Mobile app development is a big business, but did you know that in-app advertising also gives developers and brands a chance to monetize their creations and reach a wider audience? Digital marketing has been outpacing traditional print and media advertising for years. As a result, mobile advertising has proven to be an extremely effective and valuable marketing channel for advertisers.
Some experts even predict that mobile app ad spending will top 400 billion dollars by 2023. Currently, brands are spending over 200 billion dollars on mobile advertising. With so much money being spent on in-app advertising, there is a ton of potential for brands and app developers. However, there is also a ton of competition.
Whether you are building mobile and web apps or are creating an advertising strategy for your brand, you will want to know more about in-app advertising. This post will explain the basics of in-app advertising, the benefits, and some of the challenges advertisers face today.
What Is In-App Advertising?
In-app advertising is exactly what it sounds like, advertisements served to users within mobile apps. In-app advertising is one of the primary revenue streams for app developers. Advertisers pay mobile apps to display their ads to the app’s users. Typically, a mobile ad network will connect app developers with advertisers and serve the advertisements on the app.
As mobile advertising has grown in reach and popularity, the ad formats used by advertisers have evolved over the years. Depending on the type of advertisement you have, there are different ways it can be served to users. The most common types of ad formats are:
- Banner – A traditional display ad placed at the top or the bottom of the user’s screen. Typically, these ads remain in place throughout the use of the app, but they may change every so often to display new ads during a user session.
- Pop-Up – These ads are also sometimes called interstitial ads. They take over the entire screen and often cannot be clicked out until a set amount of time has passed. Typically, these ads are used during natural breaks in gameplay. Since these ads take over the entire screen, app developers should carefully consider where they place these ads.
- Native Ads – This ad format is newer and was developed due to an increasingly savvy audience. This ad blends into the app and almost looks like a natural part of the app experience. Native ads have gotten popular with advertisers because many users express dissatisfaction with overly intrusive and eye-catching ads.
- Reward Ads – This is also a newer ad format that allows users to opt-in to ads for additional in-game or in-app rewards. For example, many freemium games offer users these reward ads as a way for them to unlock items or gain more in-game currency.
- Video Ads – These ads are typically placed at the beginning or during a video stream. They are commonly found on YouTube and other video-heavy apps like ESPN.
Additional marketing advancements like programmatic ad buying and real-time bidding have given advertisers more control over their spend and the people exposed to their ads. Now that you have a basic understanding of in-app advertising, let’s explore the benefits of these ads.
The Benefits of In-App Advertising
Mobile-first doesn’t just apply to Internet browsing. Increasingly, we are spending most of our time on mobile devices in-app. Mobile app advertising doesn’t just benefit advertisers. It also benefits app developers. The main benefit app developers get from in-app advertising is an additional revenue stream. In-app purchases and app purchases are still very lucrative. However, people are far more likely to use a free app. Mobile app advertising gives developers a way to profit off their creations while still providing a free app for users.
The benefits of in-app advertising we are going to explore here are from the perspective of advertisers. They are as follows:
- Better engagement rates
- Get around ad blockers
In-app advertising, much like other digital advertising channels, charges on a per-conversion basis rather than a total production basis. Traditional print and media channels charge advertisers for volume. For example, your business pays for 100 commercials whether or not they encourage a viewer to buy one of your products. In contrast, in-app advertising only charges per view, click, or conversion depending on the ad format and campaign settings.
This type of advertising is the most scalable and advertiser-friendly. Your business only pays for ads that reach users and get an interaction that is helpful to your business. Since this type of advertising is cost-effective, it is the perfect choice for brands with limited marketing resources.
Better Engagement Rates
Modern consumers are savvy, and for the most part, they are tired of being sold products in traditional advertising ways. This is why native ads have such high rates of engagement. Modern users appreciate subtlety, and they do not like intrusive advertisements. In addition to native ads, reward ads are also valuable because users actively interact with them. Everyone is familiar with the common advertising gimmicks. They won’t encourage high rates of user engagement.
Well-crafted native ads and reward ads can help your brand boost user engagement with your advertisements in ways that other ad formats cannot match.
Get Around Ad Blockers
Web developers are all too familiar with ad blockers. Ads in mobile browsers are also vulnerable to ad blockers. In-app ads bypass all ad blocking software. Modern users commonly use ad blockers to remove ads from their experience. This also highlights the importance of crafting an ad experience that doesn’t annoy users. In-app advertising gives your brand a chance to reach many of the users who will block your ads on other platforms. Make sure that you invest resources into crafting ads that won’t push them away.
Recent Challenges to In-App Advertising
In-app advertising gives marketers the ability to be very specific with their targeting, which raises privacy concerns for many people. Apple has responded to these concerns by requiring apps to ask users to opt-in to ad tracking instead of opting out. Obviously, asking users to actively opt-in to ad tracking has significantly reduced the number of users doing so. As a result, it is more difficult for advertisers to attribute revenue to particular sources, which makes optimizing their ads more difficult. However, while Apple users still represent a minority of all global mobile app users, Apple is the popular platform in lucrative markets like the United States, Japan, and the UK.
Despite recent challenges, in-app advertising is the most effective ad channel for reaching the widest audience at the cheapest cost. If you’re trying to create unique ad experiences for your mobile apps or brand, reach out to an app development partner. Native ads are by far the most effective way to reach mobile users. Don’t squander your in-app advertising efforts by following tired advertising conventions.