InMobi CEO bullish about prospects for independents in the advertising space

“The worst of what we anticipated is behind us.” Abhay Singal, co-founder of InMobi Group and CEO of InMobi Marketing Cloud was in an upbeat mood when we caught up with him on a recent visit to the East Coast from his home in San Francisco. Whether the topic was the deprecation of third-party cookies, the development of FLoC, or Apple’s “Do Not Track” initiative, Singal saw market forces correcting for these challenges and creating opportunities for independents to continue to challenge the walled gardens.

Of course, while remaining open and transparent, independents need to learn from the walled gardens. “You don’t bring toothpicks to a gunfight,” he said.

Abhay Singal, CEO, InMobi Marketing Cloud

Catching up on InMobi Marketing Cloud

Singal co-founded the InMobi Group, which includes social video-sharing platform Glance Roposo, but his main executive responsibility is for InMobi Marketing Cloud, which he describes as “An end-to-end programmatic infrastructure to power advertising for app developers.”

He added: “We have a supply-side platform, a demand-side platform, a customer data platform — a bunch of platforms that are all connected with each other deeply. That’s been our bread and butter for a while. We started back in Asia, we came to the U.S. in 2015, and we’ve now grown to become the second biggest exchange in the app eco-system. We only focus on mobile and apps. That’s been our differentiator; we let the industry go-to apps rather than us change our focus. That’s how we’ve done well.”

More recently, InMobi has developed cloud offerings aimed at specific verticals perceived to be struggling with their mobile advertising strategies.

Moving in on telcos and retail

“We took the same infrastructure we had created and thought about which other industry needs help with advertising,” said Singal. The first big industry that was identified was the telecom carriers. “They have all spent billions of dollars to acquire media properties in the last four or five years and failed miserably in the process,” Singal said. “But they’ve not given up their ambition. They just don’t know how to do it. We took our same infrastructure and created Inmobi Telco Cloud, which is helping those telecom carriers to become players in advertising.”

The second industry InMobi is looking to disrupt is retail. “The only difference between Inmobi Marketing Cloud and the other two — Telco Cloud and Retail Cloud,” Singal explained, “is that in Telco Cloud and Retail Cloud we’re also creating consumer experiences. Marketing Cloud is just infrastructure — the experiences are created by the developers themselves. In Telco Cloud and Retail Cloud we’re almost giving you branded real estate you can deploy within your own properties that will generate more time with the consumer, that can then be monetized through advertising and other means.”

As a general matter, Singal believes telcos and retailers don’t fully understand how to present the kinds of mobile experiences consumers are now demanding. And if consumers are not engaged, they bounce before apps can advertise to them. “Look at what T-Mobile tried to do with T-Mobile Tuesdays,” he said, “or ATT&T with their DirectTV app. These are such archaic experiences that none of the new generation is engaging with them at all; and if your properties aren’t going to be engaging, then how do you generate any dollars from advertising? We’re helping them generate user share of time.”

In essence, telcos give InMobi a screen — the lock screen or the home screen on the phone — and allows InMobi to reimagine the experience: “Completely through a user-first lens.”

The Appsumer acquisition

In October, InMobi signed a definite agreement to acquire Appsumer, adding new capabilities to Marketing Cloud, helping marketers evaluate and optimize spend across an increasing number of channels.

“As the platforms that advertisers are using are becoming diverse in nature, advertisers are always looking for AI-enabled platforms to help them manage their budgets across multiple partners; have them do predictive analytics about, ‘If I push my budget from this player to this player what would happen?’ So that you as a media partner can use your time in being more creative rather than being more analytical. We have taken the fun out of advertising and made it too mathematical in the process and Appsumer takes away that pain for campaign managers and media buyers.”

The value exchange: Experience for data

Successful “big ad machines” like Facebook and Snapchat have understood the need to provide value to users — solve a problem, deliver a service or some kind of entertainment — as the prerequisite for successfully advertising to them. “First they must be relevant for the consumer experience and then the advertisers follow. It can’t be the reverse way,” explained Singal. “Games did exactly the same thing.”

With the creeping disappearance of third-party cookies, publishers will need to work hard to obtain what Singal calls “true” or “clean” identities. “A publisher will need to deliver the right experience to create the trade-off between the user saying ‘This is who I am and I want more of what you’re giving me,’ and ‘I am willing to give you a clean identity of mine.’”

The concern, of course, is that even the best first-party data doesn’t solve the problem of reach. Publishers may be able to identify regular visitors to websites, but what about targeting users who pass through without signing in, or, of course, new and unknown users?

“If people are concerned, that’s a good thing,” Singal said, “because when people are concerned there’s an opportunity for structural change. It is a true concern that addressability becomes limited, but that’s a point-in-time problem. We continue to advertise on TV, not knowing which 50% of the dollars are getting wasted. That’s going to be true now for digital as well. So maybe the prices are going to go down, but the fill rates are going to go up.”

He continued: “It sounds scary because we’re all used to getting [user identities] for free. Now I have to work hard to get them; but in the end, it’s going to be very good for both the publishing community as well as users. Our experiences are only going to become better, and we know in the long term that whenever experiences become better, ultimately advertising becomes better.”

Here’s where market forces are working to achieve a new balance, according to Singal. “We have data on our own exchange where we know that for a user with true identity, advertisers are willing to pay almost three times the money than for a user without an identity. That’s a huge incentive for a publisher to create the products through which they can ask you to give a clean identity.”

Apple’s “Do Not Track”

Singal sees the same dynamic playing out with the effects of Apple’s “Do Not Track” option. “When the choice was presented to the user, about 35% of the people said, yes I am okay being tracked. That’s a very large number. Nobody in the industry anticipated that many users would say, yes I’m okay with it. That’s one positive.”

He added: “The second positive is that those users who said yes are now almost three times more valuable than the users who said, please don’t track me. Advertisers are willing to pay three times as much for a user than is trackable than a user who is not trackable. Third thing is that, for the users that are not trackable, there are a lot of advertisers that are now running ads for them because the prices have come down.”

In other words, while the known user population is smaller than the unknown user population, it is three times more valuable — and if roughly a third of users are known, that balances the equation, both for advertisers and publishers. In addition, that unknown segment is attracting more dollars precisely because it’s now cheaper. “Net, the total volume of money hasn’t changed. Yes, advertisers will struggle to be able to cleanly target an ad, a user, but that all will settle in the next two to three years. It’s not going to change the industry fundamentally.”

Facebook, of course, has been vocal in protesting Apple’s initiative. Singal is not sure why. “Facebook already knows so much about you that it doesn’t need to track you. You’ve given your email address to Facebook, you’ve told them everything just by virtue of continuing to use Facebook. Facebook is no longer able to run ads on third parties because that linkage was only on the basis of tracking, but that was like less than 5% of Facebook’s business.”

One identity to rule them all?

While Singal is aware that the proliferation of identity solutions seeking to tie first-party with other data is confusing, he’s not hoping for a single winner to emerge. “The challenge of the fragmentation of identity is that addressability becomes a nightmare. Players like Unified are solving it, Prebid is solving it. We are solving it — we have our own UnifID product. So the way to approach the problem is not to reduce the identity providers, but to apply technology to reduce the complexity tax that every player needs to pay for different identity providers.” After all, if there’s going to be one winner in the identity resolution space, why shouldn’t it be Google with all the user data in its eco-system?

Read next: Sharing The Trade Desk’s Unified ID will not end adtech disruption

“We have to let the market forces play out rather than try to regulate the market. Over-regulation, in my view, is extremely bad for this industry. We see what happened with GDPR. Such a hard regulation has not only stifled innovation but made the walled gardens become bigger. Regulation is only going to benefit the walled gardens, and I feel like we’ve learnt our lesson from GDPR and we shouldn’t support one identity framework in this industry.”

Google’s proposed FLoC offering — segmenting audiences through interest and behavior rather than tracking audience members of individuals — is not the answer either. In Singal’s view, Google already controls not just its own properties but much of the rest of the internet too. “If advertisers are going to rely on FLoC, they are giving up their ability to be in control forever. That’s not the right thing to do. The industry will fight it tooth and nail. I don’t trust regulators to understand it. We have to leave it to the market to play out or the big walled gardens will win.”

Read next: Google’s FLoC poses a threat to identity solutions and advertisers

Jeff Green, founder and CEO of The Trade Desk, has spoken out strongly in favor of an open internet rather than one dominated by the walled gardens. “We have a slightly more evolved viewpoint,” said Singal, while praising Green for his forthright views. “We think that you can only right the walled gardens by becoming another walled garden -— but then be an open walled garden, don’t try to close the doors; be open, be fully transparent, create the right trade-offs between user experience and the platforms. But play a good game. I’m not bought into their altruistic nature.”

The takeaway is boundless optimism for the independent space. “Our own growth has been, I think, 60 to 65% this year over last year, and we think we see ourselves growing 40 to 45% continuously for the next three to five years. It validates the point that if you bring the right solutions and at least keep the walled gardens on a leash, then the independents can thrive and grow. That is what has happened. In, I think, the last four to five years, the share of money that is going to independents has grown more than the share of money that is going to the walled gardens. I fundamentally believe that trend is going to continue.”

The post InMobi CEO bullish about prospects for independents in the advertising space appeared first on MarTech.

Source: http://feeds.marketingland.com/marketingday

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