Statistics show that mobile advertising (in-app) accounts for over 65% of all digital ad spending worldwide. The average CTR for in-app video ads is 7.2%, and the average conversion rate for rewarded ads is 3.96%, which is higher than other advertising formats. But to understand whether in-app advertising is the right choice for promoting your app or not?

What is In-app Advertising and Who Benefits From it?

In-app advertising (IAA) refers to ads displayed within other mobile apps that monetize through embedded ads. This type of advertising helps brands achieve various marketing goals, such as boosting conversions, retaining users, increasing user acquisition, and enhancing brand awareness. We’ve discussed other app promotion methods here.

According to a report by Data.ai, in 2023, device owners started spending more than 5 hours a day on average in apps. This indicates a growing interest in in-app traffic.

In-app traffic consists of users who click on ads from within another app. For example, suppose someone is playing a game, and after a certain time, an ad pops up offering "Get a 10% discount on food delivery when you install UberEats". The person clicks the ad and installs the delivery app.

Users who access the app from mobile websites are not considered as in-app traffic.

How Does In-App Advertising Work?

The mobile market consists of two sides: buyers and sellers.

Buyers include developers, brands, agencies, ad exchanges, and DSP platforms. Their goal is to display ads across various platforms. Sellers include publishers and SSP platforms, for whom in-app advertising serves as a monetization strategy, using the app as a platform for ad placement.

A broker acts as the intermediary between the buyer and the seller, selling advertisers the tools publishers provide. An app that wants to purchase ads sends a request to the ad network, which then selects the highest-paying advertisers based on algorithms.

Additionally, there is a DSP platform that buys online ads and an SSP platform that sells ad inventory at the highest possible price.

In-app traffic is typically used in verticals like gaming, dating, betting, and gambling. In-app advertising is more in demand for these industries because their products are packaged within apps. Additionally, in-app ads are popular in gray areas, where the rules for ad placement are more lenient and moderation is less strict. Launching ads for dating and betting on platforms like Facebook and TikTok is more challenging, while gaming is easier since these platforms already have an audience from other games.

Types of In-App Advertising

In-app advertising comes in several formats:

1. Interstitial. This format displays a full-screen ad between actions within the app. It is usually video or interactive ads, but sometimes it can be a static ad.

   

2. Banner. This involves showing a static or dynamic banner (320x50 or 300x50) in a specific part of the screen.

   

3. Native. A subtle form of advertising where the ad seamlessly integrates with the app's design.

   

4. Rewarded. After viewing this type of ad, users receive a reward (such as infinite lives in a game, coins, tools, etc).

   

5. Interactive. Users engage with the ad by acting within the advertised app, after which they are prompted to install it.

   

6. Video Ads. Video ads can play during user-generated videos or in an interstitial full-screen format. The video ad takes over the app's interface until the user either finishes watching it or clicks the close button after a set time.

   

The technical requirements for ad creatives on major platforms were covered here.

In-App Advertising Networks Explained

Mobile advertising networks work like platforms that allow developers and advertisers to reach audiences through apps available in stores. This article highlights some of the most popular ad networks.

Applovin

Applovin specializes primarily in native advertising. This platform operates on CPC and CPM models and offers a wide range of tools for creating creatives. Additionally, the network provides user acquisition campaigns optimized for specific events.

Vungle (Liftoff)

Vungle (Liftoff) focuses on acquiring traffic through CPI and CPM models, specializing in in-app video advertising. On Vungle (Liftoff), you can upload your custom video or order one to be created. The platform includes special algorithms for A/B testing, audience segmentation, and evaluating the effectiveness of ad campaigns. In your account, you can view statistics on app downloads and revenue.

Unity Ads

Unity Ads targets the gaming industry and offers advertisers interactive and rewarded in-app ads. Payment is made either per download of the advertised app or per video view. A unique feature of the platform is the automatic optimization of settings in the account. This platform may have restrictions for gambling ads.

IronSource

IronSource is an ad network integrated with Adjust (a mobile analytics service). Thanks to MMP integration, it automatically receives attribution data and in-app event information via callbacks. The platform offers various ad formats: native, interstitial, banner, and video ads.

Bigo Ads

Bigo Ads is a global network operating worldwide and aggregating quality traffic from social media and international developers. Bigo Ads allows the placement of both dynamic videos and static creatives.

Mintegral

Mintegral provides services for user acquisition, monetization, and creatives for mobile games and apps on Android and iOS. This network works with over 2,000 advertisers in the Asia-Pacific market and serves more than 600 million impressions daily. Mintegral allows for the acquisition of quality leads and the optimization of ad campaigns using algorithms.

Appnext

Appnext gathers data on user interests based on installed Android apps and selects relevant ads. The platform offers two types of campaigns: ongoing and onboarding. Ongoing campaigns involve the placement of standard ads with CPI payment models, suitable for optimizing purchases and orders. Onboarding campaigns involve placing ads in pre-installation windows or recommended apps during the activation of a new mobile device. This type is excellent for apps with high user engagement.

Benefits and Drawbacks of In-App Advertising

According to Statista, the number of mobile device users will reach approximately 7.49 billion by 2025. This indicates that in-app advertising can be effectively utilized to benefit businesses. Let’s examine the pros and cons.

Benefits of In-App Advertising:

1. Broad Audience Reach. As mentioned earlier, users are spending more time on apps. Consequently, in-app traffic is increasing, offering the opportunity to reach new users who are not active on traditional channels like Meta, Google Ads, TikTok Ads, and others.
2. Moderation. Generally, in-app networks have more lenient advertising rules compared to traditional channels like Facebook, Instagram, Snapchat, etc. This flexibility allows the launch and approval of campaigns in grey areas, such as crypto, dating, gambling, betting and others.
3. Gamer Audience. This is a significant advantage for gaming apps, as they can acquire audiences directly from their competitors within similar game genres.

Despite the significant advantages, in-app advertising also presents some challenges outlined below.

Drawbacks of In-App Advertising:

1. Complex Campaign Optimization. Most in-app networks lack built-in optimization for in-app events, a feature that works well in larger ad networks. Some in-app networks even lack optimization for app installs. Optimization involves gathering extensive statistics and disabling ineffective placements (apps) within the in-app network. A list of ineffective sources within the network is known as a "blacklist," while a list of effective sources is called a "whitelist." Depending on the app category, the same source can show varying effectiveness.
2. Gamer Audience. If your app is non-gaming, this factor could be a drawback, as there are fewer app categories where acquiring such an audience is cost-effective.
3. Fraud. Fraud refers to the deliberate manipulation of ad display data or user interaction. AppsFlyer said mobile market fraud reached $5.4 billion by early 2023. Install fraud on iOS increased by 76% compared to 2022, and post-attribution fraud on Android rose by 154% over the same period. This underscores the importance of advertisers being prepared for fraudulent activities and investing in anti-fraud tools in advance.
4. High Entry Barrier. In-app ads can be a costly channel for smaller apps. The minimum required daily budget can reach up to $1,000, as seen with platforms like Applovin.

In-App Advertising Is An Effective Tool for Promotion, But Not For All

In-app advertising is an effective tool for both developers (as a source of revenue) and advertisers (as a promotional channel). To attract new users and increase the number of installs, advertisers need to choose the right formats and platforms while considering the advantages and disadvantages of this type of advertising.

Recommendations for Launching In-App Advertising:

1. Ensure that your product is suitable for an audience composed of up to 90% gamers.
2. Make sure you have enough budget and time to gather extensive installation data at the sub-source level and to build your blacklist/whitelist.
3. Plan ahead on how you will check traffic for fraud. It may be worth investing in an anti-fraud tool or utilizing the built-in features within your MMP platform.

At Acquisition.mobi, we run mobile app advertising campaigns and work with various payment models. We offer access to major ad sources and have experienced designers who can create creatives of any complexity. If you’re interested in mobile app advertising, contact us at info@acquisition.mobi.