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In-app advertising vs mobile web advertising: Which is the better investment?

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In-app advertising vs mobile web advertising: Which is the better investment?

Here’s a quick rundown of the pros and cons of advertising [1] with in-app ads versus on the mobile web [2].

In-app ads

Pros

Mobile apps are where consumers are focusing their attention

The biggest advantage of in-app advertising is that consumers spend most of their mobile device time in apps. According to eMarketer, mobile apps account for nearly 86% of time spent using smartphones [3]. In absolute terms, the average adult in the U.S. is spending 2 hours and 25 minutes a day using mobile apps, a more than 10% year-over-year increase, compared to just 26 minutes on the mobile web.

For advertisers wanting to reach consumers on mobile, mobile app advertising appears to be a safe bet.

In-app ads often offer users a better experience

While consumers generally don’t like advertising, some ads are more tolerable (or even likable) than others, and advertisers tend to have a greater ability to create better ad experiences with in-app ads.

Publishers of mobile apps, as well as mobile app networks, have designed ad formats that are ideally suited to mobile apps. Many are designed to integrate seamlessly into the UX of the mobile app. For example, Instagram’s Carousel Ads [4] and Snapchat’s sponsored geofilters and lenses.

Ads on the latter are often similar enough to user-generated content that users don’t even notice they are ads, making them far more likely to engage.

Cons

A few top apps dominate

While consumers are spending nearly 85% of their mobile device time in mobile apps, that time is heavily concentrated in a few top apps. In fact, numerous studies over the years have found that the top five apps account for upwards of 80% [5] of all time spent in mobile apps.

That means that if advertisers want to take advantage of the in-app advertising opportunity, they’re likely going to have allocate a significant portion of their budgets to a handful of dominant companies.

Scaling can be more difficult

Although advertisers can purchase in-app ad inventory through networks like AppNexus, Google AdMob and InMobi, many networks have their own ad formats that advertisers need to prepare creative for.

And, of course, in order to take advantage of the innovative ad offerings being developed by dominant players such as Instagram and Snapchat, both time and money needs to be invested in the creative – the cost of which can be significant, as can the cost of the ads themselves.

Mobile web ads

Pros

There’s more diversity

While consumers spend far less time browsing the mobile web than they do interacting with apps, there are a lot more websites than mobile apps and many large publishers with desirable audiences either don’t have mobile apps or have far more usage of their mobile websites.

Given this, mobile web ads allow advertisers to reach more diverse audiences across a wider range of properties.

Standard formats exist

Unlike in-app ads, which often have network and platform-specific formats, advertisers can reach audiences on the mobile web using standard ad formats.

In fact, the Interactive Advertising Bureau (IAB) recently unveiled a final version of its Standard Ad Unit Portfolio [6], which includes a set of flexible size ads based on aspect ratios, not fixed dimensions, making it much easier for advertisers to create ad creative that displays properly on both desktop and mobile devices.

Mobile programmatic is thriving

Despite challenges, advertisers love the benefits of programmatic and it now accounts for the majority of display ad spending. Advertisers’ infatuation with programmatic extends to mobile and in fact, mobile programmatic is one of the primary drivers of programmatic growth overall. According to eMarketer, mobile now accounts for the majority of programmatic ad buys [7] for both display ads and video ads.

While in-app programmatic is seen to have a bright future, the in-app programmatic market is not nearly as developed, making it less appealing to advertisers looking to scale programatically.

Cons

Ad blockers are growing in popularity

According to PageFair [8] (PDF), use of ad blockers grew by 30% last year, and a surge in the use of mobile ad blockers is largely responsible for that growth.

All told, PageFair says that of the more than 600 million devices using ad blocking software, well over half (62%) are mobile. Most worryingly for advertisers, mobile adblock usage is still relatively low in North America and Europe – 94% of mobile ad blocking is currently taking place in the Asia-Pacific region – so there’s a potential for real disruption if and when mobile ad blocking gains traction in these markets.

Ad fraud is a big problem

Fraud is one of the biggest problems [9] advertisers face in today’s digital ad ecosystem, and the ad fraud risk is widely seen to be higher on the mobile web than it is in-app.

The widespread use of programmatic to buy mobile web ad inventory is one of the reasons for this and according to one study [10] conducted by AppLift and Forensiq, up to a third of programmatic mobile ad impressions could be fraudulent. That’s bound to worry advertisers who are increasingly concerned about ad fraud and brand safety [11].

Conclusion

So which is better: in-app ads or mobile web ads? As with most advertising questions, the answer is: it depends. Given the amount of time that consumers spend using mobile apps, it is increasingly difficult for brands to shun in-app advertising.

At the same time, the concentration of usage in a small number of apps means that advertisers will need to pay attention the mobile web, which has more diversity and an ad ecosystem that is more tightly integrated with the broader digital ad ecosystem.

Ultimately, every advertiser is unique and has different goals. For that reason, advertisers should develop KPIs [12] for their mobile ad campaigns no matter where they run, and allocate budget where the returns are strongest.

Related reading

References

  1. ^ advertising (www.clickz.com)
  2. ^ mobile web (www.clickz.com)
  3. ^ 86% of time spent using smartphones (www.emarketer.com)
  4. ^ Instagram’s Carousel Ads (www.clickz.com)
  5. ^ account for upwards of 80% (marketingland.com)
  6. ^ recently unveiled a final version of its Standard Ad Unit Portfolio (www.clickz.com)
  7. ^ majority of programmatic ad buys (www.iabuk.net)
  8. ^ According to PageFair (pagefair.com)
  9. ^ biggest problems (www.clickz.com)
  10. ^ according to one study (venturebeat.com)
  11. ^ brand safety (www.clickz.com)
  12. ^ develop KPIs (www.clickz.com)
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