- Category: July 2021 - Mobile Marketing & Analytics
There are millions of apps that have been downloaded several hundred billion times in total in the app stores of Apple, Google, and Amazon. After all, there is a suitable app for everything, which can be installed on the smartphone with just a few clicks. Certainly, that influences media usage behavior: already today, many people spend more time per day on the mobile phone display than in front of the TV.
The corona pandemic has once again significantly changed the usage behavior of smartphones and apps: due to curfews, many were only allowed to leave their own four walls to go shopping or take their dog for a walk; and since you could only meet friends virtually, smartphone use, and the number of app downloads continued to rise.
The billion-dollar business with apps
Even if many apps can be used free of charge, the business is a crisis-resistant multi-billion-dollar market, as the corona pandemic has also shown that the market steadily booms. In that case, app developers and companies earn their money less from installing the app than from in-app purchases. Depending on the app, different services can be activated for a one-time, monthly, or annually recurring payment. As an upgrade is not possible with every app, many free apps are mainly financed through advertising: small banners or video ads that are played before a video or that are displayed in other parts of the app.
The pro & con of app advertising
For app developers, banner ads are essential as a means of monetization and for marketing managers in-app advertising offers a lot of advantages. For instance, the customer journey is getting more and more complex: prior to a purchase since customers encounter many touchpoints. And while some may research online and directly buy, the time it takes to make a purchase varies widely and often takes several weeks and months. In-app advertising offers the opportunity to stay in contact with potential customers and to address them at the right time with the right advertising message.
Another advantage is the limited availability of ad blockers: corresponding software exists for Android and Apple systems, but this very often requires root access to the respective device. For the advertiser, this means that the advertising will theoretically be perceived by many people. However, since the advertising market is growing steadily, it should only be a matter of time before there are first solutions in the app store that a user can install with one click.
Regarding the click rate, initial studies have also shown that app advertising with formats relevant to the user has a higher average click rate than normal banner ads on desktop devices: e.g., video interstitial ads are clicked significantly more than static images.
Nevertheless, with in-app ads you should always keep in mind that the size of the devices and the arrangement of the advertising spaces in the apps can lead to unwanted clicks on advertisements. Banners often appear at the very bottom or in positions where you can quickly trigger a click with a tap – even though it was unintentional.
So, the click through rate is only a first indicator. If an ad has a good CTR, it still doesn't allow a holistic assessment of the ad performance. Because, if the intention of the landing page does not meet the expectations of the users and no conversions take place, this is not beneficial for the performance of the ad. Therefore, other key figures or performance indicators should be considered, too.
The variety of in-app advertising formats that drive revenue
There are many ways of reaching mobile users, but the most standard format are in-app ads that offer animations and effects to entice the user. These could be ads like banners, native ads, and reward ads:
- Interstitial ads are like full-screen banners that show up between game levels and serve to break up the user experience.
- Mobile video ads tend to produce the best engagement rates: they include the pre-roll ad format, the mid-roll ad format (that appears in the middle of the video), and post-roll ads.
- Rewarded video ads are quite successful and offer the user an in-game reward, such as extra lives and power-ups, for watching and interacting with the ad.
- Native ads can be a powerful ad format due to their ability to blend into the content on screen. A good native ad won’t even appear as an ad to a user, thereby driving engagement rates and interactions.
Since in-app advertising is clearly growing in strength every day, it is neither really a viable choice to think about a marketing budget without it nor to underestimate in-app ads impact. It is simply an important component in the online marketing mix to target potential customers at the right moment.
By Daniela La Marca