In-App Advertising is Growing, but Around What Trends?

By Ted Bauer

The in-app advertising market has changed quickly in just the past 12-18 months. Consider: Q1 2017 was a record-breaking quarter for app stores, with 15% download growth year-to-year. All told, there were 25 billion downloads in Q1 of this year. Consumer spending on and within apps was $15 billion in Q1 2017, representing 45% year-to-year growth.

That part continues to prove what most marketers know already: experiences and customers are increasingly moving to mobile, with more to come — gross app revenue might surpass $102 billion by 2020.

As the app ecosystem has seen growth, though, the role of in-app advertising has changed. For a long time, app developers favored a “pay once and play” model, where users weren’t prompted with in-app advertising purchase options. Increasingly, as more free-to-download apps enter the market, the brand side needs new revenue generation models. That’s become more about in-app advertising and in-app goods and services. It’s now about 72% of all total mobile ad spend.

This makes sense: comScore research has shown mobile users spend 88% of time in-app, which far outpaces the amount of time spent in mobile browsers.

Some trends to consider in the in-app advertising space:

Programmatic vs. Header Bidding

Programmatic advertising — somewhat complicated overall, but essentially the process of using computers and algorithms to determine ad buys, as opposed to RFPs and human beings — is on the rise within in-app, although it has a competitor in header bidding. Here’s how it works in browsers:

This can be moderately confusing to the marketing side, but here’s one take from a Managing Director at Applift on why header bidding could be detrimental to the rise of programmatic advertising:

Header bidding allows publishers to offer inventory on multiple exchanges rather than filtering demand through a single stream. Most DSPs are connected to most of the leading exchanges. If a DSP registers the same inventory from four different exchanges, it is going to bid the same price across all four, potentially increasing its price.

Programmatic advertising is “hot” in mobile and desktop right now. Header bidding could change that while increasing prices.

Video

Likely not a surprise that video would be a trend in any mobile area for 2017. Look at the growth of mobile video ads:

Source: smaato.com

This is a good time to mention the “Vendor Carnival” problem, though. There are lots of different vendors and options around in-app advertising and in-app video advertising. Because they all offer slightly different solutions, advertisers can struggle to find the right combination to analyze a complete mobile journey for their targets. (This is, of course, why you need to vet any mobile partners significantly, especially as mobile continues to see huge growth.)

Video has been proven over time to deliver higher-value customers to businesses. Most effective marketing involves analyzing channel performance and reducing spend on channels with less performance; as a result, more companies are navigating to in-app video advertising as a potential for positive ROI. That growth in video will only continue in 2017.

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Source:: Business 2 Community

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