In-app advertising: The complete guide to effective mobile ads
Mobile in-app advertising is one of the most common forms of monetization for apps, but it’s also a powerful tool for user acquisition marketers — and, really, for any marketer. With 7.26 billion mobile users around the globe, marketers absolutely need a mobile marketing strategy. As the time mobile users spend in-app continues to grow — up 35% from Q1 2019 to Q1 2022 — in-app advertising is an increasingly integral part of any mobile ad strategy. In fact, mobile ad spending saw 23% year-over-year growth in 2021, reaching $295 billion.
While anyone with a smartphone is likely familiar with in-app advertising from a consumer point of view, even the savviest digital marketers may not understand the ins and outs of displaying ads. In this article, we will explore how in-app ads work, how to use them effectively, and provide in-app advertising examples.
What are in-app advertisements?
While the definition of in-app advertisements is simple — they are ads that appear within a mobile application — the straightforward name can disguise the fact that in-app ads come in many shapes and sizes.
Types of in-app ads
- Banner ads
- Video ads
- Rich media ads
- Native ads
Within each type of mobile ad, there are also subcategories. For instance, rewarded video ads are very popular with app users, as are playable ads. Banners ads can also come in various placements, such as interstitial ads which are shown at natural transition points (such as between levels in a game). To take a deeper dive into the types of ads and how to pick the right ones for you, read Your guide to mobile ad formats.
How do you use in-app advertising?
Mobile in-app advertising serves two purposes, one for mobile publishers and another for advertisers.
In-app ads for mobile publishers: In short, in-app ads are how free apps make money App publishers use ads to monetize their products and audiences. Free apps and mobile gaming apps rely on ads to generate revenue. In-app ads can be used effectively in tandem with other forms of monetization. For instance, a free mobile game may use in-app ads alongside the ability to make in-app purchases, allowing the game to monetize users regardless of whether or not they make purchases.
In-app ads for advertisers: If you are a marketer looking to use in-app ads as part of your mobile marketing strategy, your priority will be using mobile ads to build brand awareness, drive sales, or even drive downloads. For example, a crypto currency exchange app looking to acquire new users may choose to advertise in a popular fintech app, where users may be more open to digital currencies and digital banking. And yet, a restaurant may run ads in a food delivery app to encourage mobile orders.
Other in-app ad players
Whether you are an advertiser or mobile publisher, there are other players in the mobile advertising ecosystem you should know.
- Ad networks are the intermediaries that keep the mobile advertising industry moving, connecting advertisers to publishers.
- Mediation solutions allow publishers to maximize ad revenue by connecting them to multiple ad networks driving competition and higher profits for apps.
In-app advertising workflow
- An ad is requested and travels through the mediation solution.
- It then goes to the ad network, which figures out which ad will pay the highest rate for that user.
- The ad is served to the user.
- If that user takes action based on the ad, the ad network informs the advertiser.
- The advertiser uses this data to optimize campaigns (often using a mobile measurement partner).
Mobile in-app advertising best practices
Every campaign is unique, and each app must land on the right mix of ads for its user base. Abiding by these best practices can help you ensure users have the best possible experience and maximize your return on ad spend (ROAS).
Choose the right ad formats
It’s essential to understand which ad formats will work best for your audience and within the flow of your app. Here you must focus on the in-app user experience. For example, you don’t want an ad popping up in the middle of critical gameplay of your gaming app.
In order to understand which ads work best and which factors influence their success, it’s important to test your ads. From testing pricing models to A/B testing the creative you use, your testing efforts will reveal how to optimize future campaigns.
Find the right audience
Matching the right ad to the right audience is always integral to campaign success. App publishers need to ensure their UA efforts are bringing in the right users, and advertisers need to ensure they are choosing the right ads.
Don’t overdo it
No matter how great your ad is, no one wants to be bombarded or have them interfere with their in-app experience. You will avoid annoying your potential customers by segmenting your audience and addressing them with relevant ads.
How effective are in-app advertisements?
According to recent data from Statista, full-screen video ads are the most effective for user acquisition at 44%. In comparison, in-feed video ads came in at 30%, and playable ads registered as 29% effective. Note that this data didn’t include rewarded video ads, widely favored among gaming apps.
Two popular in-app ads for gaming
Video ads are common, but rewarded video ads are especially popular among users. These ads give users in-app rewards, such as game currency, unique items, extra lives, or discounts, for watching an ad (often in a mobile game). Not only are users rewarded for their time, but advertisers will know that the viewer engaged with the ad.
Playable ads are also very popular. This type of ad is essentially stripped-down versions of a game that allow users to play a sample of the game before purchasing. To learn more about in-app advertising in mobile gaming, check out In-game advertising in mobile gaming.
Should I put ads in my app?
Whether or not in-app ads are suitable for your app is a decision each app developer must make when building their app. It depends on your business model, app-type, vertical, your users, and how you picture your in-app experience. However, apps in verticals like mobile gaming, food delivery, and health & wellness will find ads are a natural fit and a simple way to monetize the experience provided
Looking for ways to gain exponential app growth? Check out Scaling your app to 1 million users: The ultimate guide. Part 1 — App store optimization and user acquisition.