“In 2021, we’ll be saying goodbye to waterfalls,” said Wai Quai Chong, strategic partner manager at Facebook. At the “Saying Goodbye to Waterfalls” panel, Mary Kim, Head of Growth at Game Hive, and Alfred Fung, CEO at Fun-Gi Games, joined Chong to discuss why ad bidding matters — and why it’s important for developers to shift away from waterfalls. The panel was part of the all-day GamesBeat and Facebook digital event, Driving Game Growth.
“When we first heard about the notion of bidding coming into mobile, we couldn’t wait to get started,” said Kim. “Now, today, we are seeing about 70% of all of our ad revenue coming directly from bidding.” The time they’ve saved in the shift to ad bidding has allowed them to make other improvements to their game that they consider much more impactful, like game design, and seeing if there are technical issues within the ad journey.
Ad bidding is transforming businesses in three main ways. The first is enabling real-time competition where the highest price always wins. Waterfall mediation requires a publisher and ad server to call demand sources one by one, according to their average historical price, and it’s not based on who is willing to pay the most for each impression in real time. For publishers, the result is missed opportunities to monetize and money is left on the table, Chong explains.
Second, bidding can help support streamlined operational efficiency. Publishers can struggle to cope with adding and maintaining a growing number of demand sources in their waterfall.
Finally, bidding can reduce ad latency. This is because bidding gives publishers the ability to integrate as many demand sources as possible with minimal management. Publishers have recognized the many inefficiencies of waterfalls and are driving the shift to a more efficient and effective approach through bidding.
Fung, the founder and CEO of Fun-Gi Games, the game design and publishing studio behind House Flip, said his developers have been integrating ad-based monetization, and ad-bidding, into their game from the start.
“The question was, how can we create an ecosystem where we’re not always having to manage the waterfall?” he said. “Using Mary’s term, it ends up being a no-brainer, where we’re able to concentrate a lot more of our resources and production efforts toward making the product better. As a small company, the opportunity in real-time bidding was a resource allocation decision.”
Although the vision of Facebook Audience Network has long been to move to a bidding-only network, they’re currently accelerating this process to help prepare publishers for upcoming iOS 14 changes, Chong said. Apple’s upcoming iOS 14 affects the ability of publishers and developers to collect IDFA, which impacts how they’ll be able to monetize their apps through in-app advertising. As network performance becomes less relevant, waterfall management on iOS 14 will become more complex.
Upcoming versions of iOS are likely to create a two-tier system for developers. The first is higher-value impressions, and the second an averaged-out less predictable, lower-value impression.
“The waterfall-powered systems are poorly placed to maximize earnings for publishers in this new environment,” she explains. “As networks work to adapt and improve performance during this change, bidding can help ensure publishers are getting the best price for every impression, all while reducing costly time spent managing waterfalls.”
“With that coming along, it’s an even more important time to think about ad strategies and what iOS 14 means for you,” Kim adds. “My advice would be to test it out. The worst thing that could happen is it doesn’t work for you, but at least you’re not left behind when the industry moves more and more toward bidding.”
“Don’t operate out of fear — operate from a position of power,” Fung said. “As a publisher, and the folks that are in charge of production, this is core to how you operate the business, making that decision. There’s plenty of white papers and documentation out there. Be very optimistic about it, but still do your homework.”
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