SPEAKER: I'd like to welcome Marc Theermann to the stage
to talk about the next level of in-game advertising.
This is important for all of you if you're
looking to make money.
And I think it probably is.
So let's welcome Marc.
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MARC THEERMANN: My name is Marc.
I'm part of the Publisher Business Solutions team
here at Google.
Publisher Business Solutions is the organization within Google
that's responsible to help our publishers make money
from advertisements.
You already heard from John about AdMob, our publisher
business platform for application developers.
I want to talk a little bit more general about application
advertising, the ecosystem at large,
and what advertising means at Google.
The great news is that advertising dollars
are flowing into the ecosystem at a rate never seen before.
Just over the last 18 months, the ecosystem
has grown tremendously, and in-game advertising
is now a multibillion dollar industry.
So that's good news.
And there's a couple of different ways
of how you could get your hands on these dollars.
This slide shows where this demand is currently
coming from, and you'll notice that the biggest chunk still
comes from media and entertainment advertisers.
And that's not a surprise.
A lot of that is other games advertising in games,
and you guys have seen this.
But what I find really exciting about this
is that retail advertising is the fastest growing segment
for us.
This is a whole new advertiser that
is coming to the table with new dollars.
So this is mobile commerce retailers
that are bringing advertising and trying to bring users back
to the e-commerce experiences.
So this is something that we're going to monitor closely,
and I think you'll notice a positive ECPM increase because
of these advertisers coming in.
There's a couple of different ways
of how you could reach these advertisers.
Let's look at those three.
The first one is you could entrust your impressions
into an ad network.
That ad network would go out to advertisers
and represent your inventory for you.
Secondly, you can talk to advertisers
directly by hiring a direct sales force.
Or, the newest way, you could expose your impressions
into an RTB exchange and let multiple advertisers
bid on your impressions.
So let's take a look at each of those three in more specifics.
Ad networks are often the first line of defense,
and are the oldest part of the ecosystem,
and have been around pretty much since the beginning
of the internet.
Google actually runs one of the larger ad networks on the web,
it's called the Google Display Network or GDN.
And it can be accessed through all of our publisher solutions
platforms.
So the great way-- Network make great partners
because they usually don't cost money,
and they work on a by-share basis.
So other than the integration cost
that you have of integrating a new network,
you don't have to hire a sales force,
so most of the money that you get from an ad network
is pure profit.
And that's what makes them so popular.
Interestingly enough, despite the fact
that they have been around the longest in the ecosystem,
I see a lot of innovation on that part of the house.
So there's probably half a dozen of really exciting
start-up companies out there right
now that are innovating on the demand side.
So that's great news.
Because networks take a revenue share,
certain publishers decide to hire their own sales force
and approach advertisers directly.
Direct advertising sort of refers to any ad
that you solicited directly, or you
talk to an advertiser directly, hence the name.
So let's assume that you have gotten
great success with your game.
You are now a company of, let's say, 30 people or so.
And because of your game's success,
a couple of advertisers have started
to reach out to you directly.
And maybe you've even taken in some sponsorship dollars
and hard-coded a sponsorship ad into one of your games.
If that is where you are today, it
might be time to hire your first salesperson.
Why would you go to the expense of hiring that salesperson?
Well, there is no hard and fast rules,
but direct advertisements probably
monetize at a rate of 10% to 30% higher than those ads
that you would get from a third party.
So you hire your first salesperson,
let's call him Mike.
And Mike goes out there, and after a few short months,
he brings back his first advertisement from, let's say,
Procter & Gamble, one of the largest advertisers in mobile.
Procter & Gamble would like to reach your audience,
but they don't want to reach everybody.
They want to pay premium to reach only your female audience
in San Francisco, every Thursday, from 3:00 to 7:00,
for a period of seven months, and at the time,
no other ads are allowed to be in your game.
So if that sounds daunting, then you
know where an ad server comes in.
Pub-side ad servers help you execute advertisements, traffic
your campaigns, and allocate impression
into all the different ad sources that are out there.
If you have multiple advertisements running--
and some of our publishers have hundreds or thousands
ads that want to be delivered at any given time--
the ad server takes on one more particular role
which is called pacing, meaning it allocates
specific impression to the ads that
need to be delivered at any given time.
Finally, for games in particular,
ad servers could serve one other important role,
and that's that of house ads.
House ads are any notifications that you
want to send to your audience.
It might be to advertise a new game that you have.
It might be to advertise a new level, a new feature.
It might even be to serve in-application goods.
The Google ad server, by the way,
is called DoubleClick for Publishers, or DFP for short.
In its newest iteration, it was built with mobile in mind.
And many of the largest publishers in the world
rely on it because of its scalability
and because of its reliability.
So at this point it might be important to note
that for most of our publishers this is not a replacement.
So the world's largest publishers usually do both.
They have a direct ad sales force,
and they also talk to networks.
So let's look at the latest way to monetize impressions,
something that has really only been around
for a few short years, and it's called real-time bidding.
When mobile traffic started to explode,
publishers noticed that a single ad
network and their direct sales force
was not enough to fill all their impressions.
So what they often did was to talk to multiple networks
in a sequence of events often called a daisy chain.
Some publishers attempted to run these daisy chains in-house.
Most publishers would deploy technology middleware
called yield management.
Yield management has some significant advantages,
but it also has a couple of disadvantages.
On the one hand, calling networks
in a sequence of events costs time.
And time means discrepancy, and that
means potential loss of revenue.
But secondly, and probably more importantly,
calling ad networks in a sequence of events
means that you might not be choosing the most ideal ad.
Think of it like this.
You go to a speed dating event, and the speed dating event
has a couple of special rules.
Rule Number 1, you need to pick the first girl
that you're attracted to.
Rule Number 2, you have to pick a contestant
at the end of the game.
And Rule Number 3 is you're not allowed
to see any of the girls that come after you made a pick.
So you go to the event.
You don't like Girl Number 2.
Girl Number 1, Girl Number 2, but Girl Number 3
is very smart and cute, so you pick her.
Unfortunately, Megan Fox was in Seat Number 4,
and you didn't get to meet her, and by the way,
she really likes gamers.
So that's yield management.
It means you make a decent pick, but you
don't make the perfect pick.
And that's where RTB comes in.
RTB sort of replaces a sequence of events
with a simultaneous call.
A few years ago, technology providers
started to experiment with RTB by building exchanges
that pretty much work like the New York Stock Exchange.
You expose your impressions into an auction.
Multiple parties raise their hand
with a specific price and advertiser in mind.
And the highest bidder wins the auction.
So the sequence of calls is replaced
with a simultaneous call, which is
much more efficient and scalable.
So brace for impact, here comes the sales part
of my presentation.
Google has a technology suite that
allows you to access all these demand sources.
With our publisher platforms, you
can access our own ad networks as well as other networks.
You can run a direct sales force.
And, of course, you can expose impressions
into our RTB platform, which has about 400 bidders connected,
bidding on behalf of millions of advertisers.
If you were to do that, let's talk
about integrations for a second.
All of our solutions are now available in a single SDK,
which includes AdMob, it includes DFP,
it includes the DoubleClick Ad Exchange and now Analytics.
This SDK is also baked into the core Android services,
into the core Android Play services.
So for your Android traffic, you don't
need to update the SDK anymore and relaunch
your app into the app store.
It now happens for most of the updates automatically.
We strive very hard to make updates to our SDKs
and continuously improve it.
The latest SDK, which includes these auto-update
functionalities, was launched in January.
So if any of you are using an SDK from us that
is older than that, I'd highly recommend that you update.
You'll likely make more money, and it should likely
be much easier to manage in the future.
So we've done the hard work for you.
We've given you the technology and pipelines to connect you
into all these demand sources.
But there's a couple of things that you
can do to optimize the monetization of your game.
So let's look at those.
The first one is building audiences.
Yes, mobile advertising is still in its infancy.
But if desktop advertising is any indication,
the future winners will be those publishers and games that
foster a deep relationship with their audiences,
and especially those that foster a deep relationship
with their audience across different screens.
More screens are coming.
But even if your game is just available on a single screen
today, most likely you will be on different devices
in the future.
So think about that future and think
about how you can build a long-lasting relationship
with your audience across multiple screens.
One way to do that might be a registration flow.
A registration flow is one of the more privacy-safe ways
to build a long term relationship
and engage your audience.
So I would highly recommend that you think about doing that.
Clearly, you can build your own.
You could also use Gmail as a universal login through Google+
integration.
The benefit there is that lots of people
have Gmail accounts already so it
makes signup a little bit easier.
And we actually share audience information back with you
so that you can use that to target your audiences.
The next big driver is formats.
Choosing the right format and the right placement
in your game is absolutely critical.
You want to provide advertisers a chance
to engage with your audience but without bothering your users.
So while there's many options to choose from,
I would recommend that you pick one of the standard IAB units
because much of the world's demand
is flowing into those formats.
Over the last couple of months, we've
seen tremendous success with interstitials units.
Interstitials are ads that fill out the entire page,
but give users the option to skip or opt out
of the interstitial.
When we analyze our data, we see that advertisers and consumers
alike continue to be very excited about interstitials.
So I would recommend that you take a look
and see if interstitials are the right thing for your game.
So that almost concludes what I wanted to share with you today,
but I also wanted to give you a quick look
into the future of some of the things
that we are doing with regards to new formats.
Our product and engineering teams
are working pretty hard to bring new formats to you.
This year alone, we're going to be
launching a variety of new formats.
Now here are three that I particularly like.
Clearly, location-based advertising
is a very big promise for a device
that's always in your pocket.
So we are working hard to figure out
how we could provide a privacy-friendly environment
in which advertisers can strive and really push
the ecosystem forward with regards
to location-based advertising.
Location-based advertising requires consumer opt-in,
so I would urge you to talk with your product teams
and see if there is features that
could be built into your game that would be better
through location, so that you can collect it.
Secondly, video seems to be the next frontier
for mobile advertising.
We launched video formats at the end of last year,
in a skippable format that you've
known from YouTube which is called TrueView.
It gives the consumer the ability
to skip the video if they don't find
the advertisement relevant for them.
So a lot more video innovation coming from us this year, so
keep your eye out there.
And then last but not least, you've
probably noticed that we've started to include apps
in the search experience on Google Search.
So that's a very big driver for us this year,
helping you guys so that games can be easier discovered
through our search experiences.
So that almost concludes my presentation for today.
I want to leave you with a final thought.
I think it's important to note that not all of our publishers
make equal amounts of money.
The spread is actually fairly large,
which means that we can provide you
with the technology and the pipelines
into all the possible demand sources.
But it really takes dedication, and it takes a lot of tenacity,
and it takes attention to detail to really make
the most out of your monetization suite.
So we've created lots of developer pages
online that might help you to make some of those decisions.
But, of course, you should never hesitate
to reach out to us directly, and reach out to the Publisher
Business Solutions organization within Google,
because we would love to hear from you.
So thank you so much, and I'll be around
if anybody has questions.
And I hope you have a great day.
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