse – and it just so happens it started in gaming, but it’s kind of like forget gaming in a way.

In gaming, you can create your own custom avatar, and you can traverse virtual worlds that can mimic things you can do in real life. You can go to a concert, and you can play soccer, you can do all kinds of things. 

And because it’s very customized and personalized, it has a lot of ways that it replicates your physical self. If you ask a young person today to talk about the physical versus digital self, they don’t really see them as separate things. They see them as an extension. And in fact, if anything, a digital self is a place where you can experiment more. I can change my hairstyle five times a day, and in an hour, I can test the boundaries of my physical persona and interest. So there’s something really empowering about it.

So then, another trend that I think is important to define in my terms of what the metaverse is, is just the way screens are changing so fast in our lives. They’re getting smarter. 

For example, if you’ve seen a 4K TV, I mean, gosh, it makes you feel like you’re watching that soccer match or you’re more in that concert. You don’t need a VR headset to have that really amazing 2D experience, and what I say to brands often is, what I think of the interactions that we can create for them inside worlds, that kind of Web 2.0 interactions where we can create a very immersive experience for players to go into these experiences and feel that experience of that concert or playing inside Barbie’s Dreamhouse, that is, in my opinion, kind of a first step of metaverse. And whether you fully believe in or you even understand blockchain and crypto and all that, that can still just be built on the existing financial economy that we have. 

So in my opinion, we’re already in the metaverse inside these existing game platforms. And I think what’s going to happen, why I talk so much about the smarter screens, is look at the .com experience in general. Just go to any website out there. 

Most websites still kind of look like the website that was built in 2000. They really haven’t evolved that much. And yet again, our expectations for a more intimate experience are shifting.

So to me, what I’m excited about with Super League is that smart backbone of tech and capability that we just so happen to be applying right now and these game engines, we are starting to have conversations with brands and saying, what if we took that same tech and started transforming your .com experience? What if when you went to these websites, you did have a much more personalized shopping experience, a more intimate way that feels customized and personalized.

And to me, 2.5 Web is right around the corner. It’s here now. And again, that’s not dependent on interoperability, and it’s not dependent on the blockchain.

Michael Sweeney: Yeah, you made some fantastic points there because the metaverse definition is a kind of point of contention as well. And I totally agree. I don’t think it’s kind of valuable to get too bogged down in the definition of the metaverse. I think it’s more important, as you said, especially for brands and agencies, to look at the opportunities that exist now rather than kind of wait for the metaverse to evolve because you would have missed the opportunity.

Have you seen demand from advertisers to test the metaverse?

So regarding the whole metaverse and brands, have you started to see more brands come to you and say: “we want to start getting involved in the metaverse, we want to start testing it out”? Have you seen a lot of demand from advertisers to test the waters of the metaverse?

Ann Hand: Yeah, for sure. As I said, we served over 100 brands last year. The arc of the conversations usually begins, and sometimes it will come from the brand itself or maybe their agency, but there’ll be a larger campaign or objective. A piece of the RFP will state, “Because we’re targeting this young, gaming audience, what are different ways that we can have this be a component of a larger campaign?”

We find that with a lot of brands, they first dip their toe in and need to get that education going about this very innovative alternative way to reach these audiences and get that deep engagement. Typically, once they get a taste of it, it starts to become a core part of every one of their campaigns going forward. Last year, we had about ten brands that, when you add up all their activations, did well north of $1,000,000 of business with us. However, it might be Universal, and a piece might be for the Minions movie release and then for the Bad Guys release and separate movie releases. We also have other brands who understand the space much better, and they’re putting $1,000,000+ to work with us for singular campaigns.

So, the old adage of advertising holds true: the more scale and the more the brand goes through the education curve, the greater share of the wallet we can take. We’re already seeing that significant change happening. Moreover, what’s exciting is that it’s one thing to say, “Okay, I get it. I understand that the audience has moved, and I need to go where the audience is.” Nobody disputes the astounding numbers. We have hundreds of millions of gamers deeply engaged in these open-world platforms. Recent stats show that the average time spent in these open-world platforms is like 7.5 hours a week, compared to about 5.5 hours on social media.

This realization prompts brands to say, “Wait a minute, I need to stop thinking about this as, ‘Oh, I’ve got my media spend, and what I’m going to do on traditional digital, and then I’ve got this gaming thing’.” Now, this is just a new social channel. The question then becomes: How do you allocate across all of those digital channels? Because in many ways, this isn’t gaming by the traditional definition many of us have. It’s simply where people hang out, congregate, and influence each other.

Once the brand grasps this concept, the conversation shifts. It becomes about how they should approach their annual program, no longer just buying campaigns. They need to think about their media mix differently so that they allocate the appropriate share to this new social channel, just as they had to shift their dollars around ten or fifteen years ago with the advancement of social media channels. This is merely a new channel vying for those dollars, and the dollars are starting to shift over in more material ways.

Do brands recognize that in-game advertising and advertising in the metaverse involve distinct creative content?

Michael Sweeney: Regarding the actual in-game ads, as you mentioned earlier, advertisers are starting to incorporate in-game advertising and advertising in the metaverse as part of their media mix. I suppose there would be a little more work involved in creating the creative content for in-game ads compared to ads on social media or banner ads on a website, right? 

Do brands understand that in-game advertising and advertising in the metaverse are quite different in terms of the actual creative content that is shown? Are they prepared to invest more time and money in creating something that becomes part of the immersive experience rather than just a pop-up like you would see in other channels?

Ann Hand: Yeah, I’ll answer that in two ways. It’s highly relevant to my ongoing conversations with global heads of media from some of the biggest brands. They tell me that traditional digital media isn’t effective anymore. It used to be a significant part of their global investment, but they’re not reaching the same audience with a 15-second spot on platforms like YouTube or Facebook. They understand the need to shift their dollars to where the audience is, but they need to grasp the differences in measurement.

Regarding your question about content and measurement, it’s a valid concern. In-game advertising, such as our Barbie Dreamhouse pop-up experience or 3D non-playing character Barbies promoting the Dreamhouse within games, requires different content and faces measurement challenges without the same clickability as banner ads.

Now, in terms of length and cost, creating an immersive pop-up experience like Barbie’s Dreamhouse with interactive elements like DJing and trying on clothes involves game development investment and takes 1 to 2 months. It’s similar to engaging product placement that generates awareness and excitement.

On the other hand, 3D non-playing characters, digital billboards, and similar media products have creation costs and timeframes comparable to other graphic ads. This scalability excites brands as they see the potential to reach larger audiences. The combination of pop-up experiential activations and scalable media products creates a powerful impact.

Let me share another interesting conversation I had with brands, using Barbie’s Dreamhouse as an example. We ran it for 30 days in October to celebrate its anniversary, and it received 60 million visits with an average dwell time of 7,8 minutes, surpassing expectations. However, it was taken down on November 1st after fulfilling its marketing objectives.

This raised the question of why it couldn’t be a permanent virtual billboard. Imagine a rotating experience billboard tied to different Barbie activations throughout the year. For instance, 3D virtual counterparts of new Barbie dolls could be featured in the Dreamhouse before their physical release, testing children’s excitement and promoting availability. This challenges the notion that investments with longer lead times and higher costs should have a limited lifespan. Instead, they could become persistent assets with extended lifetimes.

Michael Sweeney: Yeah, I think you made some important points about the differences between in-game advertising and other channels, particularly in terms of engagement. Brands are realizing that traditional media channels are no longer effective for them. There are various reasons for this, but one notable phenomenon is banner blindness, which even affects web advertising and mobile app ads. It seems to be creeping into social media platforms as well. Personally, when I come across sponsored ads on Instagram, I can easily recognize them and just keep scrolling without paying much attention. This trend is extending to newer channels as well.

In-game advertising, on the other hand, offers highly engaging experiences for audiences. It goes beyond just advertising and promotion; it takes on a new role for brands. This aspect makes it particularly interesting and valuable.

Ann Hand: There are a lot of studies out there showing exactly that scroll fatigue that you’re talking about and the fact that our eyes are getting trained to skip ads.

Michael Sweeney: Yes.

Ann Hand: So, you know, it’s a real thing, and I’ve experienced it as well. It will be an exciting challenge for the in-game side to appropriately help advertisers understand the measurement and what they can expect from it. We don’t want it to be just hype with big numbers thrown around. The goal is to genuinely build preference, loyalty, and ultimately convert that into sales of their products. Like any new marketing channel, there are challenges to overcome, just as we’ve seen when transitioning from radio to TV, cable, and digital. Each shift required adapting to changes in content, measurement, and understanding the landscape and what to expect.

Has introducing IAB Tech Lab standards provided brands with more confidence in leveraging in-game advertising?

Michael Sweeney: Yeah, definitely.

So, you’ve brought up the next question, which is about measurement. It’s undoubtedly a crucial aspect for advertisers and brands. They want to understand whether their ads or campaigns have had any impact, right?

Last year, the IAB Tech Lab introduced measurement standards specifically for in-game advertising. Have you come across these standards, and have they had any impact on your business and the conversations you’ve been having with brands? I imagine that having a standard for measuring in-game ads provides a framework for brands to assess their performance. In the past, the lack of measurement capabilities may have been a barrier for some brands. Has the introduction of these IAB Tech Lab standards helped overcome those obstacles and provided brands with more confidence in leveraging in-game advertising?

Ann Hand: I think the introduction of the IAB Tech Lab standards has definitely been helpful, and I believe that the IAB plays a critical role in this area.

The reality is that although it’s a starting point and a baseline, it’s still a different landscape. Advertisers are trying to shift their budget from traditional digital marketing, which they feel is failing them. This is evident in the declining ad numbers for platforms like Facebook. However, they are facing challenges because each brand has its own media mix formula.

Moving dollars to something that measures differently poses a struggle for them. Traditional forms of advertising found ways over time to address these challenges. When I was younger, if I watched a commercial on TV, there were formulas and methods to infer its effectiveness. For example, looking at the sales of Barbie dolls after seeing the ad. While it wasn’t perfect and lacked direct clickability, it provided insights into the effectiveness of the marketing spend.

The key is to go beyond the initial measurement standards and show advertisers that their investment is translating into real-life marketing objectives. That’s where the focus should lie.

I understand the reasons why companies and Walled Gardens like Roblox and Minecraft control their first-party data and economy. It makes complete sense. However, there is also a great opportunity to enable brands and advertisers, who want to reach the audience on these platforms, to drive physical conversion. That, to me, is an exciting evolution for these platforms and the Holy Grail. It will make it a no-brainer for brands. The engagement effectiveness of campaigns in terms of sentiment and interaction is exceptional. For instance, when you can have a conversation with a Barbie character and gauge audience excitement, it surpasses the need for traditional focus groups.

Especially for young brands, instead of going through costly R&D testing or supply chain processes, they can experiment by dropping 3D models of new toys into game worlds digitally. Within hours of work, they can gather audience feedback and insights without the logistical challenges.

I believe it will bring about a change not only in how these big brands market and achieve their higher objectives but also in how they engage with audiences. Just as platforms enable everyone to be a creator, brands can become creators and involve their consumers in co-creating the future of toy lines, intellectual property, branded products, and more.

Michael Sweeney: That’s indeed an intriguing use case of in-game advertising, particularly for product testing. It exemplifies some of the less obvious yet promising opportunities. I’m glad you found it interesting. So, regarding X and Y, those were the main topics we discussed today. Is there anything else you would like to add or any other questions you have?

Ann Hand: No, just thank you for having me. It’s been fun talking to you, Michael.

Michael Sweeney: Yeah, likewise. Thank you so much for joining me today. And if anyone wants to get in touch with yourself, obviously I’ll leave links to Super League’s website, your LinkedIn account, Twitter as well if they want to get in touch and learn more about Super League, that’s the way to do it. Once again, thank you so much for joining me today. It’s been great getting your insights on Internet advertising in the metaverse. So thank you so much.

Ann Hand: Thank you.

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The post In-Game Advertising and the Metaverse: Q&A With Clearcode and Super League appeared first on Clearcode.

Then, in the mid- to late-2000s when real-time bidding (RTB) was introduced, companies started utilizing web cookies to identify individuals across different websites. 

These cookies, known as third-party cookies, grew in numbers and were soon being used to identify and track millions of users across the Internet. This ability to identify individuals across the web gave rise to behavioural ad targeting, as well as audience and campaign measurement, frequency capping, and attribution. 

A few years later, news outlets started to get wind of this data-collection activity and started publishing stories about how companies, that people had never heard of, have been tracking them from website to website.

It wasn’t long before governments started to take notice and in 2016, the European Union released its General Data Protection Regulation (GDPR) to provide EU citizens and residents with rights regarding their privacy and data. The GDPR came into effect two years later on May 25, 2018, and has changed the way companies collect, store and use personal data.

But the biggest privacy changes were yet to come.

In 2017, Apple released the first version of its Intelligent Tracking Prevention (ITP) feature to prevent cross-site identification — the very process underpinned by third-party cookies.

In the years that followed, Mozilla introduced a similar feature to its Firefox web browser and Google announced that it too would be shutting off support for third-party cookies in Chrome, which is expected to happen in 2024.

Fast forward to 2023 and the AdTech and programmatic advertising industries are in a situation where 30% to 40% of all web-browser traffic is unidentifiable as a result of third-party cookies not being available. On top of that, Apple has introduced changes to how its identifier for advertising (IDFA) can be accessed on iOS devices, representing another milestone in its crusade against user tracking.

The Future of AdTech Lies in Privacy Enhancing Technologies (PETs)

In Exchange Wire’s Industry Review 2023 report, Clearcode’s CEO, Piotr Banaszczyk, outlines why companies should be looking at implementing privacy-enhancing technologies (PETs) into their businesses to help them navigate and succeed in the privacy-first world.

Read Clearcode’s piece in Exchange Wire’s Industry Review 2023 to learn more about:

• The privacy landscape in programmatic advertising.
• The alternatives to third-party cookies and mobile IDs.
• How companies can adapt to a privacy-first world.
• What privacy-enhancing technologies (PETs) are and how they work.
• Why companies should incorporate privacy-enhancing technologies into their AdTech platforms and advertising operations.

You can read and download Clearcode’s piece in the report here.

The post The Future of AdTech Lies in Privacy-Enhancing Technologies (PETs) appeared first on Clearcode.

We’ve also built our own header bidding solution — Header Bidding Control Center — that allows companies to manage their Prebid setup via an easy to use UI.

Recently, Clearcode’s Head of Marketing, Michael Sweeney, talked with Jacek Jagiełło, a system architect in Clearcode’s R&D department, about how companies can build, configure and implement Prebid Server.

An Overview of Prebid

What Is Prebid?

Prebid is an open-source solution that allows publishers to run header bidding auctions on their websites and mobile apps. Prebid.org is the organization that manages and maintains the standards, JavaScript libraries and SDKs that companies can use to add header-bidding capabilities to their digital properties (e.g. websites and mobile apps).

Header bidding is a technical process whereby publishers can sell ad impressions via multiple supply-side platforms (SSPs) before their ad server is called to find an ad for available ad space. 

The benefit of using header bidding is that publishers are often able to find higher-paying advertisers via header bidding than via the deals they have set up in their ad server, e.g. direct deals and OpenRTB deals.

What Is the Difference Between Prebid.js and Prebid Server?

When it comes to implementing header bidding using Prebid, publishers have two main options — Prebid.js and Prebid Server. In simple terms, Prebid.js is a JavaScript library that publishers can use to run client-side header bidding auctions, and Prebid server is a dedicated server that publishers can use to run these auctions on a server, rather than in the web browser (e.g. client-side header bidding).

Both the client-side (Prebid.js) and server-side (Prebid Server) implementation have pros and cons. 

The main benefit of running header bidding auctions in web browsers is that it’s easier to identify individuals, e.g. via cookies. However, the main downside is page-load latency. The more demand partners a publisher works with, the longer it will take to display the ads, which can cause a poor user experience.

The main benefit of running header bidding auctions on a server is that you move all of the client-side requests away from the web browser, which reduces the latency to the bidders. The main downside is that it’s harder to identify individuals as it’s harder to pass cookies from the web browser to the Prebid Server.

For app developers wanting to monetize their mobile ad inventory, they have to use Prebid Server, since the Prebid Mobile SDK requires it.

Prebid.js vs Prebid Server: Which Option Delivers the Most Ad Revenue?

Identifying which implementation method delivers the most ad revenue can be hard to determine as it often depends on other factors, such as the publisher’s inventory type, audience, and the demand partners it works with.

In general, if a publisher relies on cookie matching — i.e. identifying an individual via IDs located in web cookies — to sell its inventory, then they may see a decrease in ad revenue if they switch from Prebid.js (client-side header bidding) to Prebid Server (server-side header bidding). 

The reason for this is because advertisers will pay less money for an impression if they can’t identify the individual and determine if they’re a member of their target audience.

To get the best of both worlds, some publishers opt for a hybrid model whereby they run their best-performing demand partners via Prebid.js and use Prebid Server for all other demand partners.

Q&A: How Can You Use Prebid Server to Build an Ad Exchange?

What Is Prebid Server and How Is It Typically Implemented?

Michael Sweeney: Before we dive into the specifics around using Prebid Server to build an ad exchange, let’s discuss how Prebid Server is typically used vs when it’s used as an ad exchange. What are the differences in how it’s used in these two different situations?

Jacek Jagiełło: Let’s start by talking about the typical use case of Prebid Server for a publisher.

Typically, a publisher would have its own Prebid.js setup configured on their website, so they can sell their inventory through multiple supply-side platforms (SSPs). 

For performance reasons, they may decide to use server-side header bidding (SSHB), so they deploy Prebid Server, configure the adapters on the server-side, and then adjust their Prebid.js configuration to connect to Prebid Server to perform server-side header bidding.

However, an agency that has a well established demand network needs a way to connect new publishers to their demand network, which is essential to scale their business.

To make it possible to onboard new publishers to the demand network, the agency can create an adapter which connects to their Prebid Server, and offer it to publishers. In this case, the agency’s adapter will essentially act as another Prebid.js adapter for the publisher.

Michael Sweeney: So in some situations, a publisher might be using Prebid Server themselves and be approached by an agency saying “We can give you access to more demand via our Prebid server”. Would that situation be possible? Can publishers implement and call multiple different Prebid servers?

Jacek Jagiello: The agency’s adapter that the publisher will configure on the website to get access to the agency’s demand can call any endpoint that will return the bids. This endpoint could be Prebid Server.  

This is beneficial for the agency, since they do not need to develop their own software that integrates with each demand source; they can use Prebid Server instead.

However, if a publisher is using the same bid adapter as an agency in their demand network, then it’s possible that the publisher could receive two or more bids from the same demand source. Bid duplication is actually fairly common with both header bidding implementations (i.e. SSHB and CSHB).

Michael Sweeney: Yea, bid duplication is an issue in header bidding, especially if you have multiple partners — SSPs or even Prebid servers. As you said, the publisher and the agency they work with could have the same demand sources in their adapters, meaning they would both be receiving bids from the same demand source. 

Jacek Jagiello: Yes, and they might have different user IDs but eventually the bids would come from a single website, which can also be identified as you can pass the domain in an OpenRTB request. 

Michael Sweeney: Right, so how can advertisers determine whether they are sending back bid responses for the same impression?

The advertiser might be able to detect this duplication by correlating the time the two bid requests were received. There are a few ways in which an advertiser can detect duplicated bids.

Michael Sweeney: And how can a publisher identify whether they are getting the same bids when they are using two different Prebid Server setups? Is there a way for publishers to see which demand sources their agency is using?

Jacek Jagiello: It depends on the implementation of the agency’s adapter. The agency might act as a proxy whereby it works with a bunch of demand partners but feeds them to the publisher via its own adapter. 

The agency might say “We use these adapters and this demand source returned this bid.” 

But they also might say “Here is a bid from us, (but they actually got it from AppNexus), but we say it’s our bid because it comes from our network, from our adapter.” 

But under the hood, the agency may have used different adapters. So it depends on the agency’s policy I guess.

If the publisher contacts the agency and asks for the list of the partners they work with, they should be able to spot overlapping bidders.

How Can Agencies Build An Exchange Using Prebid Server?

Michael Sweeney: Let’s start by providing an overview of how the header bidding process works with Prebid Server.

Jacek Jagiełło: The process looks like this:

1. A user visits a web page and the page starts loading.
2. The page loads the Prebid.js script, which is located in the header (i.e. between the <head> </head> tag) of the web page, and sends a request to the Prebid Server.
3. The Prebid Server then passes on the information about the website, inventory and user (e.g. user ID, if available) to the various supply-side platforms and ad exchanges that have been configured in the Prebid Server adapter.
4. The SSPs then pass on a bid request to the various demand sources like demand-side platforms (DSPs) and ad exchanges. The demand sources will likely have hundreds, even thousands, of ad campaigns to choose from on behalf of the advertisers they represent.
5. The SSPs analyze responses from demand sources, and return the bid to Prebid Server.
6. The Prebid Server returns bids to Prebid.js configured on the publisher website. 
7. Depending on Prebid.js configuration, all bids or only the highest bid is passed to the publisher’s ad server. This bid can now compete with the other ad-monetization sources in the ad server, e.g. direct deals.
8. If the publisher’s ad server decides that the header-bidding bid wins the auction, a special creative is returned from the ad server to the website, which renders the advertisement contained in the bid.

Michael Sweeney: In this example, we’re talking about an agency operating a Prebid Server implementation, but could SSPs and even a publisher operate a Prebid Server implementation?

Jacek Jagiełło: Yes, the Prebid Server implementation can be operated by the publisher, or it can be provided by an SSP, or in this case, by an agency. 

The Prebid Server would contain various adapters from SSPs and ad exchanges, which would be called when the Prebid Server receives a request from the website or mobile app.

Michael Sweeney: Tell us about the role the agency plays here and what its adapter does.

Jacek Jagiełło: So in this case, the agency operates and manages the Prebid Server and offers it to publishers so they can add it to their website and access the demand sources provided by the agency.

The agency has the identifiers, the bid parameters, etc. that they use across multiple publishers. They can also generate specific parameters for specific publishers if they need to. This information, along with the configurations, are hosted in Prebid Server.

To allow publishers to start using their Prebid Server, the agency simply needs to provide them with its adapter, which is added to the publishers’ websites.

Michael Sweeney: To benefit from building this Prebid Server, you would need to have access to a lot of demand, i.e. different DSPs, as well as relationships with a lot of publishers, right? 

Jacek Jagiełło: Yes. The Prebid Server works in a similar way to an exchange, except that there are no auctions taking place — the actual decision about which bid should be returned takes place in the SSP or ad exchange, just like in a typical real-time bidding (RTB) auction. The Prebid Server is used to host and manage the various connections with demand sources.

Someone may use the term “Prebid auction”, but what they mean is that the bids are sent to different SSPs. The auctions don’t take place in the Prebid Server.

It’s also worth pointing out that Prebid Server isn’t an ad server either.

There is no complex logic that you can program into Prebid Server like you would do in an ad server. That’s one of the differences between Prebid Server and an ad server — the Prebid server doesn’t use any complicated logic to determine the winning bids; either it returns all bids or the highest bid obtained from the demand sources.

It’s also worth mentioning that the publishers will be using an ad server, e.g. Google Ad Manager or another ad server, that makes the final decision about which ad to show. 

The ad server receives the winning bid from the header bidding auction and then puts that up against the other line items, e.g. direct deals, and then selects the highest-paying option.

How Does Prebid Server Pass On the Winning Bid to the Ad Server?

Michael Sweeney: You just mentioned that Prebid Server is responsible for passing on the bid requests to the SSPs and ad exchanges and then collecting the bid responses. So once it’s collected the bid responses from the SSPs and ad exchanges, does the Prebid Server then connect directly to the ad server and pass that highest bid, or all bids if that’s how it’s been configured, to the ad server?

Jacek Jagiełło: Prebid Server doesn’t interact with the ad server directly — it returns bids to the browser. The web browser then passes them to the ad server via Prebid.js, which is configured to either send all of the bids, or only the highest-paying bid to the ad server.

Michael Sweeney: What information is passed from the browser to the ad server to display the ad?

Jacek Jagiełło: There is a special creative called Prebid Universal Creative that needs to be configured in the publisher’s ad server. It’s an HTML snippet that you put into the ad server. You then need to configure a line item with a creative. 

This creative is then returned to the browser, and the snippet calls Prebid to display a winning creative. It’s like the ad server saying to Prebid “you won the auction, please display this creative.” 

It’s a bit like Piggybacking because the code used to display the Prebid ad is served as a piece of HTML code from the ad server. 

So the ad server only knows that this line item won the auction and has to pass the snippet. The snippet code then calls Prebid to display the ad.

Michael Sweeney: It’s amazing how all of this happens in the time that it needs to happen. We’re talking about sending a request from the browser to the Prebid Server, and then to all these other AdTech platforms, and then back again. And then sending it back to the browser and then to the ad server. The ad server then needs to decide which ad to show out of all of the different deals and then carry out the whole ad serving process. And this happens while the web page is loading! 

Jacek Jagiełło: Yes, there are many processes happening behind the scenes when a web page is loading and it’s all happening extremely quickly. 

And because of all that, it’s prone to human error and misconfigurations on multiple levels, which is why it’s important that companies work with a team that knows how to properly build, configure and implement either a Prebid.js or Prebid Server setup.

One small error or misconfiguration can result in the whole header bidding process not working at all.

How Long Does It Take to Build an Exchange Using Prebid Server?

Michael Sweeney: I know that Clearcode has worked on a few projects recently where we’ve essentially built an exchange using Prebid Server adapters for our clients, so how long does it generally take to build a solution like this? 

Jacek Jagiello: It depends on a couple of factors, such as the demand sources that the publisher or agency would like to integrate with. 

The implementation itself is pretty straightforward as you need only to deploy the Prebid server, and then write the adapter. Generally speaking, that part would take about a month or so, but then you may need to spend another 4 or 6 weeks configuring the adapter, testing and resolving issues and implementing any custom features etc.

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What Is Supply-Path Optimization?

Mike Sweeney, +1

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