MM events

In-app advertising set for growth on the back of increasing brand demand

Tyrone Stewart

In-app advertising is set to experience strong growth as brands ask their agencies to invest more into it based on the evidence that in-app inventory delivers the best results across a number of key metrics, according to Fyber.

The mobile ad tech firm commissioned Sapio Research to conduct a survey of more than 500 respondents across eight sectors in the US, UK, Germany, and France. This survey, where half of respondents were from media agencies and the other half worked for brands, found that 77 per cent report they have asked their media agencies to invest in in-app inventory.

As in-app investment continues to increase, the channel is set to account for 43 per cent of overall digital advertising budgets within the next five years.

“Mobile devices are the consumer’s primary means of access to the Internet, and close to 90 per cent of time on mobile devices is spent in apps, so it’s no surprise that the mobile in-app inventory is of growing interest to media buyers and brands,” said Yoni Argaman, SVP of marketing and corporate strategy at Fyber. “It’s gratifying that agencies and brands are reporting better targeting capabilities, an issue that has long stymied ad spend in the channel. And with higher ROI and engagement levels, media buyers now regard in-app inventory as a key conduit to their target audience.”

Among media buyers in agencies, they view in-app ads as more reliable than web browser ads – almost 33 per cent citing better user engagement as the channel’s key benefit. For brands, the top benefit of in-app inventory is better targeting capabilities than mobile web, OTT, and desktop. Meanwhile, 68 per cent of brands use in-app ads to build brand awareness and 52 per cent use them to generate sales. According to both agencies and brands, in-app ads can improve campaign ROI by an average of 41 per cent.

In particular, gaming apps are seen as solid investments, with 60 per cent citing scale and reach, and 59 per cent citing high user engagement as reasons for investing in the vertical. 78 per cent of respondents have already placed ads in gaming apps – a figure that is set to grow to 91 per cent for media agencies and 87 per cent for brands. Playable, video, and opt-in ads are viewed as being the most effective in-app ad format.

Despite in-app advertising being favoured amongst brands and agencies alike, only 22 per cent of UK-based buyers invest 50 per cent or more of their budgets in in-app and just 32 per cent include it in at least 50 per cent of their media plans. These figures grow to 32 per cent and 39 per cent, respectively, in the US.

The reasons for that could be the challenges that in-app advertising presents, with 35 per cent of media agencies citing their ability to measure campaign effectiveness as their biggest challenge and 28 per cent of brands reporting in-app campaign performance and effectiveness measurement as their biggest issue.