App-timizing revenue: 57% of users download apps recommended by in-app ad

The mobile application industry is witnessing a significant surge in in-app advertising demand, as per a recent survey. The increase has been linked to the rising usage of mobile apps and the shift in consumer shopping behaviour following the COVID-19 pandemic. In-app advertising has now emerged as a crucial revenue stream for app creators and marketers who aim to promote their products and services to their target audience.

The value of in-app ads

App marketers are leveraging the power of AI and machine learning to identify relevant users and create targeted in-app ad campaigns that yield better results, according to research by GoodFirms, a B2B ratings and reviews platform.

The study emphasizes that such insights and contextual targeting mechanisms could be invaluable to marketers as they strive to reach their desired audience more precisely through in-app advertising.

The study delves into the three most popular app monetization models, namely in-app purchases, subscription models, and in-app advertising, highlighting how the latter is increasingly becoming a preferred revenue-generating option for app creators.

The research also sheds light on the different types of in-app ad formats that users commonly encounter. For instance, skippable in-stream video ads are seen by around 85.2% of users, while 52.4% of users come across non-skippable in-stream video ads. 

In-app ad types most frequently encountered

Source: GoodFirms

Banner ads are found to be the most prevalent form of in-app advertising, with 86.7% of users encountering them. Additionally, 39.1% of users are primarily exposed to interstitial ads, and 23.9% of users come across native ads. 

These findings highlight the diverse nature of in-app advertising formats and their varying degrees of effectiveness in reaching out to the target audience.

Over half of users find in-app ads useful

In-app ads offer multiple benefits such as improved targeting, higher click-through rates, better user engagement, and revenue growth.

56.5% of app users download apps that are recommended through in-app ads. Additionally, 42.6% of smartphone users have made purchases after clicking on in-app ads, and 29.5% of users prefer watching rewarded in-app videos.

Over half (52.8%) of app users find in-app advertisements useful, while 56.7% of mobile app users consider in-app ads informative.

Usefulness of in-app ads

Source: GoodFirms

However, the report also indicates that 46.3% of respondents find in-app advertising unwanted, and 36.7% believe that in-app ads are annoying and often irrelevant. Interestingly, around 53.9% of app users watch ads because they prefer not to pay for the ad-free version.

66% of users will skip video ads

Source: GoodFirms

Some of the top trends in in-app advertising include an increased focus on personalization, prioritizing privacy concerns, a rise in the use of native ads, the incorporation of augmented and virtual reality, the implementation of Artificial Intelligence, fast in-app adverts, a shift from Google Play Store to Apple Store, in-app bidding, and an overall increase in in-app spending. By keeping up with these trends, publishers and marketers can stay ahead of the curve and effectively target their audience.

However, the report also identifies some significant challenges for publishers and marketers. They include viewability and fraud concerns, the growing use of ad blockers, the need to deliver the marketing message within a limited time, data privacy issues, and increasing competition. 

By addressing these challenges, publishers and marketers can optimize their in-app advertising strategies and improve their chances of success in this highly competitive market.

Key takeaways

  • 56.5% of app users download recommended apps and 42.6% make purchases after clicking on in-app ads
  • Over half of app users find in-app ads useful, but 46.3% find them unwanted and 36.7% believe they are annoying
  • Top trends in in-app advertising include personalization, privacy concerns, native ads, AR/VR, AI, and a shift from Google Play Store to Apple Store

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