The Upward Trend of In-App Advertising

In today's digitally-driven marketplace, mobile advertising has become one of advertisers' most effective channels to capture consumers' attention and marketers' preferred promotion channel. With cutting-edge data tracking and user targeting, in-app advertising can reach audiences with extreme accuracy.

According to App Annie's latest State of Mobile report, mobile engagement soared in 2020 as consumers across generations spent more time scrolling on their phones during the coronavirus pandemic. Marketers recognized this surge as mobile advertising spend grew 26% year-on-year to $240 billion.

U.S. mobile ad placements soared 95% YoY, with interstitials and video ads experiencing the highest growth among ad formats. According to Statista, mobile ad spending was $190 billion in 2019 and is expected to increase to more than $280 billion by 2022.

What is In-App Advertising?

The number of app downloads increased by 33% in 2020, up 25% from 2019. In-app advertising — the placement of ads inside your app – is a significant part of app monetization. Advertisers can strategically position floating banners, pop-up videos, or sponsored links.

Unlike other mobile ads that display when a user browses websites via a smartphone, these ads appear while a mobile user is engaged in an activity within a mobile app.

The coronavirus pandemic led to more time at home and, unfortunately, more time alone. People around the globe looked to their mobile devices to meet a wide variety of needs:

  • Emotional (e.g., fitness, gaming, music, shopping, social networking, streaming)

  • Functional (e.g., business, driving, finance, food delivery, and shopping — again)

We've witnessed the shift to digital in recent years, but COVID-19 significantly accelerated the existing trends. Among others, the widespread adoption of mobile apps and the understanding among brands that this channel should be a frontline marketing strategy.

Americans spend three hours a day engaged in mobile apps. With more apps of all types being developed and people of all ages using them, we can only expect this figure to increase further over time.

Paying for an Ad-Free Experiences

People don't go online to look for ads — they're looking for content (videos, blogs, images, music, etc.), and ads interrupt that experience.

More and more consumers are paying extra money to avoid the interruption of ads. Netflix based much of its brand identity on the promise that it will never feature advertising alongside its content. Hulu acquired millions of subscribers with an ad-free option that's double the cost of its regular version. Roughly 130 million users pay Spotify to listen to music ad-free. For $11.99 a month, YouTube Premium's subscription service offers ad-free viewing of all videos, offline playback, and exclusive, paywalled content.

You only get the attention and action you want from your ad if your target audience likes it. In-app advertising makes this goal less challenging as many mobile apps provide features that enable users to choose how they want to view ads. The flexible options reduce the odds of people choosing to hide or skip an ad.

Platform Diversification and Creatives

With the blueprints of almost every business continuing to evolve, we will indeed feel 2020's repercussions for the foreseeable future — including an even more significant increase in digital media investments through 2021. Companies have had to diversify their advertising creatives depending on which platform they're using and the audiences they're targeting.

With new regulations, the overarching impact of reduced personalized targeting opportunities (e.g., Apple’s IDFA limitations and Google's third-party cookies deprecation), and changes in consumer shopping habits, creative will stand as the winner in 2021.

There will be a surge in brands utilizing augmented and mixed reality ads, interactive ads, and more personalized options. This change tremendously benefits consumers and commoditizes the ability to experience products virtually. For example, consumers can see what furniture looks like in their home or digitally 'try on' different lipstick shades without leaving the house. This ultimately enhances a brand's e-commerce capabilities.

The stats strongly indicate that mobile apps can offer premier spots for your business's advertising and promotional needs. A recent McKinsey study found that 75% of U.S. consumers have tried a new store, brand, or different way of shopping during the pandemic. That said, within digital, there will be more diversification of platforms and channels used (i.e., there will be less reliance on the Facebook-Google duopoly).

In-app advertising shouldn't be just an afterthought during your lead generation and customer acquisition strategy planning. Companies don't just go where the crowds are; they go to the place where their target customers hang out.

With downloaded mobile apps, advertisers can quickly analyze users' demographics, interests, and location. This capability makes it possible to customize ad content for specific audiences. Advertisers can even offer deals based on the location of app users. Similarly, in-app ads can gain greater exposure and engagement since mobile apps will likely use them regularly. With channel diversification and creative strategies evolving, brands will benefit from new strategies that meet consumer needs and expectations.

Need help implementing in-app advertising? Achieving impressive results largely depends on the competency and reliability of your partner agency. At Jungle Communications, our team of marketing experts can help you design and implement in-app advertising that attracts and converts users. Contact us today to discuss your specific needs.

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