In-app advertising is a dual-purpose technique that will dramatically improve the profitability of your mobile app. For the publisher, you can advertise the application to reach your target audience, while simultaneously earn from the ads that appear within your app. Find out why in-app advertising is the key to monetizing your app, and why you need to integrate this practice as soon as possible.
How to benefit from mobile ads?
There are millions of apps available in mobile stores right now, most of which use the “freemium model” for generating revenue: the app is free to download, and incentivizes in-app purchases in the form of subscriptions, coins for games, etc. Typically, the apps managed under this model rely on a relatively small group of paying customers to generate the desired revenue, so don’t expect your entire consumer base to eat up your in-app sales. It’s normal for the exact opposite to happen.
The secret is that they also benefit from the large audience of exclusively free users, watching ads within the app. The advertisers pay you as clicks, and sales are generated, and you turn a profit!
Many believe that paid marketing is now the only way to scale an app’s distribution – needless to say, if ever there was a time to jump on a bandwagon, it’s now! The four most commonly-used ad formats for in-app advertising – in order of appeal and consequential effectiveness – are:
- Banner ads
- Interstitial ads
- Rewarded video
- Playable ads
Why Integrate In-App Advertising Into Your Mobile App?
In-app advertising, when done right, is a fool-proof monetization strategy for app developers. An app developer is paid for sharing advertisements within the app, which further drives global usage of mobile devices and worldwide media consumption – driving more business back to your platform.
When compared to traditional ads featured on websites with mobile optimization, in-app ads blew them out of the water for the following key reasons:
- Better device tracking methods. In-app advertisements track user behaviour and activity by using the device ID instead of cookies. Cookies typically last for only about 24 hours, whereas user IDs will last the app developer and advertiser up to 21 months, on average. This is approximately 630 times longer than the lifetime of cookies!
- Greater access to user data. In-app ads are informed by a wider variety of user data, enabling them to create more personalized advertising experiences.
- No ad blocking (yet). Advertisements on websites are vulnerable to being excluded by in-browser ad blockers. This technology has not yet been universally developed to block advertisements in mobile applications.
- Time spent on mobile apps. The time users spend on mobile applications is much more than what they spend on mobile websites. (About 630x more, in fact. The average time spent in a mobile application is 3 hours and 10 minutes, whereas people will spend a mere 33 minutes on a website, even when it’s optimized for mobile use.)
Mobile applications have become central to everyday life. More than 25% of the time spent consuming media is spent on a mobile application. Further, 85% of the total time spent using a mobile device is dedicated to the use of a mobile app. This gives an unprecedented amount of time for advertisers and app developers to get exactly the data they need to appeal to their target audience – and expand!
The market is already clearly highly profitable. By 2021, in-app advertising was set to triple in value from 2016 ($72 billion to $201 billion). Mobile app use isn’t showing any signs of slowing down, either, so in-app ads are following the demand. In-app ads spending see a sharp increase year-over-year. As the market grows, advertisement diversity increases, since the types of applications in demand continues to diversify. Though gaming applications continue to take the lead in the industry, shopping, and various forms of entertainment are gaining on it. Their market performance is a clear indication that you need to join the trend. For example, the highest-grossing gaming apps of the first quarter of 2020 include:
In-app advertisements are growing significantly in their importance to monetization of apps, whether they follow the “freemium model” or are pay-to-download. Implementing mobile ads will massively increase the profitability of your app, as brands and agencies are flocking to the technology due to the high accuracy of user data collection and effectiveness in conversion.
The article is based on the data from Apptica – a top-notch Mobile Ad Intelligence & Store Analytics Tool that provides mobile experts with accurate data on mobile applications and in-app advertising.