Home Data-Driven Thinking How Mobile’s Focus On Performance Helps It Avoid The MFA Problem

How Mobile’s Focus On Performance Helps It Avoid The MFA Problem

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Alex Li, Senior Director of Global Non-Gaming, AppLovin

Much has been said and written in recent months on the made-for-advertising (MFA) phenomenon, or the diversion of ad dollars from legitimate publishers to sites that exist purely to sell ads at a higher cost than the traffic they acquire. 

We know MFAs are a big problem on the open web. But what about mobile, particularly apps? 

There is an MFA equivalent among mobile apps, but it will never infiltrate the ecosystem the way that it has on the traditional web. 

In web-based display advertising, ads are measured by impressions or clicks. Eyeballs matter. Viewability is key. 

In contrast, mobile networks are more focused on performance. Spend is predicated on consistent delivery of business metrics, such as downloads or sales. 

The MFA model simply doesn’t support those conversion-focused goals. Advertisers worried about the MFA issue could take a cue from the mobile app ecosystem and focus more on performance instead of viewability.

The MFA equivalent among mobile apps

Beyond the rigorous review guidelines for both major app stores and ad network requirements, user feedback plays a decisive role in curbing apps that function like MFAs. Ratings, reviews and reports to app stores create a vital feedback loop that weeds out apps pushing ads at the expense of user experience. 

Direct user feedback coupled with market dynamics prevent MFA-like apps from gaining traction in a performance-driven network. Apps that degrade user experience with excessive or intrusive advertising will see low retention and high churn, resulting in lower rankings and profitability and ultimately app store removal. 

In short, in a market that values high performance, advertisers aren’t going to invest ad dollars in poorly rated publishers with low user engagement. 

The link between high-quality content and performance 

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The failure of MFA-like apps to thrive reflects the mobile industry’s broader understanding that apps perform better when they deliver positive experiences and serve relevant, appropriate ads to users. 

Performance is the yardstick of measurement for mobile for both publishers and brands. MFAs simply don’t deliver, and they pose a threat to brand safety. Performance marketers know better than to take that risk.

In other words, there’s no benefit in mobile apps running so many ads that the user experience suffers. And, arguably, there’s also no benefit to advertisers when publishers do so on the traditional web. 

Advertisers want to reach, engage and convert audiences who match a particular profile (or profiles). They also want to protect their brand image. They will opt to advertise in apps that have higher ratings and strong retention rates, as well as a high number of downloads. For these reasons, mobile advertisers are motivated to buy ads from app publishers that prioritize user retention and engagement. 

While many publishers tend to chafe at the control Apple and Google exert through their app stores, in the case of MFAs, the platforms’ guardrails help to maintain a high level of inventory quality, protecting their monetization initiatives. The apps that deliver the best user experience attract the best advertisers and see the highest revenue. 

App networks do not benefit from MFAs 

The tie between quality content and performance should hold true for the open web, but it only does so in theory. Why? Because of ad tech vendors’ financial incentives.

Web-focused ad tech platforms may not measure success the same way as advertisers. They can make more money by driving incremental ad spend on MFA sites. 

In mobile, this potential to scale partner spend – and, consequently, ad revenue – via MFAs doesn’t exist because there just aren’t as many MFA properties to monetize. 

It may seem surprising that the MFA philosophy on the web hasn’t seeped into mobile. It might have – if SSPs didn’t have to contend with app network monetization models. 

While SSPs and web publishers are focused on CPMs (and benefit from high impression volumes), performance app networks have built their monetization strategies on down-funnel goals, which don’t benefit from these practices. 

Mobile advertisers aren’t seeking impressions; they’re seeking quality conversions that result in long-term customers or app users. 

Although app networks charge advertisers on CPM or CPI, performance networks are optimized toward customer KPIs like ROAS and CAC. Plus, networks know advertisers won’t spend consistently on mobile if performance is low. If mobile app networks promoted MFA supply, their customers would lose, and they would lose as a result.

The goal of performance networks and supply sources on mobile is to drive a high degree of profitable user growth, not just impressions. The more valuable and performant the dollars are, the more competitive CPMs will be. If the networks aren’t able to connect advertisers with relevant, real audiences who resonate with advertisers’ offers, the dollars will go elsewhere.

MFAs are still raging on the open web. But app networks, which are built on consistently outstanding performance, understand MFAs have no place in their revenue strategies. 

So even if the traditional web resists mobile’s performance-based model, at least the mobile ecosystem provides a safe haven.

Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

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