Marketers struggle to meet in-app advertising opportunity: Forrester
October 2, 2013
An example of a successful in-app ad from Kiip
Almost half of consumers do not seem to be appreciating in-application ads, and 43 percent think that they disrupt user experience, according to a report from Forrester Research.
Despite the fact that consumers dislike these ads, only 25 percent of smartphone and 21 percent of tablet users would rather pay for an app instead of seeing ads. Consumers want a non-interruptive mobile experience, and marketers must adapt their strategies to meet their audience’s demands.
"Customers who are using apps want to interact with the app to accomplish a task, use the app’s utility, or for entertainment – they don’t want to interact with your brand," said Jennifer Wise, analyst at Forrester, Cambridge, MA. "While many customers understand the freemium model and accept ads in exchange for free apps, these in-app ads are still disruptive, and marketers who aren’t respectful of the user experience and offering relevant ads won’t seek the benefits of in-app ads.
"Marketers also, rightfully so, have trouble navigating the landscape," she said. "As it continues to evolve, today there is a fractured partner ecosystem, creative standards that are still evolving and in flux, and difficulty measuring the true value of their campaigns.
"Marketers are also treating in-app ads like they do other types of display, which is wrong. The smaller screen size and task-driven mindset of the customer requires a different creative approach."
Forrester surveyed 61,167 United States consumers and 5,800 Canadian consumers for the North American Technographics Online Benchmark Survey (Part 1), 2013.
In-app ad strategy
According to the report, marketers need to use data to reach the right audience, avoid providing a disruptive experience and track the right metrics that match marketing objectives.
While consumers are spending more time in smartphone and tablet apps, marketers are being slow to meet the opportunity. Marketers need to take advantage of this engaged audience.
In 2012, around two-thirds of all mobile phone owners had apps, an increase of 22 percent from the year before. According to ComScore, 80 percent of time spent in key mobile media properties was in apps as opposed to browsers.
It is clear that consumers are spending time in apps and that marketers ought to engage this growing audience.
While 47 percent of consumers may ignore in-app ads, that still leaves more than half of consumers for marketers to reach. Additionally, around 40 percent of consumers said that they recall seeing ads for an app, app upgrade or brand and product in an app.
Ads promoting new apps are the most recalled, and 37 percent of these respondents also recalled apps for brands and products.
The smaller screen size of smartphones make it difficult for consumers not to notice ads, but they also may be seen as interruptive.
Additionally, only around one in four consumers finds in-app ads creative or relevant.
The good news is that half of U.S. smartphone owners who have apps and have seen at least one in-app mobile ad have researched or made a purchase after seeing an in-app ad.
A successful in-app ad from Chevy and Zumobi
At the end of the day, it all comes down to user experience, per Forrester's findings.
Marketers want their audience to see their ad as beneficial as opposed to disruptive and irritating.
The Forrester report cites Kiip as one example of a providing a good user experience. The company rewards users during “moments of achievements.”
For instance, when users of a fitness app finish a run, they receive an ad for Propel Zero powder accompanied by congratulatory text.
Marketers should also make sure they are reaching the correct audience through segmentation. Millenial Media, for example, has more than 150 unique audience segments based on a variety of information on consumers.
Ms. Wise also advises marketers to choose content that offers value to the user.
For example, Zumobi created an integrated, content-based ad experience for Chevrolet within the Motor Trend app. The branded loading screen appears, followed by an expandable Chevy ad.
If consumers clicked on the ad, it brought the user to Chevy’s six-part technology series that provided information about the car.
The campaign saw an 11.2 percent click-through rate and 37 percent engagement with the series.
"Two-thirds of U.S. mobile phones will be smartphones at the end of this year, tablet ownership is rapidly increasing," Ms. Wise said. "With this rising adoption, and the amount of time that these customer spend using app, there is a huge opportunity to reach your customers within apps.
"We are forecasting the mobile add budgets are going to increase significantly, and in-app advertising is going to contribute to that," she said.
Rebecca Borison is editorial assistant on Mobile Marketer, New York
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