Mobile programmatic pricing will surge by more than 45% by 2019, according to a projection released by programmatic agency Goodway Group on Tuesday. Mobile ad prices will rise incrementally, just under 4% month over month throughout the coming year, including for mobile display and mobile video ads served in-app and via mobile browsers. Meanwhile desktop display ad prices are starting to level off with a price increase expected to be between 1% and 3% for the coming year.
Goodway carried out a study analysing billions of bids and average CPM pricing on a weekly basis in the US from January through September across more than 10,000 video ads. The findings from the study were in keeping with a recent forecast from eMarketer which predicted that almost 80% of programmatic ad spend will go mobile by 2019.
Initially, Goodway Group COO Jay Friedman was surprised by the mobile’s dizzying price increase, but it’s not all that extraordinary if you think about the baseline. “Mobile inventory itself is not necessarily so expensive,” Friedman said. “What’s driving the prices is the ability to refine that inventory more accurately based on things like location.” Even though mobile supply still exceeds demand on “a broad open-market basis,” Friedman said, as advertisers and agencies get more sophisticated with their mobile buying and start layering on targeting signals, supply will constrict and prices will go up.
But despite the increase, multiple variables determine mobile prices, Friedman said, pointing to the growing trend of buyers bidding against multiple variables at once, or “combinatorial bidding.”
Combinatorial bidding is a growing trend, Friedman said, though only a few platforms like AppNexus and The Trade Desk offer it today.
“There’s a wide band of pricing, even within what we think of as our most valuable indicator,” Friedman said.