Struggling to evolve into a more agile model based on impressions, publishers in Asia-Pacific have farmed out the responsibility of increasing yield to intermediaries. As a result, many have lost valuable insight into their own businesses.

At the same time, legacy desktop publishers find it tough to keep pace with the region's changing ad tech landscape, in which users have moved on to mobile devices, observes Sonal Patel (pictured below), Asia-Pacific managing director at AppNexus. She underscores the need for publishers to understand how their audiences are interacting with content and ensure their offerings are relevant.

In this Q&A with ExchangeWire, Sonal also urges advertisers to further embrace programmatic and prepare for the 'programmable age'.

ExchangeWire: You joined AppNexus, from Twitter, earlier this year as Asia-Pacific managing director. What new insights about the region's ad tech industry have you gained?

Sonal Patel: Twitter gave me great insight into the value of real-time moments in mobile, which is where we're seeing the largest concentrated spend in advertising. Increasingly, spend behind sports, politics, entertainment events, and concerts is not going to desktop publishers. Instead, it's going across a combination of social media players and mobile publishers, many of which are sole traders or smaller companies.

Looking at how many new Asia-Pacific companies have listed on the stock exchanges in the last three years, we can not only see how healthy the market is for newer disruptive players, but also how concentrated the market has become for Google and Facebook.

We are at a cross point between desktop and mobile. Intermediaries, which are highly prevalent in this region, are seriously going to have to innovate or risk a short shelf life. Even global businesses can now see that media spend is consolidating around a few large players.

You've been involved in the Asia-Pacific ad tech industry for almost a decade. What key changes have you seen that have pushed the industry towards the right – and wrong – directions?

Historically, some publishers in the region have struggled to embrace moving from a cost-per-day (CPD) structure to a more agile one based on impressions. As a result, many publishers have entrusted the job of increasing yields to intermediaries and have lost insight into their own businesses.

Sonal Patel, Asia-Pacific MD, AppNexus

Meanwhile, the ad tech scene in Asia-Pacific has been very difficult for legacy desktop publishers, as users have moved to mobile devices as their first point of contact with the internet.

The ad tech industry here is leapfrogging the adoption of mobile and, in many ways, we are seeing mobile-first innovation coming from our region. This is ushering in a new era of mobile advertisers, publishers, and ad-tech platforms; and as ad blockers limit advertising on mobile web, apps are becoming a mainstay for mobile advertising.

This is resulting in higher engagement rates and better experiences for app users. Native advertising is becoming stronger here, too, but the challenge is scale and time to integration with the publisher, as it's a much longer creative effort for them.

And how should the wrong be rectified?

Publishers are content creators; but in order to keep content flowing and users engaged, they need to understand how their audiences are interacting with content. By using data management platforms and segmenting users and their habits, publishers can keep content relevant and aligned to users' habits and consumption preferences.

Meanwhile, advertisers need to harness programmatic further, because the data underpinning the platform can deliver truly positive ROI (returns on investment). Relevancy is at its most potent in real-time, when it collides with opportunity and engagement to result in a purchase or outcome.

What advertisers need to prepare for now is the 'programmable age', which will see marketers personalising messaging to consumers. To do so effectively, marketers must understand who, what, when, and how a user interacts with a given brand, and maintain ownership of their data.

Where do you see growth opportunities in Asia-Paicific?

Two words: mobile video. The region has a vast number of internet users and is increasingly becoming mobile-first and always-on, with constant engagement from users. This will open up longer usage periods, which in turn will unlock more ad dollars to fight for user eyeballs.

On top of this are the socioeconomic factors influencing how people watch TV. Families who live together in one home will likely use mobile devices as a secondary entertainment hub. TV will likely be extended onto the mobile device because different family members will want to watch a multitude of differing events and shows. This is why the TV industry is creating smart apps in the fight to keep users engaged.

Mobile games companies also are big spenders, with major audiences comprising daily active users. These consumers have enabled games companies to become publishers with the bulk of their revenue coming, not from in-app purchases, but from advertising. We are now seeing mobile-rewarded ads become a segue for in-app purchases, which establishes longer user engagement and increases publisher revenue. As such, we can expect video on mobile to grow much faster over the next year.

Much has been talked about header bidding, but not quite yet in this region. Why should Asia-Pacific publishers care about it?

Header bidding enables publishers to work directly with multiple demand partners, sell inventory in a fair and transparent auction, and avoid the 'AdX' tax. We don't have to guess whether it works. We know it does on the strength of multiple case studies and we expect to see this momentum continue to spread globally.

In first-quarter 2016, we saw adoption of header bidding across 77 different countries. Digital publishers across the world are realising they can earn more incremental revenue through header bidding auctions, where multiple ad exchanges and networks are permitted to compete simultaneously for publisher inventory.

Header bidding will help Asia-Pacific publishers better understand the real value of their inventory. Often, they are grateful for any revenue generated and don't know how much more money might be sitting on the table. We want to change this and support prebid.js, which is an open source header bidding wrapper that enables publishers to more directly integrate with multiple demand sources and understand what their inventory is worth.

Earlier this year, we also launched PriceCheck, a solution like header bidding that empowers mobile app developers to maximise their yield through a transparent, multi-bid auction of their advertising inventory.

Keeping yield maximised also enables publishers to think about buying tools that can help with content and user engagement, such as data management platforms and contextual segmentation of inventory, and remain relevant with changes we see coming in from advertisers.

What challenges do you foresee in its adoption in this region?

Education is a key challenge. Publishers need to better understand the dynamics of the industry; and it's interesting that the growth of a few large tech companies in the US and Europe is creating nervousness among publishers.

Programmatic mobile hasn't quite taken off the way it's touted to. What do you think happened there, and what needs to be resolved for this space to finally grow?

Programmatic mobile was touted to be an extension of programmatic desktop. The ability to migrate spend from desktop to mobile was supposed to be robust, fluid, and almost agnostic regarding where an ad is shown – either on the desktop, mobile phone, or tablet. However, cross-device is still a work in progress in Asia-Pacific, which makes holistic buying somewhat more challenging.

A lack of standardisation in measurement also inhibits spend, which is further complicated on mobile due to differing operating systems, hardware, and, occasionally, user preferences in favour of buying on desktop.

What are marketers in the region still not getting right about programmatic? How can these be addressed?

We conducted an Asia-pacific Trust Study for third-quarter 2015 and found that 90% of professionals used programmatic for mobile advertising, while 79% used it for video. In comparison, the numbers globally were 71% and 56%, respectively.

We are seeing a change in terms of Asia-Pacific leading in programmatic mobile, but this is over-indexed as new advertising players start to spend in mobile.

Video also is growing rapidly in programmatic. Marketers are struggling to find the right types of inventory and audience because of the lack of data aggregation in this region. Data providers here are few and far between; and bespoke publishers and advertisers either have their own data or need additional data to be able to leverage the insight needed.

Furthermore, advertisers need to push greater spend into programmatic in order to entice publishers to move faster to it, so that, in turn, they can amalgamate the right data insights to offer relevant audiences for the advertiser.

The market for the remainder of the year looks to be tightening, which means advertisers will need to promote efficiency and publishers will want to minimise impression waste to create a more effective ecosystem. Additionally, viewability will become a necessity for brand spend in Asia-Pacific.

What are ad tech vendors still not getting right about programmatic in the region?

Cross-device is much desired in Asia-Pacific, but we've not seen any liquidity due to the fragmentation of devices and lack of unification across users and those devices. This, unfortunately, leads to incompatible data. Ad tech players are still, to a large degree, not bridging this gap, and this is resulting in stasis in the sector.