Mobile marketers and media buyers are set to become increasingly more important to mobile developers over the next couple of years. eMarketer predicts that the proportion of revenue made up by paid apps will fall from 92.5 percent in 2010 to just 12.3 percent by 2014. With the percentage of paid apps that have been downloaded less than 100 times worldwide standing at 79.3 percent, it is increasingly challenging for developers to make paid apps work as their main revenue stream. As more high-quality free apps appear on the market, developers will increasingly turn to businesses that recognize mobile’s unique power as an essential marketing channel. For advertisers, it’s about choosing the most appropriate channels offered across apps and the mobile web. Even within advertising, there are a range of different formats to get products and services in front of consumers through mobile apps.
The most common mobile ad type being used at the moment is the in-app banner. Even though consumers say they are willing to view these types of ads in order to receive free content, interaction with these ads is notoriously low. While these static in-app ads may be the most common, 2012 will be the year of the HTML5, rich media, ad unit. These ads can vastly improve the user experience and increase engagement. Video ad units are in the same class as well. Recently, eMarketer reported that mobile video ad spend will increase from $37.5 million last year to $213.6 million by 2015. The increasing demand of these mobile ads is evident in the higher CPM that many developers can command.
Another great opportunity and something all advertisers should take into consideration is the use of location-based ads – with 88 percent of local online advertising projected to be delivered on a mobile device by 2016. Pew Internet and American Life Project recently reported that more than half of cellphone owners used their phone to determine what product to buy while in a retail location. With more customers using their cellphones in a physical store, the opportunity to utilize location-based ads over mobile devices is a marketer’s dream. These types of ads offer a way for advertisers to hyper-locally zone-in on potential customers and deliver genuinely useful and timely content and offers.
Yet in-app ads have one clear limitation, and the clue is in the name. A recent Forbes article stated that about 30 percent of mobile apps go unused a day after they are downloaded – leaving no opportunity to monetize an app. Alternative ad units such as push notification ads – delivered in the notification bar of an Android phone, rather than in- -app – can be less intrusive for consumers and used to monetize 100% of an app’s install base. According to a study by Harris Interactive, around 50 percent of clicks from in-app ads are accidental. With push notification ads, that number is close to 0 percent since it is very difficult for users to accidentally click the ads. This further drives up conversion rates and lowers advertiser CPA’s compared to in-app ad units.
Mobile is its own advertising medium and not a spinoff of ‘online.’ Approach this medium as such and establish relevant campaign goals that are aligned with mobile’s unique local and social offerings and varying ad formats. Mobile advertising will continue to prove itself as the most viable form of revenue for developers. We’ll see ad dollars continue to shift to mobile advertising as it is seen as less of an experiment and more of a sure-bet for successful campaigns.
About Inman Breaux
Inman Breaux is VP of Publisher Relations and Business Development at Airpush. Prior to Airpush, Inman was director of business development at Adenyo, a mobile advertising technology company, which was acquired by Motricity in 2011. Prior to his time at Adenyo, Inman held various positions in the digital advertising industry including the Rubicon Project. Inman holds a BA in Finance/Entrepreneurship from the University of Southern California.