From push notifications to App Store Optimization (ASO), modern mobile marketing aims to approach the right users at the right time in the best possible mix. In-app advertising is one of the most important components since the target groups are addressed via already existing apps. Both advertisers and app publishers can benefit from this type of marketing.
In-app advertising is a monetization strategy for mobile publishers. Developers can offer ad space in their app and get paid for showing ads to their users. Developers can be publishers and/or advertisers. An example is when a freemium app (free to install) displays an ad asking users to purchase in-app currency or upgrade to the app's premium service. This monetization strategy allows many mobile apps to be installed for free, which greatly increases the likelihood that users will download them. As of August 2021, 96.9% of all Android apps were available for free, making it difficult for paid apps to reach and install large audiences.
In-app advertising not only increases the number of installs because the app is free, but also increases the overall media consumption of users worldwide. This has led more and more ad networks to focus on advertising via mobile apps. These ads are served through a mobile ad network that connects publishers' inventory with advertisers' creative content.
In addition to being able to offer mobile apps for free to install, in-app advertising offers several benefits for marketers:
- In-app advertising takes advantage of the fact that users spend more time on their cell phones: If you want to reach your target group, you need to know where they are and when. Without in-app ads, marketers risk missing the best time to advertise to their target audience. Up to 90% of the time spent on mobile devices is spent in apps. This provides ample opportunity to reach users and optimize marketing strategy based on user activity.
- Apps have a higher click-through rate (CTR): Compared to the mobile web, apps get a significantly higher CTR when users see ads. A study by Opera Mediaworks found that the CTR of in-app ads was up to 1.3x higher than that of the mobile web in all countries surveyed – 0.58%, while on mobile web it's just 0.23%.
- Improved targeting options: An app's target group can be specifically addressed based on criteria such as demographics and location. This gives advertisers expanded targeting options to reach target audiences and achieve marketing goals.
- Natural and intuitive ad placement: In-app ads can be placed at optimal times in a mobile app's user experience. As a result, they appear less intrusive and more natural than traditional advertising. Different ad formats also allow users to be addressed in different ways. For example, rewarded video ads offer users an in-app currency as a reward for watching an ad for a certain period of time. In this way, user engagement for mobile games can be optimized.
- Increase revenue: In-app advertising increases average revenue per user (ARPU) because different ad formats can be used, and developers can test a number of different methods to serve ads to their target audience. In-app advertising can also be used in conjunction with in-app purchases – a method known as hybrid monetization.
- Optimize user experience: In-app advertising can be seamlessly integrated into the user experience. This means that the mobile app selling the goods also benefits from creating a better user experience by ensuring that the ads are not intrusive.
- Increase user engagement and retention rates: With improved targeting capabilities and intuitive ad placement, mobile marketers can use in-app advertising to increase engagement and retention rates. This impacts lifetime value (LTV) and helps marketers achieve their campaign goals.
By Daniela La Marca