Originally posted on thedrum.
In light of wider privacy concerns, in-app mobile has emerged as a major, scalable opportunity due to sophisticated measurement, a brand-safe environment, and the ability to demonstrate strong ROI.
Mobile advertising is experiencing its era of growth and possibility. In fact, the US mobile ad market will reach $169bn in 2022, accounting for 68% of total digital ad spend, according to eMarketer. What’s more, programmatic digital display ad spending on mobile far exceeds that on desktop in the US, with the former reaching $98bn in 2022 compared to just $17bn for desktop.
Yet, the digital advertising industry is contending with privacy restriction headwinds. Apple’s privacy changes have introduced new challenges for mobile advertisers where device ID has been core to all targeting and attribution measurement, while changes to cookie access on desktop has played a major role in forcing advertisers to diversify their investment channels. Meanwhile, brand safety challenges continue to plague agencies’ and advertisers’ minds, with 79% noting they are concerned or very concerned with brand safety when buying digital advertising.
With rapid growth comes rapid evolution and, today, mobile advertising is making strides in providing a high-quality and scalable way for brands to reach the masses in the shape of in-app advertising. There are three main reasons for the strength of app-based ads: sophisticated measurement solutions that capture high attention levels, a brand-safe environment, and a strong return on investment.
Bespoke measurement solutions
Data signals are experiencing a big transformation as a result of Apple’s privacy changes. In April 2021, the tech giant gave more power to people in terms of controlling how their data is used, providing individuals with the opportunity when using an iPhone or other Apple device to decide if they want to allow an app to track their moves and share their data. Revenues have taken a hit at prominent organizations built on digital advertising, such as Facebook and YouTube, but also for small businesses reliant on attracting customers through apps.
The upside, however, is that solutions are being developed to focus on privacy-safe audience targeting, and mobile remains a high engagement, top-quality channel to attract and retain users. In fact, a new iOS 14.5+ playbook from TikTok and Adjust found that “compared to early predictions, which placed opt-in rates as low as 5%, the situation looks incredibly positive for marketers,” with opt-in rates well over 30%, especially within sectors like gaming.
In addition, app users are usually extremely focused in terms of attention towards advertising content. Benjamin Hancock, global head of programmatic trading at CNN International Commercial, contributed to an IAB initiative on in-app advertising earlier this year, stating: “In-app advertising has emerged as a key channel enabling publishers to expand their audience and solve a specific challenge around content delivery. In-app users tend to be more engaged with high levels of interaction, enabling high-quality and differentiated products for advertisers.”
Advertising on mobile has promised a brand-safe environment for advertisers beyond that of other channels. A unique advantage for mobile advertising is that it’s inherently brand-safe. Think of the set-up when an individual opens an app on their smartphone – whether they’re ordering groceries from a delivery app or chatting with friends in a messaging app, there is no chance of random or user-generated content popping up on the screen and negatively impacting a brand. This is due to the nature of the mobile layout and unlike how it is in a web environment, where off-putting and unrelated content can appear across sites and next to a brand’s ads.
The other upside to this is the fact that, on mobile, the ratio of ads shown to users at one time is dramatically lower than on desktop. Users see one ad a time on mobile, giving that ad 100% share-of-voice on the screen, while on web, they’re often exposed to several different ads at once, making it harder for any one of those ads to leave an ‘impression’ on the user.
There has also been significant progress in terms of protecting audiences and advertisers from the impact of bot attacks and ad fraud. Solutions from cybersecurity companies like HUMAN are bringing greater levels of traffic protection to partners like AppLovin, while increased coverage against measurement and transparency standards like OM SDK and sellers.json provide verification and assurance you are reaching your audience the way you intended to.
Strong return on investment
Consolidation in the media landscape is helping to make the mobile ecosystem less fragmented and more efficient. For brands that have been built on traditional forms of digital advertising like TV and websites, embracing mobile as a channel can feel like a daunting excursion.
For a long time, mobile has been an underused channel for brands, largely because the mobile ecosystem has been fragmented with disjointed tech and non-transparent supply access – and that fragmentation has led to inefficiencies and value-reducing paths to buying mobile for many advertisers.
Fortunately, the picture is changing rapidly. Newer solutions in the adtech market are empowering brands to do more with their in-app spend, consolidating the mediation landscape and simplifying the task of finding the best way to reach premium mobile inventory. The AppLovin Exchange (ALX), for example, simplifies the task of finding premium mobile inventory by connecting advertisers and agencies to the largest selection of inventory available simply through their DSPs’ integration on the exchange. Most importantly, this inventory is made available through the mediation SDK that hosts the unified auction, giving advertisers the most efficient and direct access to that supply.
This kind of consolidation, alongside big advances in brand safety and measurement, points to in-app advertising’s promising and dynamic future.