In-app advertisements are never ceasing to change. It is not that easy to track each format and keep the finger on the pulse of the mobile app advertising trends. Still, it’s not necessary for experienced advertisers, app marketers, and app publishers who can separate the grain from the chaff.

To make this task easier for you we decided to uncover the latest emerging mobile advertising trends and highlight mobile ad formats that will become popular in the near future (2020-2022). GDPR novelties, new safety measures, and other transformations that are here and ‘long to stay’ are also on the agenda. Buckle up, we are starting.

The ad revenues obtained from in-app advertisements will almost triple by 2025 and reach $226 billion according to the market analysis reports. Plus, because of COVID-19, the time spent on mobile gaming in 2020 significantly grew. Naturally, people started spending more time on mobiles. Accordingly, the global App Store and Google Play ad spend increased and are expected to grow over the next couple of years.

global in-app spending

Differences between mobile app advertisements and web

Before you air mobile app advertisements, it is important to realize that this medium is specific since the environment itself is completely different from the web. While in a web environment ads are served through the browser, app ads appear only inside of the apps. Oftentimes, the ad formats become an irreplaceable part of the in-app experience. Let’s take a deeper look at how in-app mobile advertising is different from the web and mobile web.

Web/ mobile web Difference criteria In-app
Cookies Tracking Device ID
Web footprints (website activity, shopping history, browsing history) Types of user data collected Device type, GPS data, gender, age, etc.
Browser-based ad blockers Blocking ads No ad blockers inside of the apps
Half an hour Median usage Three hours and eight minutes

As it gets clear, mobile app advertising offers a variety of opportunities for those brands that strive to target based on the first-party data (which gets available when the user opts-in for data collection). If the user opts in for data collection and personalized advertising, it grants advertisers the right to serve targeted ads on the user's device. App publishers meanwhile obtain payment per each click on the ad, (view or action - according to the payment model), which has been placed inside of their app.

Advertising on mobile apps is also advantageous from the following standpoint: geo-targeting mobile technologies can reach users wherever they go utilizing their current geolocation data. Thus, this feature becomes indispensable for geo-marketing campaigns.

in-app targeting

Mobile in-app advertising formats: all-stars

2020 was a giant leap in terms of in-app advertising effectiveness, and it could be fair to say, it was achieved due to the recognition of specific ad formats such as video ads, native, and display ones.

app video ad formatsVideo ad format. By 2020, the mobile in-app ad spend is expected to reach the bar of $380 billion, with video ad formats being the greatest contributors (they bring in over 30% revenue share). In fact, video ad format shows 5 times higher effectiveness and stronger revenue bringing properties than already exhausted banner ad format.

While Facebook’s ad revenue mostly consists of video advertisements, experts point out, large companies are willing to use video mobile app advertisements for promoting premium content. This happens because videos take more resources and design efforts. Yet, video ads continue to the leaders of mobile app ads because they deliver the best engagement rates.

app native ad formatNative ads. Native advertising on apps is very beneficial: users admit being ready to share the content of native ad format with others when the average in-app ads can be taken as annoying and intrusive. That happens because native ad formats blend with the page’s content so it can exist everywhere - social media feeds, in search listings, content recommendations, etc.

During the last couple of years, however, the users learned how to distinguish native in-app ads from the rest of the content. It didn’t affect much the effectiveness of this mobile ad format. Still, native ads should also deliver valuable content and have the ad marks, otherwise, they may increase the irritation at the point when the user finds out that the material is commercial.

app display ad formatDisplay ad format. Display in-app mobile advertising that encapsulates the text, banner, audio, and video ad formats brings around 20% revenues of the total. Within a variety of display units, reach media ad formats stand out because the CTR of these ads outperforms the CTR of an average banner on 250% (due to the abundance of elements).

Because of COVID-19, the time spent on mobile gaming in 2020 significantly grew. Naturally, people started spending time on mobiles more. Accordingly, the global App Store and Google Play ad spend increased and are expected to grow over the next couple of years. Emarketer also predicts that digital display ad spending will increase by 19.2% by the end of 2020 and will hit almost $85 billion.

As more and more publishers and advertisers embrace in-app formats as their main source of revenue, gradually in-app advertisements gain momentum. According to statistics, in-app purchases remain to be best-performing in the in-app advertising market in terms of revenue generation. They make a great part of the publisher's mobile income and don’t harm the user experience. IAP combined with the right ad formats can even complement user experience and elevate the number of clicks, views, and interactions.

Playables. People are getting massively addicted to the gadgets and apps they use on the daily basis. That means the marketers and advertisers will have to shift their gaze at mobile apps that people use most of their time.

A remarkable mobile in-app ad innovation delivered a couple of years ago was called “playable ad format”. It gave the advertisers a chance to advertise in-app by serving a short demonstration of the game inside of the ad. As a rule, playables also appear inside of the games since the target audience often matches.

Playables already project several times better performance than previously leading interstitial ads. Such mobile in-app ads give the user a chance to “safely” try the products without any strings attached and without going an extra mile for authorization.

Augmented and virtual realities. It’s estimated that in the nearest future the in-app advertisement will be heavily influenced by the virtual and augmented reality apps because they help to appeal to people emotionally.

It’s hard not to stay inspired by the ad campaigns like one served by Taco Bell that merged the user’s face with a taco. As practice shows, such ads can go viral in social media and reach a million views.

The in-app advertising market based on AR and VR technologies is still developing so it’s not oversaturated and there’s a great chance for the app publishers and app marketers to plunge into the opportunity. For instance, the business may use augmented reality ad types that use user’s GPS or AR in-app ads that change and augment the world.

Mobile app advertising: safety issues

Smart digital advertising technologies have brought to life a side-effect known as ad fraud which now reached in-app advertising and mobile ecosystems. Last year ad fraud has deprived advertisers and app marketers of millions of dollars.

According to the Future Digital Advertising and Artificial Intelligence & Advertising Fraud 2019−2023 report, without protective measures taken and ad fraud detection tools implemented, in just a few years the problem may cause 100 million loss daily.

In-app advertisement is brimming not only with click bots but also with malware that simulates installations and targeted actions (which makes advertisers and app marketers pay more).

In such circumstances, brand safety will remain to be one of the most important concerns for mobile in-app advertising. The advertisers, ad networks, publishers, and ad exchanges will have to work together more closely to solve this problem, increasing transparency with GDPR and shifting to white-label blockchain fraud-resistant ad solutions.

In-app advertising and new GDPR landscape

GDPR will affect in-app mobile advertising in the same way it affects the entire digital advertising medium. Some marketers will have to find new ways to target their audiences without collecting the personal data of EU residents, the others will shift to the Blockchain ad platforms.

Blockchain platforms can provide a solution to problems associated with automated in-app advertising. Providing a full audit on every transaction or operation, blockchain ensures that every party gets access to the data and identifies every chain participant.

Theoretically, the result of GDPR standards implementation into the in-app advertising market must be a transparent advertising space, equally beneficial to all participants, (including end-users, sites, and apps that will have to be adapted with opt-ins and tools for personal data management).

How to make in-app advertising work impeccably?

How to advertise on apps when you are only on the stage of planning your creative and selecting the platform?

  • Choose ad formats wisely. Classic mobile banners will suit you best if you strive to find the most affordable format for advertising. Go for video ad formats if you have plenty of information to deliver. Select natives for unintrusive experience and interactive playable for memorability and engagement.
  • Select suitable sizes. Large resolutions may be flattering to the eyes and more memorable. However, if you want a better reach, select medium and smaller ad units - there’s a large number of smaller ad slots available on the in-app market.
  • Select the ad platform. In-app ad formats can be bought and sold automatically on DSP. Before this, find out what is programmatic advertising in order to understand who are the participants of programmatic auctions and their roles.

How to advertise on apps with DSP

Choosing the mobile in-app advertising format is only part of your app campaign effectiveness equation.

Mobile in-app advertising might work out extremely well, a little less well, or not well at all. Everything will depend on the additional circumstances such as targeting users, correctly picked for your platform, ad format and size, ad placement, access to the right mobile ad network, and a bunch of other important factors.

In order to make the most of mobile app ads, learn who’s the target audience for in-app ads you're going to advertise in, and only then start targeting viewers using a demand-side platform.

  • Geography. It is important for the business to serve in-app ads to the relevant audiences which are determined by such factors as language, country, or city. Any given mobile ad format can be significantly more effective if the developer provides such information to the advertiser.
  • Age, profession. Personal information about your users will be very valuable for in-app advertising. Any information that can help boost in-app advertising conversion can work for you, thus you can narrow down the viewer category according to their age, location, gender, and other criteria. The more information you have - the more profitable campaigns will be (since ads get seen only by people who are most likely to convert).
  • Daily spend and frequency. If you launch a campaign on DSP it will be a good practice to predefine how much money you are willing to spend per day on the campaign (daily spend) and how many times one unit will hit the gaze of the viewer (frequency). By limiting the number of views and daily spend you can successfully prevent overspending and ad fatigue.

To sum up

If you’re planning to use in-app advertisements, think about ad format and placement that can make your message noticeable, (yet not annoying), learn who’s your user, and choose a good demand-side platform that will connect you to the pool of global publishers.

SmartyAds demand-side platform is a forward-thinking GDPR and privacy-friendly technology where advertisers can serve the most innovative ad formats and perform robust in-app advertisement optimization. Targeting, budget, frequency, and the rest of the individual settings are available in a single convenient interface through which you can manage your campaign and optimize the flow in real-time.

Need to launch really effective mobile app advertisements? Sign up at SmartyAds DSP!

Written by
Irina Kovalenko, CMO of SmartyAds
June 2018