You look like the back of a bus. In the new, fast moving world of mobile advertising, that unreconstructed 1970s style insult is actually sort of a compliment. Well, sort of. 

“In the real world, you often see adverts on the back of buses,” explains Dan Wilson, the breezy 40-year-old mobile advertising aficionado. Wilson is senior director for emerging solutions at PubMatic, a programmatic advertising platform company for premium publishers.

He explains:

“In a way, those bus ads are kind of a big deal. Until recently they were the only ‘mobile advert’ but mobile devices have changed that.”

“Smartphones and tablet devices have revolutionised the way in which media is bought and sold. Mobile real-time GPS information can now be sent back from a user’s smartphone to determine exactly where that user is. This makes a big difference to advertisers.”

“However, with location targeting, it’s no longer only about understanding where the user is. Publishers and advertisers do not simply need to know that a consumer is 100 yards from Starbucks, they need to understand who that person is in order to deliver relevant content to them. For example, do they regularly visit the area, what they do when they are there – i.e. do they shop, eat or drink? Are they likely to be there for work or leisure? Monetising mobile advertising is all about being able to understand who a consumer is and then being able to deliver relevant and timely ads based on that.” 

This is all good news for PubMatic, which works with premium publishers to serve ads programmatically to their websites and apps across all platforms. Its roster of clients include: Haymarket, The Economist, Shortlist, TV Catch-up and ESI Media (Independent and London Evening Standard) in the UK. 

“We help publishers package and price the audiences advertisers want,” says Wilson, a mobile veteran who, incidentally, carries with him two mobile phones for professional use at all times.

The automation of a trade using programmatic technology happens in the blink of an eye via a process known as Real-Time Bidding (RTB) – an eBay-style auction that occurs in less than one tenth of a second. Publishers and advertisers are matched based on factors such as the relevance of an ad to the consumer. For example, has a person previously searched for a brand? If so, that brand’s ad is likely a good match.

This is done in an open marketplace and the deal is done automatically before the viewer reaches a web page, enters an app or starts watching a video on their mobile device or desktop. In short, publishers are able to deliver the desired audience to an advertiser by putting the right ad in the right place at the right time and for the right price.  

PubMatic is also an expert in “private marketplaces.” A private marketplace is a marketplace tailored to specific advertisers where premium publishers make digital inventory available to a select group of buyers. Publishers are able to package inventory based on the type of content, audience data and targeting attributes, for example location or device. The idea is that this makes is easier to match the right buyers with the right space and charge the right amount for that.  

“Imagine you were given exclusive entry into Selfridges before it opened for its Christmas sales,” says Wilson. “You would be given an opportunity to purchase exactly what you wanted, at a specific price, before anyone else has the chance to see what’s on sale.” 

Programmatic is the “new normal”, and it’s moving up the digital ad sales funnel, PubMatic claimed at its recent Ad Revenue Europe conference. In 2014, $21 billion was spent globally in programmatic advertising and that number is expected to more than double to $53 billion by 2018.PubMatic itself now serves more than 200 billion ad impressions a month. 

For mobile specifically, the industry is set for significant growth with mobile predicted to account for 51 percent of all new global advertising spend between 2014 and 2017. (PubMatic shared its thoughts on how publishers can maximise the mobile opportunity in a white paper entitled “Getting The Most Out Of Mobile: Five ways to Maximize the Value of Premium Publisher Mobile Ad Inventory”)

For instance, the company has learned that impactful creative such as high definition video is better than static banner ads. Mobile is about engagement and the content being served needs to capture the imagination and therefore, the attention of the viewer. We’re a generation that consumes media from multiple devices simultaneously. We watch TV, see an ad, then visit that brand’s site on our mobile device to buy or investigate. It’s that trend that PubMatic is helping publishers tap into.

The potential of mobile app inventory to allow for more targeted, effective and engaging ads is unmatched. Using mobile data to understand the behaviour of a target audience makes it highly desirable to buyers. In fact, mobile app inventory is typically monetised 30-50% higher than mobile web inventory.

So, could there be a cloud on this otherwise sunlit horizon? Perhaps. High frequency traders – the Flash Boys mentioned in Michael Lewis’ book of the same name, published this year – have got wind of programmatic advertising. To avoid being left in the cold as automation of trades takes over, the Flash Boys have jammed themselves between the seller and buyer. In an activity known as “front running”, they use algorithms to buy and sell mobile ads at a similarly fast pace as seen in RTB. 

Is Wilson concerned about their involvement in his market? “Yes in the short term, no in the longer term,” he says:

“The programmatic industry is evolving at such a rapid pace, the trade times for ads will only get shorter. We process transactions at around 120 milliseconds. The rising popularity of private marketplaces will also reduce the opportunity for front running. This is because PMPs actually bring sellers and buyers closer together with tailored marketplaces, making it more difficult for the Flash Boys to force their way in.”    

“Whatever the challenges, mobile is clearly the future. In order for publishers to fully benefit from the programmatic opportunity, they need to ‘wake up and smell the audience’, through developing a coherent mobile advertising strategy.”

“Soon, programmatic advertising will not be part of the media plan. It will be the media plan. Mobile and video are the future of digital advertising – allowing brands to create context around specific target audiences and ensure relevant ads are served to them. The publishers and advertisers who understand the role programmatic can play in realising this potential are the ones who will reap the rewards.” 

PubMatic’s a free whitepaper on maximising the potential of mobile “Getting The Most Out Of Mobile: Five ways to Maximize the Value of Premium Publisher Mobile Ad Inventory” can be found here: pubmatic.com/mobile-whitepaper.