We saw a record-high level of smartphone ownership in Q3 this year, 85 percent, according to comScore. As mobile apps become the go-to channel for advertisers, in-app mobile ad spend in the US will reach $30 billion this year. On top of that, mobile performance compared to that of desktop advertising is unmatched. For example, HTML5 display ads are more viewable on mobile, and pre-roll mobile video ads are more likely to be watched to completion. As consumption has shifted, advertisers rightfully understand that mobile is a critical way to get their message across.
But as in-app campaigns have taken off, misconceptions about the space have exploded in parallel. Here are three of the most common.
In-app advertising is driven by app install campaigns. For a long time, mobile app install campaigns fueled in-app spend. BI Intelligence, for instance, estimated that mobile app install ads accounted for about 30 percent of all mobile ad revenue in 2014. In-app ad units are purchased based on cost per install (CPI), cost per click (CPC) or cost per impressions (CPM). And the space is growing, with publishers aggressively competing for app-install dollars. This has created a market perception among advertisers, however, that direct response CPI campaigns are driving mobile spend. But they’re only part of the story.
Beyond performance, there are increasing opportunities for effective in-app brand marketing. This is the direct result of the mobile video explosion. Three out of four brand marketers say they expect digital video to be as important for branding as linear TV within the next five years.
Now consider the growth of mobile video. According to eMarketer, US mobile video ad spend hit a high of $2.62 billion in 2015—that’s one-third of all digital video spend in the market. And in three years, mobile video ad share will increase nearly 50 percent. Further, the Mobile Marketing Association claims that 75 percent of video served on mobile occurs in-app. As mobile video dominates consumer consumption, branding via in-app inventory will heavily guide spend. It’s not just a direct response channel.
Mobile in-app inventory is low quality. It’s no secret that there’s an abundance of mobile app inventory out there—perhaps even an oversupply. For example, in the mobile gaming category alone, 500 new apps are released into the App Store each day. That’s in a single store, not counting Google Play and other platforms. As a result, marketers often correlate the massive number of apps and in-app inventory volume with a shortage of high-quality inventory. In reality, while there is a lot of remnant inventory in the marketplace, premium inventory is widely available as well.
According to a recent AOL Platforms study, 75 percent of premium publishers will expand mobile inventory in the next year. High-quality inventory is only growing and becoming more accessible to marketers. At the same time, what those marketers often perceive to be low-value inventory, long-tail, niche apps, often have untapped value. Long-tail publishers provide inventory opportunities to hyper-target consumers in a given marketplace. Perception needs to be realigned.
Additionally, some brands see in-app ad campaigns, in particular, as being plagued by viewability issues and fraud. But the facts don’t bear this out, especially compared to desktop. Mobile advertising as a whole is more viewable because it’s built specifically for the device where it appears. Alternatively, relative to fraud, all apps distributed by top-tier app stores are vetted and approved, to some degree, by either Google or Apple. In-app data is also inherently "cleaner" since it is based on registered user information linked to Google or Apple. With this data in hand, the value of in-app inventory rises.
We can’t target audiences or track attribution. Perhaps the biggest myth related to in-app advertising is the perceived lack of data around mobile measurement. Forty-one percent of marketers believe that lack of attribution transparency is mobile’s biggest challenge. And, according to Fiksu CSO Craig Palli, marketers believe that "you can’t collect good data on results" with in-app campaigns. This misconception is born out of traditional reliance on cookies, and mobile is a cookie-less channel. But Palli adds that "the measurement capabilities on mobile are at least as good as the measurement capabilities on desktop."
Why? Mobile is rich in first and third-party data. It contains many persistent identifiers, including publisher first-party data that enables retargeting based on the types of apps being downloaded, and inherent mobile data like Device IDs, which are rarely deleted. Meanwhile, on desktop, brands struggle with sky-high cookie deletion rates. Among desktop users, each month, 28 percent delete first-party cookies and 37 percent delete third-party cookies. This creates a host of inefficiencies and inaccuracies, while undercutting true targeting.
We’re living in a mobile-centric world, and most advertisers recognize the importance of mobile advertising and in-app campaigns. However, as consumption and spend continue to rise, it can be challenging to follow all the changes taking place. Pointing out and debunking common myths about mobile app advertising will result in greater campaign success for marketers.
—Andrew Moore is vice president of International Mobile Demand at ONE by AOL: Publishers.