Attack Of The In-App Ad

ATTACK OF THE IN-APP AD With more than 10 billion apps downloaded just last year, the mobile app is taking over. Now, marketers are accessing the app marketplace with in-app ads, hoping to grab a piece of the mobile media pie. RISE OF THE APP Since the first app became available in 2008, mobile apps have caught on in a huge way. Research firm IDC forecasts that worldwide app downloads will increase more than ten times over by 2015. Mobile Application Downloads Worldwide = 10 Billion Downloads 2010 10.7B 2015 182.7B IN-APP AD SPEND With so many apps being downloaded and used every day, marketers aim to capture consumers with in-app advertising. 100M 200M 300M 400M 500M 6OOM 700M 800M 900M IN-APP ADS CURRENTLY REPRESENT $860M 5% OF TOTAL MOBILE AD SPENDING. BY 2014, IN-APP AD REVENUE IS EXPECTED TO SURPASS $86O MILLION. DISLIKED, YET MORE EFFECTIVE How consumers feel about in-app mobile advertisements. Among 18-34 Year Olds Among Smartphone Owners 54% 46% 52% 40% Don't like in-app Don't mind / are indifferent to in-app mobile ads Recall ads seen in mobile apps Recall ads seen while mobile ads surfing mobile web GET IN THE GAME Mobile games are the dominant sector of in-app advertising. Successful games, most notably Angry Birds, offer full versions of the game for free to end users and fund them through in-game ads. In-Game Ad Spend 2010 2015 ANGRY BIRDS AD SPEND The game's developer, Rovio, reported that by the end of 2010 it expected to generate $1 million per month from in-app advertising on the Android platform. In-App Revenue Vs. Sales of Virtual Goods* ............................ S87M $894M Monthly ad revenue per $1 app user Monthly virtual goods revenue per app user $8 *September 2010 THE SHIFT Recent studies suggest app developers will soon shift away from the initial app purchase as the focus of app monetization. Instead, developers will focus increasingly on in-app advertising and in-app purchasing to fund business models. App Developers Using Various Business Models 2010 + Percent Change (2010-2011) 2011 70% 60% 59% 59% 56% 50% 48% 43% 42% 40% 40% 34% 30% 30% 27% 27% 20% 13% 10% Brand Loyalty & Engagement App Store Sales In-App Advertising In-App Purchases DESIGNING CAMPAIGNS Three recommendations for marketers adding in-app ads to their broader marketing strategies. LOOK BEYOND THE CLICK TARGET AUDIENCE, NOT DEVICE THINK OUTSIDE THE RECTANGLE ................. Some marketers will design in-app In-app ads have a slew of creative possibilities including sponsorships, interstitials, audio, and video. In-app advertising has a number campaigns around a specific device - often a hot, new one. Instead, they should consider the message and of success metrics that are all measurable, including interactions, shares, "likes," texts, calls, apps downloaded, views, coupons redeemed, and impressions. Marketers should avoid defaulting to clicks and clickthrough rates because they're familiar. Marketers should evaluate what target audience, and tailor the strategy accordingly. In-app ad formats that work across devices help creative strategy will complement their campaigns best and help meet their broader goals. markets think about audience first. Sources: IAB, Mashable, Flurry, Juniper Research, InsideMobileApps.com, IDC Research, Appcelerator, Parks Associates, Compete BuySellAds.