Everything You Must Know About In-App Advertising

We live in the era where we can leave home with just our phone and still have everything we need: our watch, our wallet, our email, our games, our appointment schedule, and even our camera. It’s all thanks to the various apps we have installed on our phone to make our life easier and more automated, making smart phones the most important possession we have in our person at any given time.

Phone apps and their functionality increase by the day. From just a few hundred when it was first possible to download applications to your phone in 2008, their number has ballooned to almost two million. A big percentage of those apps are free or have minimal cost to download. Despite that, app creators make revenue thanks to in-app advertising.

In-app advertising is a huge market and opportunity to make your brand known to users that otherwise wouldn’t be effectively reachable as an audience. Read on to find out everything you need to know about in-app advertising and why it’s great for your business, no matter which industry it is in.

What is in-app advertising?

In-app advertising (IAA) is part of mobile advertising. It’s all types of advertising that is done through a user’s phone. Mostly, it involves displaying advertisements within the app that the user has opened. Sometimes these advertisements are displayed in permanent real estate in the app’s interface, or in other cases briefly interrupt the app usage to display the message before the user can return to the app.

Almost all apps have some kind of advertising which pays them and allows them to keep their content and service free or requiring a token amount to grant users access. Many mobile games, utilities, and entertainment apps depend solely on advertising to create revenue.

How in-app advertising works?

To serve in-app ads, two elements are needed: a software development kit (SDK) and an ad network. In essence, in-app advertising is just another function available through AdTech platforms.

The software development kit (SDK) helps app developers integrate the in-app ads in their application by incorporating the AdTech vendor software they will be using. Then, the app is ready to display in-app ads through the ad network where ad campaign transactions take place between the advertiser and the app developer.

These two sides of the transaction, that of the advertiser and the app developer, are called the demand side (that buys the app real estate) and the supply side (that sells the in-app advertising space or opportunities).

How in-app ads are bought and sold?

There are two major ways to buy and sell in-app ads: through an ad network or through real time bidding (RTB). They are both done through AdTech platforms and can be quite automated.

The main difference between simple ad network transactions and RTB is that in the latter, ads compete for the ad space of the app by bidding. The highest bidding ad is the winner and the one that ends up being displayed to the user. This makes the cost of in-app advertising fluctuate according to real-time demand while simple ad network transaction has a more fixed cost for ad display.

Why should you seriously consider in-app advertising?

Out of all mobile advertising, in-app advertising has been shown to generate more engagement and capture user attention more efficiently. Other mobile advertising involves regular mobile internet ads that are identical to general digital ads and advertising found through any device online. But in-app ads are unique in that they are guaranteed to be one-on-one when the user is paying attention to the screen and is actively interacting with it. It is therefore more likely that you will generate leads or engagement from an ad campaign that includes in-app advertising.

What in-app ads look like?

In-app ads come in many unique formats that have high engagement. Here are the main types available:

Playable ads: These ads are interactive, often in the form of mini games. They reward users for their attention and are likely to please them or leave a good impression. Playable ads have high engagement and boast some of the highest conversion rates.

Rewarded video ads: These are regular video ads that reward the user for watching them. Depending on the app, this reward may come in the form of unlocking features, receiving awards, or other game-style tokens that please the user and make them watch the entire video voluntarily.

Interstitial ads: These are messages (often in the form of big splash images) that are displayed at moments where the app interface naturally pauses high activity. For example, they may be displayed after launching, before shutting down, or in intervals between chunks of activity (like after a level completion in a game). Because they cause minimal disruption for the user, they are generally well received.

Offerwalls: These are teaser banners that coax or tempt the user to interact with them. If the user does so, they expand into bigger ads that are interactive. Offerwalls are basically in-app microtransactions and are initiated by the user, which makes them maximize conversion rates.

Video ads, expandable ads, banner ads: These are more traditional versions of advertising, configured to be non-disruptive within the app interface. They are generally able to capture the attention of the user without frustrating them. The best designed apps of this sort contribute to user experience.

In-app advertising is one of the most efficient ways to run a campaign: users are guaranteed to pay attention to the screen, they are required to somehow interact with the ad even if it’s just to close it and are unable to easily multitask as on other devices. It’s no wonder that engagement and conversions are maximized, and a no-brainer solution for your brand.