In-app ad experiences improve as mobile spend increases: report
By Chantal Tode
October 23, 2013
Mobile advertising on Facebook is growing quickly
Increased use of mobile analytics platforms as well as the introduction of innovative ad formats and purchasing mechanisms will drive the global spend on mobile advertising to $39 billion in 2018, up from $13 billion this year, according to a new report from Juniper Research.
The report, "Mobile Advertising: In-App, Mobile Internet & Messaging Strategies 2013-2018," points to the dramatic success of Facebook in monetizing its native applications over the past year as an indication of the opportunities offered by targeted in-app advertising. The growth in real-time bidding is also supporting growing mobile ad budgets by enabling publishers to sell their advertising inventory more easily.
“There are many stats available which show the poor click-through rates of in-app banner ads at present, with many clicks being accidental,” said Siân Rowlands, a research analyst at Juniper Research, Hampshire, Britain.
“Rich media ads can disseminate a brand message much more effectively whether it’s through a movie trailer, mini game, etc.,” she said. “Further to this, we expect to see RTB pick up, as advertisers become aware of the potential which this payment mechanism has.
“In-app advertising we believe will move away from being a ‘punishment’, as formats such as reward-based, [and] opt-in advertising become commonplace.”
Mobile advertising continues to face challenges, with some brands still wary of mobile because of concerns that ads may be perceived as inappropriate or intrusive. As a result, the spend on mobile still remains disproportionately low compared to the high engagement levels that frequently occur.
While some advertisers are reluctant to embrace mobile, consumers are becoming more accepting of mobile advertising thanks to more recent trends such as the growing use of opt-in or reward-based ads.
Additionally, marketers are increasingly harnessing big data and location information to deliver mobile ads that are better targeted to users.
One way advertisers can increase mobile conversions is by adding mobile-optimized features such as a click-to-call button or by linking to the correct app store.
Driving app discovery
One of the biggest opportunities in mobile advertising is in-app ads.
A good example of this is Facebook, which is seeing mobile contribute 41 percent to its overall advertising revenue, up significantly from a year ago.
Facebook continues to fine-tune its mobile advertising offerings and recently announced it will begin rolling out video ads.
“One thing which I think Facebook has the potential to do really well in is their app install ads,” Ms. Rowlands said.
“The major storefronts such as Google Play and the App Store haven’t announced any big initiatives to send personalized app recommendations to users, and given the scale and targeting capabilities which Facebook has, I believe it has a huge opportunity to make a difference to app discovery here,” she said.
One way that advertisers are improving the in-app advertising experience is with a growing use of rich media ad formats.
Key findings from the report include that the fastest growing region, in terms of mobile ad spend, will be the Indian Subcontinent where spend will increase four times from 2013 to 2018.
“The market for mobile advertising, although still evolving, will definitely pick up,” Ms. Rowlands said. “We’re seeing announcements that, for example, Instagram is going to begin advertising, and that new ad formats and purchasing mechanisms are being developed.
“Self-serve platforms, such as the one which Foursquare has recently opened up, is enabling smaller, local business to also begin, or extend their advertising on mobile devices,” she said.
“As advertisers are educated about the benefits of mobile advertising, we would expect to see growth pick up.”
Chantal Tode is associate editor on Mobile Marketer, New York
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