In-App Ads and Shoppable Video: The Next Frontier of Advertising

by Andrew Der

Why is in-app advertising so powerful? It captures what’s already on our minds. Traditional advertising is abrasive — annoying even — because it feels in-your-face, especially when it’s for products we have no interest in. However, in-app ads integrate into the experience of using the app, allowing advertising to become more fluid.

Have you ever scrolled through Instagram and been confronted with an integrated ad for the exact product you were just talking about, or Googling?

In-app advertising is hard to resist when it’s packaged in front of you without warning. This tactic works to companies’ advantage in two ways.

First, it allows for users to scroll past the advertisement if it doesn’t interest them, lessening the impact of unwanted ads. Second, it streamlines the process of buying an item when it’s targeted correctly.

Shoppable video, for example, allows customers to add products directly to online shopping carts or sends them to the product page simply by clicking on the item. In a Verizon blog post on shoppable video, Mary Kay Evans writes, “For young people, online viewing has already outstripped traditional television viewing, with 61% of 18- to 29-year-olds in the U.S. reporting that they predominantly watch video online.”

This presents the opportunity — which many companies are taking advantage of — to make interactive and personalized ads part of the experience of watching a video because according to Evans, 85% of consumers expressed that they’d prefer more video advertising.

The power of shoppable video and in-app advertising is that they showcase products without disrupting whatever their customers were already doing. Because of this, they have the power to drive consumer purchases they didn’t even know they wanted or needed, and the statistics are there to show it. According to an article by Smart Insights, looking at Facebook advertising click-through rates, the average Q1 2018 CTR of 2.98% in Q1 is 25% higher quarter-over-quarter and 61% higher year- over-year.

Verizon Ventures has invested in companies using interactive and in-app advertising to drive consumer purchases. For example, portfolio company AdTheorent uses predictive targeting and a real-time bidding (RTB) enabled mobile ad network to deliver ads to optimal target audiences, driving engagement. Portfolio company Kiip takes the approach of a moment-based rewards platform in the apps people use every day to stimulate positive user engagement with ads.

This is the start of a wave of new methods of advertising that will eventually be woven so seamlessly into apps and video that they will become an integral part of their entertainment value. From artificial intelligence to augmented reality, there are endless tools that applications can — and likely will — begin to use in in-app advertisements in years to come to appeal to their unique audiences.