Make no mistake, mobile content is booming and brand advertising across mobile channels is taking the programmatic ad market by storm. It’s inevitable that as consumers migrate their video viewing to smartphone and tablet, brand advertising follows suite.
The rise of mobile advertising
Mobile ad spend has taken over that of desktop and this year $14.6bn will be spent on mobile display advertising compared with $12.38bn on desktop. What’s really interesting though is that spend is going to increase dramatically on mobile and decrease on desktop as budgets move to in-app and mobile web environments and as social media appetites become more and more insatiable, especially on smartphones.
eMarketer predict that display advertising on mobile will reach $25.69bn US dollars in 2017 as more immersive ad formats such as rich media and video increase across the market.
Much of mobile’s growth is being driven by the in-app advertising market. eMarketer’s prediction is that in-app advertising will account for 72% of all mobile ads this year - and that mobile video ad spend is set to increase 70%.
If media companies can get to grips with why this channel engages users so successfully, they can capitalize on its opportunity as an advertising channel and lucrative revenue stream. That’s what I’m going to focus on in this blog.
Why is in-app inventory so appealing to brands?
Because users love apps
In-app advertising reaches users already engaged in content at a deep level. These users have made a conscious decision and commitment to download the app to their mobile device. That app environment provides advertisers with data such as user location and social profiles that provide valuable targeting capabilities.
Apps come with a set of terms and conditions that users must accept to install the app. While it is very rare that users actually read these terms (have you ever?) there is usually a pop up window that tells you what sort of access/permissions the app requires.
When we download an app, we enter into a value exchange there and then whether we realise it or not. What we are exchanging is data about ourselves, not necessarily personally identifiable information, but still very valuable data that advertisers can use to target campaigns more effectively.
It’s fair to say we expect our experience to be of a higher quality if we provide either money or data in exchange of the privilege of the download. Free apps too however, need to be funded. Just as digital desktop publishers need to make revenue from their inventory, so do app publishers. Creating free apps doesn’t generate revenue, it’s within the inventory that the value lies.
Advertising in-app can deliver more relevance, be more consistent in ad format display and it can be more engaging, not only because of the nature of the app environment but because the IAB have introduced the *MRAID standard that makes it easier for advertisers to adapt their creative and format to suit the app type.
It’s a trend supported by data
Time spent with mobile
eMarketer reported 12% of time spent was with mobile web, and 88% was in-app (comScore data).
- In Q3 of 2014 InMobi reported that in-app CTR was nearly 2.8x higher than that of mobile web.
- In May 2014 The mobile video benchmark study conducted by the MMA found that 76% of mobile ad views occurred in-app.
User engagement and acceptance
In-app ads are consistent in appearance, unlike mobile web where the zoom level and screen size, etc. can alter the experience. Users are familiar with apps having an associated cost. They understand content comes at a price and advertising is an acceptable value exchange.
In-app offers a unique identifier, allowing tracking and targeting. The app is categorised by default in the app store. In addition, mobile apps uniquely provide fine location data, which can be useful for precision targeting, or as an input for derived audience targeting.
Mobile in-app advertising spending is expected to reach 16.9bn dollars by 2018 (Statista.com) - that’s in-app spending alone! The mobile market is a programmatic advertising mecca and in-app video is an incredibly engaging format for users.
The time is now and the opportunity huge
Providing this quality video inventory, in-app, at scale with the pre-bid data that gives brands maximum opportunity to target the right audience is something we don’t have to wait another three years for. It’s happening right now. App usage has never been higher and engagement never stronger. That’s why every day app publishers are missing out on the rich revenue potential of in-app video advertising. Media companies who can make the leap to app creation can support online content with app inventory and those who already have, can look to video to keep users engaged and revenues rising.