Home | A Guide to In-App Advertising

A Guide to In-App Advertising

Apps are one of the most effective channels for advertisers to capture consumers’ attention. With advanced data and contextual targeting opportunities, in-app advertising can help you reach audiences with pinpoint accuracy.

A Guide to In-App Advertising

In-app advertising is an effective monetization strategy for mobile publishers, in which app developers get paid to serve advertisements within their mobile app. This helps publishers keep their content free for users, boosting downloads while earning easily scalable revenue. Not only do apps drive mobile usage, but also drive global media consumption. This makes in-app advertising a vital marketing channel for both brands and agencies. With sophisticated contextual and iOS 14 compliant targeting the in-app environment also allows advertisers to reach relevant and engaged users.

Preferred by Consumers

Superior Data

More Campaign Control

Mobile Websites vs. Mobile Apps

Mobile websites and mobile apps share many similarities. Both help DSPs, marketers, and advertisers reach engaged audiences on their mobile devices. Mobile adsapps offer an engaging and dynamic environment for advertisers to capture consumers’ attention and encourage them to view and interact with their content. There are some key differences, though.

Here are some of the key differences between mobile websites and mobile apps:

Mobile Websites Mobile Apps
Tracking Method
Device ID
Web activity (e.g. shopping habits, favorite websites, etc.)
Available User Data
GPS location, device type, OS, gender, age, wireless carrier
Vulnerable to in-browser ad blockers
Ad Blocking
Ad blocking technology has not advanced to universally block in-app ads
52 minutes
Average Daily Usage in the US
3 hours 14 minutes

Consumers Spend More Time In-App

Apps are capturing an increasing amount of consumers’ mobile-device attention. While mobile apps continue to gain popularity, there is still a disparity between the amount of time that people are spending in-app and the number of ad dollars allocated to this medium.

Unlike desktop or laptop computers which might be shared, mobile phones are usually only used by one person. This means that the apps on a particular device are closely connected to the personal life and daily habits of the device owner. This also makes the in-app environment an ideal place for advertisers to create effective and personal advertising touchpoints without compromising iOS 14 privacy protections.

Accurate In-App Ad Targeting with First-Party Data

Since apps can collect first-party data on an opt-in basis, they are also able to pass valuable targeting parameters such as gender and age. This makes it easy for advertisers to precisely reach their ideal audience through in-app advertising.

Within the in-app environment, advertisers can also harness geolocation data to ensure that they are reaching users at the right time and in the right place.

Accurate In-App Ad Targeting with First-Party Data

Tracking Opted-In Users In-App

Within the in-app environment, active user identification is tied to the device ID of each unique mobile device. This enables in-app advertising to provide true people-centric targeting, given the personal nature of mobile devices. Furthermore, if users are opt-in, device IDs last for an average of 21 months — about 630 times longer than the average cookie.

For users who do not opt into IDFA tracking, Apple’s SKAdNetwork offers an iOS 14 compliant tracking alternative. SKAdNetwork is a framework developed by Apple to measure the conversion rates of app installs. This framework uncouples the impression event from the actual app installation, removing the need for user identifiers. This allows marketers to measure and attribute campaign success without violating user privacy regulations.

Mobile Web Cookies Mobile Device IDs
  • Tied to browsers
  • Decay within 24 hours
  • Not opt-in
  • Tied to users
  • Last for an average of 21 months
  • Compliant with privacy laws with users opt-in

Private Marketplace and Programmatic Deals

Customized programmatic deals are an effective way to ensure that in-app advertising campaigns reach their target audience at the right mobile moment. Not only do they provide more transparency and control, but also they are effective tools for optimizing campaigns, inventory, and pricing.

Types of Mobile Programmatic Buying
  • Preferred Deals: Direct, pre-auction, fixed-price deal with one buyer.
  • Private Auctions: Invite-only auction with variable floor prices set per buyer. Publishers can hand select which advertisers to invite to participate in the auction.
  • Open Auction (RTB): Second price, real-time auction with all buyers.

Programmatic Deals

Buying inventory through programmatic deals creates a direct relationship between advertisers and publishers. This gives advertisers more transparency, so they can know who will see their ad and in which context. When working directly with supply partners, there are multiple programmatic buying options available. At Smaato, we recommend Preferred Deals, Private Marketplace Deals, and Open Deals:

Preferred Deals Private Marketplace Open Deals
Preferred Deals are private, 1:1 relationships between publishers and marketers. In a Preferred Deal, publishers offer premium inventory to the marketer at a pre-negotiated fixed eCPM price. Preferred deals offer marketers a first look at inventory, but inventory is not guaranteed. These deals use RTB infrastructure and programmatic pipes. Private Marketplace (PMP) is an exclusive RTB auction where selected buyers are invited to bid on specific ad placements. PMP inventory can be built around numerous variables, including audience data, content type, impression attributes, and more. With Open Deals, buyers can purchase a package of inventory across different publishers based on their targeting goals or customize their own package with specific apps and ad spaces. These deals will still be executed at the open auction level, but create predetermined parameters around the exact inventory on which marketers/advertisers bid. Publishers have the option to set floor prices or have no fixed price. Curated marketplace deals are also available.
At Smaato, we also offer in-app header bidding solutions, including our in-app Unified Bidding solution, and Prebid Mobile, to help you maximize fill and eCPMs.

Measuring In-App Ad Viewability

In-app advertising, or any advertising for that matter, can only be effective when it is viewed by real people (and not by bots). In the mobile world, an ad can only be considered viewable if the ad content is within the viewable area of the app or mobile website for a minimum period of time.

To provide an industry standard for measuring viewable mobile ad impressions, the Media Rating Council (MRC) published the “Mobile Viewable Ad Impression Measurement Guidelines.” According to the guidelines, a mobile display ad impression can only be considered viewable if it fulfills the following requirements:

  • Pixel requirement: At least 50% of the advertisement’s pixels (density-independent) must be on an in-focus browser or a fully downloaded, opened, and initialized application in the viewable space of the device.
  • Time requirement: The duration in which the pixel requirement is met must be at least one continuous second, post ad render. This time requirement applies equally to news feed and non-news feed environments.

There are currently several organizations and industry standards that are working to ensure that objective and fair viewability measurement is available in-app:

In-App Advertising Viewability Verification Providers

The IAB Tech Lab is also leading the development of a new technical tool for in-app mobile viewability measurement, the Open Measurement Software Development Kit (OM SDK), which will be the first industry-approved open-source viewability measurement SDK. As a leader in the in-app space since 2005, Smaato is an active participant in the Open Measurement Working Group (OMWG), which is reviewing, testing, and maintaining the SDK. This new viewability measurement standard will be the next step in ensuring a high-quality, transparent advertising ecosystem. Our own SDK, NextGen SDK, comes with open measurement right out of the box, to make it even easier for our partners to measure success.

Mobile Programmatic Supply Chain

Mobile programmatic advertising is an automated process of buying and selling mobile media at scale, making it an important component of any in-app advertising strategy. The mobile programmatic industry is a complex environment that requires trust and transparency between all supply and demand partners. This is especially important for advertisers to maintain control over their creatives as they move through the programmatic supply chain and are ultimately served on a user’s mobile device.

The diversity of programmatic ad technology services has expanded rapidly over the past several years, as the industry responds to evolving marketplace dynamics. These third-party tools provide an unprecedented level of control for both advertisers and publishers. The increasing complexity in the programmatic supply chain, however, has made it difficult for advertisers to keep track of which parties are involved in the delivery of their creative and which fees are taken by these parties along the chain.

The first step in improving transparency is to deconstruct the individual components of these ad-technology layers and their value propositions. Here are the main players in the mobile programmatic advertising industry:

Mobile Programmatic Advertising Supply Chain
  • Agency: An advertising agency is typically an independent organization that handles advertising, promotion, and marketing for multiple clients. In order to conduct large-scale mobile programmatic transactions for their clients, agencies can work with a trading desk or directly with demand-side platforms (DSPs).
  • Trading Desk: Many advertising agencies have a dedicated team for executing online media buying, which is referred to as a trading desk. Trading desks can use either a proprietary technology or a DSP to buy inventory.
  • Demand-Side Platform (DSP): A DSP allows buyers of digital advertising inventory (whether trading desks, agencies, or advertisers directly) to manage multiple ad exchanges via one interface.
  • Ad Exchange: An ad exchange is a technology platform that facilitates the buying and selling of advertising inventory between DSPs and SSPs.
  • Supply-Side Platform (SSP): SSPs connect directly with publishers, enabling them to make their inventory available to multiple ad exchanges, DSPs, and advertisers in order to maximize revenue.

In-App Ad Formats

Apps offer a dynamic environment to seamlessly integrate advertisements with in-app content. This turns mobile ads from an unwelcome distraction to a relevant suggestion that can actually enhance the users’ in-app experience. When choosing the right ad formats for an in-app advertising campaign, advertisers should consider how consumers use their device, and how they will experience the ad.

Video Ad Formats

Mobile video advertising is an integral part of a successful advertising strategy to engage audiences on the small screen. By leveraging the unique qualities of mobile devices, mobile video ad formats can effectively deliver engaging brand messages.

Display Ad Formats

In-app display ads provide advertisers with a flexible way to scale their campaign reach within the in-app environment. These formats provide users with a discovery experience that is tailored to the unique context of the app and the behaviors and interests of the user.

Best Practices for In-App Advertising Success

With ever-increasing usage and superior technical capabilities, it’s clear why advertisers should invest in in-app advertising — now it’s time to look at how to best invest advertising budgets in-app.

Here are some best practices for in-app advertisers, which advertisers can apply to their next in-app advertising campaign to optimize their strategy and maximize campaign performance:

  1. Know Where Your Ads Go

    Familiarize yourself with the mobile programmatic supply chain and understand the role of each participant.

  2. Choose Supply Partners Wisely

    Many premium publishers only work with a small selection of supply-side platforms (SSPs). Working with SSPs that have direct relationships to high-quality inventory is the best way for advertisers to maintain control over their ads and get the best return on investment (ROI).

  3. Select Banners for Reach

    For a low-cost, large-scale in-app advertising campaign, no ad format can beat the classic mobile Banner ad. These versatile ad units maintain their popularity among app publishers due to their ability to easily fit into the in-app environment, without being intrusive to the user experience.

  4. Make an Impact With Interstitial Ads

    Full-screen ads make the largest visual impact on the user, which means that these formats are effective for engaging consumers during natural content breaks within the in-app environment.

  5. Maximize Engagement With Interactive Video Ads

    Interactive video ads are a great way to encourage users to engage with a creative and complete the desired action. VPAID (Video Player-Ad Interface Definition) is a video ad delivery format that allows advertisers to program interactive features directly into ads. It also allows an advertiser’s preferred viewability tracking solution to be implemented, regardless of whether the specific measurement provider is integrated into an app’s SDK.

  6. Gain High-Quality Conversions With Rewarded Video Ads

    Another effective method for gaining informed clicks and high-quality conversions is to use rewarded video ads. Users opt into engaging with the ad in exchange for an in-app reward. As a result, this format has some of the highest viewability rates, and it can even help improve brand sentiment.

  7. Take Advantage of Private Marketplace and Programmatic Deals

    Buying inventory through programmatic deals creates a direct relationship between an advertiser and a publisher, allowing advertisers to know exactly who is seeing their ad and in which context.

  8. Use Top App Categories to Reach Engaged Audiences

    The personal nature of the mobile device makes it ideal for reaching highly specific audiences. Social, News, and Gaming are three of the app categories with the highest mobile user penetration, which make them effective for reaching a diverse base of engaged users.

  9. Reach Users of All Ages in Gaming Apps

    Gaming apps are universally enjoyed across all age groups. Users of all ages turn to game apps to relax or challenge their friends. With nearly 50% of the US population playing mobile games, gaming apps are an effective medium for reaching diverse audiences within the apps they love most.

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