Ads in Mobile Apps (and What Makes them Work)

With the rise of ad blocking solutions (90% up from last year), tech experts question the future of mobile in-app advertising and urge vendors to revise their monetization strategies. However, the 2014 research conducted by Medialets suggests in-app advertising still works (although publishers miss almost 30% of their revenue due to messy tracking).

According to Eric Litman, CEO of Medialets, in-app ads drive both clicks and conversions since users “will do almost everything on their phone that they do on their desktop” (including filling registration forms and navigating through several screens).

What is more, in-app ads typically have higher CTR than mobile web ads (0.53% and 0.23%, respectively). Here’s why:

· Smartphone owners spend 85% of their mobile time in apps (even though only 5 applications — including Facebook — see heavy use);

· By implementing location and demographic data (and determining how customers use their phones) publishers can target ads a lot better;

· In-app ads are more engaging (but certainly take more time to design and deploy).

With mobile web ads, you don’t have to worry about OS updates and Android fragmentation; yet, it might be difficult to track user behavior and ensure ad viewability (after all, over 420 million people use ad blockers).

Types of in-app ads

· Standard banner (placed at the very bottom of a screen, average CTR — 0.45%, easy to deploy, available on any smartphone);

· Rectangle banner (placed in the middle of a screen, CTR — 0.36, not large enough to be interactive);

· Full screen banner (CTR — 1.82%, opportunity to use rich-media content, might irritate users).

Great advertising campaigns typically incorporate all types of banners — as well as videos. LoopMe (UK startup) launched a programmatic video ad platform that employs Artificial Intelligence to deliver targeted ads to individual users. The efficiency of LoopMe advertising campaigns is 300% higher than that of their rivals.

In-app advertising that actually works

· Zipcar, a US-based car-sharing company, did an amazing job of its Facebook ad. The ad’s upper block highlights the benefits of using the 24/7 service (including the nominal monthly fee), while the text below the picture urges users to “get driving” by downloading Zipcar app. Speaking of the picture, it uses bright, eye-catching colors and perfectly fits Facebook environment. What makes it work? First, Zipcar took the native approach to ad design. Second, they get their facts straight being 100% clear on pricing. Finally, they provide a social proof the app is worth downloading (over 220 thousand people use the service) and specifically target new users;

· Abs workout (developed by Caynax) has so far generated over 300 thousand downloads, not least thanks to its beautifully designed ad. In a nutshell, it’s a pop-up displayed to Android smartphone owners who already use the 7 Minute Workout App. The ad is slightly bigger than a rectangle banner. Again, Caynax provides a social proof (the average rating and number of downloads) and brief description of the application. The publisher also replaced the cliché “download/install” CTA by the firm “Get from Google Play”. The Abs workout ad is a good example of accurate targeting;

· Audible, an Amazon company that distributes audiobooks and listening apps, has proved standard banners can increase revenues, too. Take a look at this ad integrated into the Podkicker podcasting app. Audible takes the bull by the horns by offering a 30 day free trial and shows the arrow sign to notify potential customers they can proceed with the download at some other place. The company takes full advantage of programmatic advertising and uses complementary colors to increase ad visibility.

In-app advertising: what’s next?

The success of an advertising campaign largely depends on targeting quality — and that’s where programmatic advertising comes in handy.

Programmatic advertising relies on real-time bidding (RTB) and Artificial Intelligence (AI) to target mobile, web, video and social media ads to specific audiences depending on their location, age and content preferences.

Thanks to programmatic advertising, Demand Side Platforms (DSPs for short; currently DSP ads have a modest 0.3% CTR) will use a set of requirements to determine the right audience for your campaign and buy impressions at a certain price. This approach offers multiple benefits for marketers, including the opportunity to monitor campaigns across multiple channels from one dashboard. By 2018, programmatic advertising will account for 50% of all digital ad sales. This — once again! — brings up the importance of creating buyer personas.

If you consider building a mobile app, you’re probably at a loss right now. Should you opt for the wealthy iOS or liberal Android? What monetization strategy is the best? How could you possibly make money on ads and will in-app advertising boost your app’s popularity? Provided you consult a reliable vendor, you’ll get the questions answered.