Adtech can make a newcomer’s head spin.

This statement, which opens one of the AdTech industry articles that I recently came across on the Internet, reflects precisely the state of my mind, as I am studying the business of ad mediation — the amazing digital technology that enables its users to choose which ad to show when there’s demand for one.

Sounds quite simple, eh? But in fact, a so-called mediation SDK (software development kit) opens highly desired access to dozens of ad networks and allows to maintain control over the whole digital process and thus, to manage their revenue and investments based on their current business priorities.

You can find a more detailed article about Mediation platforms in Xenoss blog, but here today we will share a simple and brief outline of what ad mediation platforms do, how they are structured, and how they can help businesses increase their revenue by using such platforms.

The process is centered in and around the so-called mediation platform, a technology solution used by publishers (the owners of digital advertising space, like: website owners, app developers, etc.) to manage and optimize their advertising inventory across multiple ad networks and demand sources with the final goal of obtaining higher incomes from selling their advertising space.

Imagine that you are the owner of a hotel with multiple rooms, which differ in cost due to their sizes, available equipment, ocean view availability etc., and you have a crowd of guests with different requirements for rooms, paying abilities, length of stay requirements, etc. A well-designed piece of soft could do the work of selecting the ‘right’ room for each guest much faster and better than a whole department of human managers in your hotel. Well, mediation platforms do somewhat similar job for ad publishers.

Here’s how it typically works:

1. Integration: Publishers integrate the mediation platform into their ad-serving infrastructure. This involves adding a software development kit (SDK) or using an API (application programming interface) suggested by the mediation platform provider.
2. Ad Network Integration: The mediation platform is connected to various ad networks, ad exchanges, demand-side platforms (DSPs), and other sources of advertising demand.
3. Ad Request Handling: When a user accesses the publisher’s content, an ad request is sent to the mediation platform.
4. Ad Placement Decision: The mediation platform evaluates factors such as user demographics, location, device type, and historical performance data to determine the most suitable ad to serve.
5. Ad Serving: Based on its decision, the mediation platform selects an ad from one of the integrated ad networks or sources and serves it to the user.
6. Optimization: Over time, the mediation platform continuously analyzes the performance of different ad networks and adjusts its ad serving decisions to maximize revenue for the publisher. This may involve techniques such as real-time bidding (RTB), dynamic allocation, and predictive modeling.

Great system, isn’t it? But how particularly can publishers and owners of mediation platforms contribute from using such digital system? The fact is – they can learn about users and assess user behavior through various parameters, including:

1. Demographic Information: This includes age, gender, location, language, and other demographic details obtained from user registrations, device settings, or inferred from browsing behavior.
2. Device Information: Details about the user’s device, such as device type (e.g., smartphone, tablet, desktop), operating system, device model, screen size, and hardware specifications.
3. Browsing Behavior: Data on how users interact with the publisher’s content, including pages visited, time spent on each page, navigation paths, and frequency of visits. This data can provide insights into user interests and preferences.
4. Engagement Metrics: Metrics such as click-through rate (CTR), viewability, bounce rate, and conversion rate can help assess the level of user engagement with ads and content.
5. Geolocation: Information about the user’s geographical location, which can be used to deliver location-based ads and content or to analyze regional patterns in user behavior.
6. User Interests and Preferences: Derived from browsing history, search queries, interactions with ads, and content consumption patterns. This information helps in targeting relevant ads and content to users.
7. Social Media Integration: If users log in or connect their social media accounts, publishers can access additional information such as social graph data, interests, and social interactions.
8. Ad Interaction Data: Data on how users interact with ads, including ad impressions, clicks, conversions, and post-click behavior. This information helps in optimizing ad placement and targeting strategies.
9. Third-Party Data: Publishers may also leverage third-party data sources such as data management platforms (DMPs) to enrich their understanding of user behavior with additional insights from external sources.

By analyzing these parameters, publishers can create detailed user profiles, segment their audience, and tailor ad experiences to individual users or user segments, ultimately improving the effectiveness of their advertising campaigns and maximizing revenue.

It is, of course, essential for publishers to prioritize user privacy and adhere to relevant data protection regulations when collecting and processing user data, but still, a mediation platform is a powerful innovative tool that makes one’s business times more efficient, and has become a must if you want to want to succeed in the industry.

Hundreds of companies tend to set up mediation platforms these days, and here are the most notable market players, to name a few. Each of them offers unique features and targes different segments of the adtech industry market:

1. Google AdMob: AdMob is a mobile ad network owned by Google that offers a mediation platform allowing app developers to maximize their advertising revenue by integrating multiple ad networks into their apps.
2. MoPub (by Twitter): MoPub is a mobile ad serving platform acquired by Twitter. It provides a mediation solution for app developers to manage and optimize their ad inventory across various demand sources, including ad networks, DSPs, and exchanges.
3. Facebook Audience Network: Facebook’s Audience Network offers a mediation platform that allows publishers to monetize their mobile apps and websites by integrating Facebook’s ad inventory along with ads from other networks.
4. Unity Ads: Unity Ads is a mediation platform provided by Unity Technologies, primarily catering to game developers. It enables developers to manage multiple ad networks within their Unity-powered games to maximize revenue.
5. IronSource: IronSource is a mobile monetization platform that offers a range of solutions, including ad mediation, rewarded video ads, interstitials, and more. It helps app developers optimize their monetization strategies through a single platform.
6. AppLovin MAX: AppLovin MAX is a mediation platform designed to help mobile app developers manage and optimize their ad inventory across multiple demand sources, including in-app bidding, rewarded ads, interstitials, and banners.
7. Chartboost: Chartboost offers a mediation platform specifically tailored for mobile game developers. It allows developers to manage ad placements, optimize revenue, and access a network of advertisers looking to target gaming audiences.
8. AdColony: AdColony provides a mediation platform for mobile app developers to manage their ad inventory and optimize revenue through video and display ads. It offers features such as real-time bidding (RTB) and dynamic ad insertion.

Okay, on reading all this, a logical question comes up: how long does it take to build a mediation platform? And how much can it cost?

Well, the timeline of building a mediation platform can vary significantly depending on several factors, including the complexity of the platform, the features and functionality required, the development team’s expertise, and the availability of existing components or frameworks that can be leveraged.

A basic mediation platform with essential features could potentially be developed within a few months by a skilled development team. However, more complex platforms with advanced functionalities such as real-time bidding (RTB), machine learning-based optimization, sophisticated reporting and analytics, and integrations with numerous ad networks and demand sources may take a year or more to develop.

In terms of cost, building a mediation platform can also vary widely depending on factors such as:

1. Development Team: The cost will depend on whether you hire an in-house team or outsource development to a third-party agency or development firm. Hourly rates for developers can vary greatly based on location, expertise, and experience.
2. Features and Complexity: The more features and functionalities you require, the higher the development costs will be. Advanced features such as real-time bidding, predictive analytics, and cross-platform support will add to the development time and cost.
3. Infrastructure and Technology Stack: The choice of technology stack and infrastructure can impact development costs. Licensing fees for third-party software or services, cloud hosting costs, and infrastructure setup expenses should be taken into account.
4. Testing and Quality Assurance: These are crucial aspects of building a robust mediation platform. Allocating sufficient resources and time for testing will contribute to the overall development cost.
5. Maintenance and Support: After the initial development, ongoing maintenance, updates, and support will incur additional costs. It’s essential to factor in long-term maintenance costs when budgeting for the project.

It’s challenging to provide an exact figure for the cost of building a mediation platform as it can vary widely based on the factors mentioned above. However, a rough estimate for a basic mediation platform could range from tens of thousands to a few hundred thousand dollars, while more complex platforms could cost several hundred thousand to millions of dollars to develop and launch.