The following is a guest contributed post by Jocelyn Sheltraw, Senior Director, Mobile of Rubicon Project.

The latest numbers are in, and for the first time, advertisers are spending more on digital than on TV. Within digital some 70% of those dollars go to mobile, a number that eMarketer expects to rise to 80% by 2021. Every year is “the year of mobile,” so much so that it’s hardly worth saying anymore. One doesn’t need the numbers to see it, really. The more time you (and your kids) spend glued to the smartphone, the larger share of advertising dollars it will command.

The trouble with mobile isn’t so much its novelty, though there are certainly some growing pains as marketers shift to the “newer” channel. But the biggest challenges to date come down to brand safety, format innovation, viewability standards, fraud and a fragmented tech ecosystem which enables all of these moving parts to come together in a seamless way.  But with these issues, comes opportunity. Format innovation and data are two of the biggest factors in why mobile app inventory should be considered for a brand buyer.

Smaller screen sizes on mobile devices mean that ads can take up a larger percentage of the space compared to traditional desktop display. It’s commonplace to have an interstitial, full-screen takeover on mobile whereas similar tactics would elicit huge backlash on a desktop. This creates a small margin for error and forces advertisers to be more creative with the formats available, especially the interstitial and display formats which still account for the majority of mobile spend.

In short, this environment of mobile puts the perennial digital ad problems under a microscope. Interruptive ads are totalizing in their interruptions. Retargeting and location tracking can be seen as creepy as compared to relevant. Contextually irrelevant ads dominate even more of the editorial well, not to mention the intimate personal scenarios in which they can render. With mobile, advertisers will create a focused engagement with users and create a memorable brand experience that users can carry in their hand, but they can also interrupt intimate human experiences where advertising has no place, and where it never had to worry about its place before. The opportunity and the downside risk for brands are both amplified by the smaller screen and the contextual sensitivity.

All of this resolves in favor of ad experiences that promote a balanced value exchange between user and advertisers.

Take reward video for example: a user watches a video clip in exchange for something of value. It’s going to take both sellers adopting these formats and integrating them within their app, and then educating their buyers why this format is so powerful in reaching their consumers in the way they want to be reached at the right time, with the right message.

Playables, or gamified promotions, are another interactive format that invites users to engage in a clear value exchange. The user actually has a reason to engage and stay engaged with the ad, and the ad enhances rather than detracts from the overall user experience. It’s no wonder these new, innovative formats are performing 3x better on average than native, video, and other premium formats, according to recent studies.

Beyond rewarded video and other immersive formats, why is in-app advertising an ideal environment for brands? Research from comScore, echoing similar findings from Nielsen, The Mobile Marketing Association, and Chartboost, shows that women spend more time on the mobile web and mobile apps than men. The average casual gamer is a female aged 25-50 with a high household income. This is a fact that brands often overlook out of habit; they still view mobile gamers as teenage boys, which isn’t necessarily their target demographic.

51 percent of our population plays mobile games for more than 50 minutes a day. That’s a massive amount of time to seize attention with the right user demographic. But the question remains: Why aren’t these budgets shifting? The probable answer is that while advertisers might acknowledge these statistics, the work of adjusting long-standing habits to the new mobile reality lags behind. For mobile to attain its rightful place at the center of digital strategies, for it to become more than just a checked box on a cross platform strategy, marketers will need to overcome antiquated perceptions and begin collaborating with agile vendors who can show them new ways of looking at their audience.

Mobile advertising is an ever growing channel, with huge margins to boot. Advertisers could find more traffic sources and creative formats to reach more users, while mobile app publishers get access to more ad revenue streams day to day. But it takes a lot of experimentation and testing to really leverage the segment to their full advantage. Mobile users are a highly valuable audience – one that is largely untapped into by brand advertisers.

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