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A Beginner’s Guide to In-app Advertising

For newcomers, in-app advertising can feel like a daunting process. Applift were one of the original pioneers of mobile performance marketing – we’ve compiled the key factors to consider and a list of helpful tips for those who would like to begin to reap the benefits of the highly lucrative practice.

In-app advertising

The Value of In-App Advertising

Global in-app advertising revenues are expected to hit $117 billion in 2020. Predictions of strong annual growth suggest that by 2025, they should almost double to $226 billion. As much as 90% of time spent on smartphones is now spent on apps. Apps have a higher click-through rate (CTR) compared to mobile web which makes up the remaining 10%. This makes in-app advertising a vital tool for the modern marketer – providing specialized targeting in a contained ecosystem with increased engagement and campaign tracking data.

With the ability to promote a business to thousands of users and drive quality traffic, even the simplest mobile advertising campaign can catapult an app ahead of its competitors. Achieving in-app advertising’s fantastic ROI is evidently achievable, but only when it’s done intelligently.

 

Key Considerations

Life-Time Value (LTV) is Paramount

App marketers use a variety of metrics to measure the success of a campaign. Choosing a model that drives quality traffic is of vital importance, and that means prioritizing life-time value (LTV). LTV, the projected revenue a user will bring from initial install to final interaction, is unlikely to be achieved through linear, traditional models like Cost Per Install (CPI). Better models, such as Cost Per Action (CPA), take into account users’ actions after the install phase. They examine app-use data in greater depth, thereby providing more reliable metrics to measure long-term ROI.

Multiple Mobile Ad Formats are Available

While there are exceptions (such as playable ads), mobile apps can be broadly categorized into the following four classifications:

An Example of an In-app Banner Ad
Banner
An Example of an In-app Interstitial Ad
Interstitial
An Example of an In-app Native Ad
Native
An Example of an In-app Video Ad
Video

Decide upon which format is correct for your business. Then dedicate time to researching the best way to make those ads effective. This is especially important for video ads, which have become an increasingly popular and profitable format. Would be video advertisers should take great care to ensure their ad is viewable.

Ad Fraud and Data Privacy Should be Taken Seriously

Despite industry strides bringing higher standards, ad fraud remains an issue. Inauthentic accounts are able to simulate downloads and in-app activity. Unless preventative measures are taken, mobile ad fraud can be of serious detriment to long-term ROI. Ad-fraud can be countered through deep learning algorithms that detect and predict fraudulent users or via reputable ad agencies that will have in-house fraud-detection specialists.

In addition, changing attitudes to data privacy are affecting mobile advertisers. Sweeping legislation such as GDPR and CCPA is changing the way that the industry operates. A significant overhaul of consumer data rights means that any mobile advertiser should be aware of the way they are using user data.

 

Advice for Beginners

Any first-time mobile advertiser should be sure to follow these steps:

Learn the jargon. Like any modern and evolving industry, there are plenty of mobile advertising acronyms that can appear daunting. But once learned, they will make the process more accessible and understandable. Being able to distinguish the differences between CPIs, CPLs, CPSs, and CPAs will go a long way.

Do the legwork. Identifying your target audience, ideal keywords, and placements while creating high quality graphics, ad copy, and an app store landing page is fundamental to achieving desired results.

Start small then optimize. Until you have worked out what works best, take things slow. With mobile advertising, you have the power to determine your budget in advance. Take advantage of this and measure clicks, downloads, and actions on a timed basis. After reviewing results, optimize your campaign by altering your ad copy, graphics, and placements. Only then should you expand your budget.

Choose a budget that works for you. There is no single magic budget that works for every company. The budget you allocate should be very much dependent on your business. If, however, you are looking for a guideline, keep in mind the advice of the US Small Business Association.

Use CPA not CPI. Avoid superficial metrics such as CPI. For the reasons mentioned earlier, using a CPA model will provide a better measure of long-term ROI.

Get expert assistance. Learn about the role of ad networks, DSPs and ad exchanges. There are many reputable organisations dedicated to making the app advertising experience safer, more efficient and more effective.

If you would like any assistance entering the world of in-app advertising, contact us at Applift. 

Based in our Berlin office, Aparna leads the marketing team at Applift.