Your Quick Guide to Mobile Programmatic


In today’s advertising industry, programmatic has become the primary choice for app developers to advertise their apps. Programmatic media buying paves the way toward new efficiencies for mobile advertising and creates new opportunities for app marketers and developers.

An ad creative might be magnificent, but if it’s not in the right place and targeted to the right audience, the campaign will not deliver against its goals. This is where programmatic media delivers a value that should not be underestimated.

In this article, we explain what programmatic advertising is and examine the key practices and strategies that underpin it.

Quick links: 

  1. What is Programmatic Advertising?
  2. Three Types of Programmatic Advertising 
  3. Terminology
  4. What is Real-time Bidding (RTB)?
  5. Types of Auctions in RTB
  6. KPIs of Mobile Programmatic Campaigns
  7. Conclusion

What is Programmatic Advertising?

Mobile programmatic advertising is an automated method of buying and selling mobile ad inventory with high efficiency. Nowadays, with so many technological advancements, users are interested in one thing: convenience. Below, we review the key advantages that programmatic advertising brings to user experience and convenience. 

  • Advanced targeting capabilities - A sophisticated aspect of programmatic buying is that it allows advertisers to serve a specific ad to a specific viewer. Advertisers can precisely determine which audience gets to see which ad, and when. 

  • Automation - Mobile ads are bought and sold in an automated manner, in real-time, without relying on manual insertion orders and offline trading. 

  • Saving time and money - Traditional deals require a manual campaign setup which makes the process slow and prone to human error. With programmatic advertising, the publisher does not have to configure any campaigns. Both parties also save time on negotiating prices; in programmatic, inventory prices are decided in real-time through an auction where various publishers and/or advertisers can participate.

Three Types of Programmatic Advertising

Now that we’ve covered what programmatic advertising is, let’s move on to the different types of programmatic advertising.

Open Marketplaces 
With an open marketplace, inventory prices are decided in real-time through an auction. Any publisher or advertiser can participate, which makes the marketplace dynamic and very competitive. Generally, publishers enter their media inventory with a specific minimum cost per thousand (CPM) price and advertisers bid through real-time bidding (RTB) auctions against each other for the available impressions.

Private Marketplaces
A private marketplace (PMP) is an exclusive marketplace where premium publishers offer their media inventory to a select group of advertisers at a fixed premium price. Unlike open marketplaces, this private deal gives priority to an exclusive group of advertisers, allowing them to place their bids before the inventory becomes available in the open marketplace. A PMP also enables advertisers to access quality inventory, which may not be available on the open exchange (or open auction).

Programmatic Direct
Programmatic direct is negotiated directly between the publisher and the advertiser. The inventory and pricing are guaranteed, and the campaign runs at the same priority as other direct deals on the ad server. Automation plays a huge role here and provides a big advantage: negotiation and fulfillment are completed through a platform instead of manually.

To understand programmatic, we need to be familiar with the following terminologies:


What is Real-Time Bidding (RTB)?

RTB is essentially an auction where ad impressions are sold and bought, in transactions that take milliseconds to execute. It is very common to use the terms “RTB” and “programmatic” interchangeably, although they are not the same. Programmatic is the umbrella term: it is the technology that automates the decision-making process of media buying, by targeting specific audiences and demographics. RTB is simply how advertising inventory is bought and sold on a per-impression auction basis. 

Let’s review the three players of RTB:

Supply-Side Platform (SSP)
A supply-side platform helps publishers (who might also be app developers supplying ad space) monetize their advertising inventory/apps. It enables publishers to make their advertising inventory available to ad exchanges, and it sets controls to maximize revenue yield on their impressions across all demand sources. This includes setting minimum pricing levels, rules for allowed advertisers, and accepted categories, ad types, sizes etc. 

Demand-Side Platform (DSP)
A demand-side platform is the SSP’s counterpart on the advertiser side. Brands (including app developers who want to advertise their apps) can use DSPs to set up their campaigns and define their terms for maximum bids, budget caps, target audience parameters, and campaign goals. DSPs differ depending on their inventory scale (determined by the number of partnerships they have) and by the technology they use to execute the buy (their infrastructure, bidding, and optimization models).

DSPs are used by advertisers to buy ad impressions from exchanges as cost-effectively as possible; SSPs are used by publishers to do the opposite - to maximize the yield for their inventory. 

Ad Exchange
An ad exchange is what allows these two sides of the same coin (SSPs and DSPs) to connect with each other. It is a digital marketplace that enables the entire buying and selling process via real-time auctions.

You can also check out our article to learn more here.

Ad exchange
Sounds simple enough, right? Try out our short quiz to discover your learning: 

Brands can use SSPs to set up their campaigns and define their terms for maximum bids, budget caps, target audience parameters, and campaign goals. 

............... is an exclusive marketplace where premium publishers offer their media inventory to a select group of advertisers at a fixed premium price.
A private marketplace (PMP)
Programmatic direct 
Real-time Bidding (RTB) 

RTB is an auction setting where ad impressions are sold and bought in transactions that take milliseconds to execute.

The answers are at the bottom of this article, so be sure to check that out! 

The Types of Auctions in RTB

The two methods of running real-time auctions are first-price auction and second-price auction. The main difference between first-price and second-price auctions is the way the bids are finalized.

Second Price Auction 
The second price auction model has been the gold standard for mobile ad inventory for many years. It is the model we are most familiar with: the winner pays the second highest bid, rather than their own (thus the second-price name). While buyers typically benefit from this strategy, publishers struggle to maximize the value of their inventory and realize its true value.

First Price Auction 
The first price auction model allows for a simplified approach, but at the same time it requires more sophisticated bid models. Here, the highest bid wins. This means the advertiser pays the price that they bid but only if their bid is the highest. Hence, with the evolution of the industry, more and more bidders have begun to support this model and now are mostly bidding on first-price auctions.

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Key Performance Indicators (KPIs) of Mobile Programmatic Campaigns

Currently, the app market is experiencing massive growth, with new mobile apps appearing on the market every day. Hence, it is of great importance for apps to acquire high-value users who will continually visit their app, who will actively and frequently engage with your features, and who will make in-app purchases. 

Let’s examine the key metrics that are used to measure your campaign’s performance, across the various stages of your app’s campaign.

Top-Funnel Metrics

Cost-per-mille (CPM)
Also known as “cost per thousand impressions,” CPM is a pricing model wherein the advertising cost depends on the number of impressions served.

The formula for calculating CPM is quite simple, which explains the pricing model’s popularity. CPM is the cost per thousand impressions, so to determine the CPM for a certain budget you simply divide the total campaign spend by the number of impressions, multiplied by a thousand. 


So, for example,  

$200 Ad Spend ÷ 75,000 Impressions X 1,000 = $2.66 (CPM)

Or to derive the other values in the equation:

Total Cost of Campaign = Total Impressions ÷ 1000 x CPM

Total Impressions = Cost of Campaign ÷ CPM x 1,000

The CPM pricing model offers plenty of benefits to advertisers. Here are the two main advantages:

With CPM pricing, all parties of the programmatic ecosystem, including publishers, SSPs, DSPs, and advertisers, are aligned. There is complete transparency around ad pricing and spend, and any CPM improvements achieved by the DSP are shared with the advertiser. This encourages deep collaboration between the advertiser and the DSP (such as Aarki), including sharing first-party data. We at Aarki ensure that any benefits our models derive from this information flow are shared with the advertiser.

Irrespective of the pricing model, the advertisers' main concern is their users' lifetime value (LTV). Compared with the CPI model, the CPM model allows for optimization against metrics most correlated with LTV, such as return on ad spend (ROAS). Thus, advertisers whose goal is to acquire high LTV users find the CPM model the most effective.

Cost Per Install (CPI)
This pricing model charges a rate per app installation. CPIs are subject to many factors (region, ad format, app vertical, etc.), so it is important to always look back at the historical data.

When grouping campaign types by ad format, we noticed that a general increase in CPI for user acquisition campaigns leads to an overall decrease in CPI for retargeting campaigns.

Install Volume
Install volume is another metric that app marketers should look out for. This metric is the volume of installs your campaign generates.

Bottom-Funnel Metrics

Retention means maintaining high-quality and engaged users, which contributes to the success and revenue of your app. User acquisition campaigns are crucial to all apps, but it is also important to focus on user retention strategies such as putting more focus on machine learning (ML) models, refreshing ad creative, etc.

Lifetime Value (LTV) 
LTV is a way of calculating the value of a new user. This predicts the worth of your user to your bottom line, over their whole relationship with your app.

Many users install an app only to never open it. And often users uninstall an app after the first opening. It’s essential for app marketers to acquire high-quality users to drive stronger return on investment (ROI) for long-term success. To learn more on how to calculate LTV, have a look at our article here.

Cost Per Action (CPA)
CPA is a pricing model in which marketers pay media sources a fixed rate based on a pre-specified action. CPA is chosen for specific conversions, such as registration, in-app purchase, completion of trial, etc.

Return On Ad Spend (ROAS) 
ROAS is a key metric for measuring the success of your mobile advertising campaign. It is the amount of revenue you earn for every dollar spent on a campaign. ROAS shows the profit that is achieved against the advertising expense.

Creative Ads KPIs

Other metrics to consider are Click-through Rate (CTR) and Installs Per Mille (IPM or Install per 1,000 impressions). These metrics are useful to determine the effectiveness of ad creatives and to measure creative performance. They help identify how relevant the creative is and how likely it is to gain the user's attention. For instance, having high CTR means users find your ad to be highly relevant.

Conversion rate (CR) and Install Rate (IR) are metrics worth taking into account too. These metrics are a good measure of the effectiveness of the messaging of the creative, hence to make sure if the creative will lead to increased clicks and impressions.


It’s never late to invest in programmatic to maximize the monetization of your app. Mobile programmatic is an efficient way to reach the right audience for your campaign. This strategy allows you to run your campaigns across high-quality media inventories through real-time bidding. It lets you buy impressions that target the specific users that are likely to deliver revenue to your app. Thanks to machine learning and creative optimization strategies, your campaign’s ad creatives can be delivered to the most optimal targeted users at the most optimal time. 

Mobile programmatic also automates the decision-making process for your campaign’s media buying, in real-time. It is important for app marketers to design data-driven creatives and do continuous iterative testing. It helps you to identify the best creative variants and media placements, combining past insights and real-time data to further optimize the programmatic campaign.

Find out more about the role of programmatic in the mobile app marketing industry by clicking on the button below:

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Quiz answers

Brands can use SSPs to set up their campaigns and define their terms for maximum bids, budget caps, target audience parameters, and campaign goals. 
checkboxFalse - The correct answer is DSP. SSPs help publishers monetize their app’s inventory.

............... is an exclusive marketplace where premium publishers offer their media inventory to a select group of advertisers at a fixed premium price.
checkboxA private marketplace (PMP)
☐Programmatic direct 
☐Real-time Bidding (RTB) 

RTB is an auction setting where ad impressions are sold and bought in transactions that take milliseconds to execute.
checkboxTrue - It can be compared to a stock exchange because the advertising inventory is bought and sold on a per-impression auction basis. 


Topics: Marketplace Insights