Why are brands ignoring the in-app opportunity?

That's surprising given that app usage has skyrocketed over the last few years. Global app spending neared $65bn in the first half of 2021, up 24% from the previous year, according to data from benchmarking company Adjust.

In fact, 70% of all US digital media time comes from mobile apps, more than any other channel, site or network. Americans spent nearly 30% more time on their mobile devices than they did watching TV in 2021, a year that saw most people stuck at home. Gaming apps, in particular, are surging in popularity with mobile games now earning more revenue than movie box offices or the music industry.

Where are the advertisers?

But brands are nowhere to be seen. While the pandemic fueled a massive spike in the use of mobile devices and apps there is a growing gap between this consumer engagement and brand investment in mobile.

Gaming accounts for less than 6% of total digital ad spending in the US, according to figures shared by the IAB.

That's despite the fact that the audience for in-app advertising is enormous, global and diverse. Just take casual gaming for instance. Puzzle game Wordscapes boasts nearly five million daily users who are primarily female (70%), mostly millennial and active for about 20 minutes a day. So, not only do these users represent a coveted audience, they’re actively engaging with content, rather than passively consuming it.

And the good news for advertisers is that this massive and broad audience is accustomed to seeing ads and receptive to many formats, particularly playable and rewarded video ads. Offering an in-game reward in exchange for watching an ad to completion has helped to normalize the concept of in-app advertising. These ads have also helped users become more open to the experience, making the opportunity for brand advertisers and agencies that much more powerful.

Ad format innovation

An additional attraction for brands is that the range of formats available through in-app advertising is expanding, and in-app ads can also better circumvent the banner blindness that has become common to more traditional display ads. On top of this, the ads can be more precisely targeted to an audience that is then more likely to engage and interact with the ad.

While the massive inventory of video ads is already attractive, what’s even more exciting is that in-app video delivers high completion rates – and support to fully measure viewability. App users are in a positive “mindset moment”, because they are used to these ads, and there are clear breaks for them within the app experience. Unlike the viewers that watch pre-roll and mid-roll ads, app users are especially amenable to video ads and rewarded video, which offers them a benefit or in-app reward in exchange for watching the full ad.

Boosting brand safety

In-app advertising also has significant strengths in terms of delivering against brand safety for brands. With content for the majority of apps (and games in particular) limited to specific themes, there’s little risk of negative adjacencies especially with full screen static and video formats where your ads get 100% share of screen. Additionally, platforms such as the AppLovin Exchange (ALX) offer specific brand safety tools including data pulled directly from the app store like content and star rating, so advertisers can feel more confident in the apps they target.

There's positive news here too in terms of advertising creativity. Exchanges such as ALX support all major ad formats, including native and rich media, to give brands premium canvases to tell their stories and engage users in relevant and meaningful ways. AppLovin's recent acquisition of the MoPub mobile ad exchange has strengthened this opportunity by further consolidating mobile supply onto one platform that now connects buyers to more than 140,000 mobile apps across over 1.8 billion mobile devices across the world. ALX brings never before seen scale directly to brands and will benefit those who value transparent and efficient access to high performing inventory and audiences.

Engagement at scale

In addition to all of these benefits – broad demographic reach, strong brand safety and a full range of rich advertising formats – in-app advertising also complements traditional display advertising. Used in tandem, display advertising and in-app advertising can provide a powerful, effective, and efficient campaign through building broader brand awareness while reaching potential customers where they spend most of their time – in their apps on mobile devices.

Above all, in-app advertising, and especially in-game advertising in 2022, represents a powerful opportunity for brands to reach and engage their audience at scale and continue to add value to an advertiser's relationship with its audience.

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