How does InMobi make money

The information portal for safe cell phone use

Advertising is a common form of financing on the mobile Internet. It's about a lot of money: According to a study by the management consultancy PricewaterhouseCoopers, mobile online advertising recorded total sales of around 144 billion US dollars in 2018.

This was the first time that it exceeded the volume of online advertising for stationary devices. For 2020, PwC forecast a volume of over 200 billion dollars. (Click here for the study, corresponding graphic under "Internet Advertising".)

Online advertising: actors in the market

Roughly speaking, there are two large groups in online marketing: The advertisers, i.e. companies that want to advertise their products. And the “publishers”, i.e. those who make advertising space available on websites or in apps.

There are countless companies that mediate between the two groups. They take on various functions to bring advertisers and free advertising space together on the basis of user profiles - and to show advertising to potential customers in a targeted manner.

This is how advertising networks work

So-called advertising networks, also known as "advertising networks" or "ad networks" for short, play an important role in this. You switch between advertisers and providers of advertising space. Advertisers can register with an ad network and specify which advertisements they want to show for which target group. Publishers can also register and offer their free advertising space there.

The ad network provides the technology to automatically bring supply and demand together and display the ads. The advertising networks of Google and Facebook have by far the largest share of the online advertising market. Other big players are Amazon, Baidu, Awin, Affilinet and Adtech from Verzizon. For mobile devices, there are in some cases their own advertising networks that offer special advertising formats for smartphones, such as AdMob or InMobi.

Thanks to the automated processes, publishers no longer have to worry about individual prospective advertisers, but they only have a rough influence on which advertisements are displayed on their areas.

Malvertising: infections caused by advertising

Advertising can be installed and booked anywhere, whether in e-mails, on Facebook or in Snapchat. The most common form is the so-called banner advertising on websites. Fields are reserved for which content is retrieved from a so-called ad server in parallel with the retrieval of the page. These servers store the advertising in various formats and forms, for example as a video and as a series of photos.

In the case of smartphones, advertising is also displayed within apps. A part of the window within the app is usually used for this.

In the past, advertising banners were used to infect computers and smartphones with malware. To do this, criminals book advertising space in the normal way and include links to infected sites in their ads. Attackers also hack ad servers in order to send their malware packaged as advertising banners. The term "malvertising" has become established for these forms of abuse.

Targeted online advertising with profiles

The advertisers' interest is clear: They want to filter out potential customers as accurately as possible. They also want to know as much as possible about each user.

Target group-oriented advertising is called "programmatic marketing" and is now the standard for online advertising. For each insertion, not only is advertising fetched from an ad server and displayed to the user - the data also runs in the opposite direction: IP addresses and other identification features are collected from the user.

Ad networks also buy user data from other companies to build their databases. Ad networks often also take on the task of selecting the right ad for the respective viewer based on existing user profiles.

We explain how you can be identified on the Internet using unique features for Android systems in the article What are identifiers? There are similar identification features on iOS devices.

Auctions for advertisements

Advertising space and customer data are partly auctioned live. Imagine you click on a website or start an app that has rented advertising space to an advertising network. At that moment, the request for an advertisement is received by the advertising network. The now gets information about you and sends, for example, the following offer to interested parties:

"To offer advertising windows three by six centimeters to wealthy, approximately 34-year-old iPhone 6 users with a small child from Hamburg-Blankenese who are interested in real estate in southern Spain."

Advertisers with real estate offers from southern Spain are likely to jump on them and place high bids.

This all happens fully automatically, whenever a website is accessed - and only takes a few milliseconds. Multiple company's servers can be involved.

Numerous other personal details are transferred, including the available identifiers, language settings, installed apps or browser plugins.

The trade in personal data

Because personal profiles play a major role in online advertising, they are also traded. The advertising networks and their partners, such as Exelate, Adatus, Effective Measure or Adnologies, also buy profile data from online shops and portals, for example. Ad networks also trade with each other with advertising space and personal data.

One of the largest data sellers in online advertising is Bluekai, which belongs to the database specialist Oracle. Nugg.ad (part of Zalando) is one of the largest German data traders in the advertising industry. After all, the company has had Schleswig-Holstein's data protection authority confirm that it has handled personal data in accordance with data protection regulations.

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