Charting in-app advertising

Over the next couple of weeks, were running content from our recently-published Programmatic Handbook. Here, Welby Chen, Fyber’s president and chief business officer, looks at the results of a survey of brands and agencies carried out by the company to gauge attitudes towards in-app advertising.

Why don’t brands and media agencies increase ad spend through in-app advertising and mobile games?  That’s the million-dollar – or rather, billion-dollar – question everyone in the mobile app industry wants answered. Despite countless reports from top market research firms, all of which are forecasting mobile ad spend to surpass other media channels such as TV, the collective mobile app industry, including mobile gaming, hasn’t felt the effects.

Rather than panic, maybe patience is all the mobile app industry needs to hear. “Advertising in games is in the first inning of opportunity,” wrote Activision Blizzard president and CEO Bobby Kotick and chairman of the board Brian Kelly in the company’s 2017 annual report. For those unfamiliar with baseball, Kotick and Kelly were making an analogy between the slow-moving nature of a
baseball game and the state of in-app advertising in mobile games.

To truly understand why brand ad spend isn’t flowing into in-app as much as expected, we surveyed brand advertisers and agency media planners from the US, UK, Germany and France, gathering over 500 responses, to find out what they think about advertising in-app and in mobile games. What follows are the top five highlights from the survey as well as a complete list of our findings.

Survey Highlight 1: Buy, Buy, Buy

Brand advertisers are increasingly aware of the exceptional growth of app usage and greater campaign success, which is requiring in-app to get the spending it deserves. Over two thirds (68 per cent) of brand advertisers primarily use in-app ads to build brand awareness and 52 per cent have used in-app ads to generate sales.

This is why 77 per cent of brand advertisers surveyed have asked their agency to start buying in-app. But brand advertisers need to move fast to win this newly accessible premium inventory.

Survey Highlight 2: The Value of In-app Advertising

According to brand advertisers, in-app ads can improve ROI by an average of 41 per cent.

While in-app is already competitive and prices for premium inventory are high, there is still plenty of inventory that is under-monetised, and the fact that fewer brand buyers focus on mobile app advertising gives early movers the opportunity to win more premium inventory for lower prices.

Survey Highlight 3: Reach Your Targeted Audience

The top benefit for agency media planners of in-app advertising is better user engagement (32 per cent), while the greatest gain for brand advertisers is targeting capabilities (27 per cent).

Because apps can collect first-party data with a user’s consent, app publishers use advanced audience filters to send buyers the exact impressions they are looking for, making it easier for advertisers to reach their targeted audience segment.

Survey Highlight 4: Engagement, Scale and Reach. Oh My!
A user’s attention may seem impenetrable when they are trying to raise their score, conquer the world, manage resources or complete a mission, but user engagement is stronger in mobile games, according to 51 per cent of brand advertisers surveyed. Another reason to invest in mobile gaming, according to 49 per cent of respondents, is scale and reach.

Survey Highlight 5: Dont Deliver an Ad, Deliver an Experience
When playable ads were introduced to the market, many wondered if they were merely a trend or would prove to be an effective way for app developers to acquire new users. Two years later, 28 per cent of agency media buyers surveyed said that playables were the most impactful for in-app advertising. Rewarded video came in a close second, with 26 per cent of media buyers surveyed considering it to be the most effective in-app ad format.

You can view the full results here. And you can read the entire Programmatic Handbook online here