Developers oftentimes use in-app advertising as a strategy to monetize their free app. In this article, we will explain how in-app advertising works and which ad formats are the most common to implement into an app.
How Does In-App Advertising Work?
With in-app advertising, app owners have the opportunity to sell advertising spaces to advertisers and publishers to make a profit with their app. The real-time-bidding market mainly controls and determines the whole process. In other words, every time the app is loading, the highest bidder of a real-time auction can place his/her ad within the sold advertising space of the app. You can provide your own advertising spaces for advertisers through ad networks or ad exchanges.
The biggest advantage of in-app advertising is the direct interaction of the user with the app as the ad is displayed. This is why most people will react to the ad as opposed to traditional display advertising where it might even be overseen. Nonetheless, there are reasons to be careful: you have to balance the amount of advertising and content! If the user feels suffocated by ads, he might react annoyed and abandon the app.
Since most mobile users spend their time within mobile apps, the in-app advertisements will most likely reach great audiences. A good example for effective in-app advertising is Facebook: as of April 2015, the company made over 70% of their advertising revenue through mobile devices. If done right, it will definitely pay off!
The Different Ad Formats for In App Advertising
In the following, we will take a closer look at the most common and established ad formats for in-app advertising.
A banner ad is a rectangular ad that either includes images or text. It is placed on the side edges of a mobile display and stays on screen while the user interacts with the app or website. If the user clicks on the banner, it takes him/her directly to the App Store or another corresponding landing page.
The banner ad is a largely accepted format, hence advertisers can place their ads in most apps or websites. In turn, publishers are able to display the ads of most advertisers.
Rich Media Ads
The purpose of rich media ads is to encourage users to higher interaction and engagement with the ad by combining different features like video or audio. Additionally, users can activate certain effects where the ad expands, floats etc.
All in all, rich media ads are much more complex than traditional formats like banners. With the help of HTML5 technology, advertisers can layer multiple types of content. Like that, they can include videos, games, tweets and many more in one single ad.
A native advertisement matches its environment in an application or on a website visually and behaves consistently with the native user experience. Well-known examples for platforms that use this type of advertising are social networks like Facebook, Twitter, Instagram and Tumblr.
The main goal of native ads is to address the target audience to an enjoyable extent without being obtrusive.
Interstitial ads are full screen ads that cover the interface of an app. They typically appear at natural transition points without interrupting the user flow. These points could be between different activities or after the completion of a level.
Usually, the user has the choice to either tap the ad or close it and return to the app.
Video ads can either be displayed pre-, mid- or post-roll, for example on YouTube. In apps, they can appear at natural transition points or breaks similar to interstitial ads.
A special form of video ads is the rewarded video. It is specifically designed for in-app environments and offers users a reward in return for viewing a short video.
Which Is the Best Ad Format?
Many forms of in-app advertising, like reward-based or opt-in videos, go way beyond traditional banners and desktop display formats. Since they are more engaging, adapted to current consumption habits and uniquely positioned to combat ad fraud, they are highly effective.
However, the right format is different from advertiser to advertiser and depends on the purpose of their marketing campaign. For instance, advertisers who want to bring attention to their product will choose larger formats like interstitials that cover and require more space. Therefore, it is important to offer a wide range of spaces for different in-app advertising formats.