From push notifications to App Store Optimization (ASO), the modern mobile marketer pushes towards their goals with a mixed strategy that gives them every opportunity to target the right users at the right time. One of the most important components is in-app advertising, which enables marketers to reach users while they enjoy an app they already own. If you have a mobile app, you can utilize in-app advertising as an advertiser and as a publisher. This article shares the importance of in-app ads and how they work.

What are in-app ads?

In-app advertising is a monetization strategy for mobile publishers. Developers can offer advertising space in their app and receive payment for serving ads to their users at opportune moments in their user experience. A developer can also be the publisher and advertiser simultaneously. For example, if a freemium (free to install) app shares an ad that encourages the user to buy in-app currency or upgrade to the app’s premium service.

This monetization strategy makes it possible for many mobile apps to be free to install, making them far more likely to be downloaded by users. As of August 2021, 96.9% of all Android apps were available for free, making it a difficult ecosystem for paid apps to reach a large audience and encourage them to install.

In addition to boosting installs by enabling the app to be free, in-app ads also increase the overall media consumption of users worldwide. It has resulted in more ad networks focusing on advertising via mobile apps. These ads are served through a mobile ad network that connects the publisher’s inventory to the advertiser’s creative. Programmatic media buying has also changed the way in which ads are served. The mobile app will request an ad from the network, resulting in the network’s algorithms identifying and delivering the highest bidder’s ad in real time. 

Learn more about how to do In-App Advertising

Why are in-app ads important to mobile marketers?

In addition to the ability to offer your mobile app as free to install, there are several benefits to in-app advertising that marketers can use to reach their goals. Here are 6 reasons they are an important practice in the mobile marketing ecosystem for publishers, networks and advertisers alike.

    • In-app ads leverage the increased time users spend on mobile: When advertising to your target audience, you need to find the digital spaces where they can be reached. Without in-app ads, marketers risk missing opportunities to serve ads to their audience. As much as 90% of overall time spent on mobile devices is spent in-app. This presents ample opportunity to reach users and optimize your marketing strategy based on user activity.
    • Apps have a higher Click-Through Rate (CTR): When compared to mobile web, mobile apps achieve a significantly higher CTR when serving ads to users. A study by Opera Mediaworks found that in-app ads had CTR that was up to 1.3x higher than mobile web across all surveyed countries. This is supported by a Medialets report that found the average CTR for mobile apps is 0.58% while mobile web is just 0.23%.
    • Enhanced targeting capabilities: An app’s audience can be targeted based on criteria such as demographic and location. This gives advertisers enhanced targeting capabilities to reach their target audience and reach their marketing goals.
    • Natural and intuitive ad placement: In-app advertising can be placed at opportune moments through a mobile app’s user experience. This also means they can be less intrusive and more natural compared to traditional ads served on mobile web. Different ad formats also make it possible to engage users in several ways. For example, rewarded video ads offer users in-app currency as a reward for viewing an ad for a certain amount of time. This can be a smart way to leverage a user’s engagement with a mobile game to your benefit.
    • Increase revenue: In-app advertising offers opportunities to increase revenue and Average Revenue per User (ARPU). This is because there are several ad formats that can be used and developers can test a number of different methods to serve ads to their target audience. In-app advertising can also be used in conjunction with in-app purchases – a method known as hybrid monetization.
    • Optimize the user experience: In-app advertising can be seamlessly integrated into the user experience. This means that the mobile app selling inventory also benefits from offering a better user experience by ensuring that ads are not intrusive.
    • Increase user engagement and retention rates: With enhanced targeting capabilities and intuitive ad placements, mobile marketers can use in-app advertising to increase user engagement and retention rates. This will have an impact on Lifetime Value (LTV) and help marketers push towards their campaign goals.

Everything you need to know to start advertising in apps

Which ad formats are available for in-app ads?

If you want to use in-app advertising to reach your target audience, there are several formats to choose from. Here are 4 of the most popular formats used to convert users in-app.

  1. Rewarded ads: This is a format that enables you to reward users for engaging with an ad. For example, users can receive a discount or in-app currency for watching a video ad.
  2. Interstitial ads: These are expandable ads that can take up a user’s entire screen. They can include rich media such as video to engage users. The ad placement for interstitial ads is particularly important because they take up the entire screen – something that can either positively engage users or disrupt the user experience.
  3. Native ads: This is advertising content that matches the look and feel of the mobile app in which it is advertised.
  4. Banner ads: This traditional format that is synonymous with desktop and mobile web can also be used in-app.

If you found this guide useful, you may also be interested in The truth about alternative app stores and mobile game monetization. We also have a resource for How to feature apps on OPPO and Vivo’s app stores.

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In-app ads