Mobile App Revenue on the Rise

mobile app usage 2017

According to the latest data from Flurry Analytics, mobile users spend an average of five hours on their phones each day. While individuals dedicate only 14% of this time to browsers and search engines, the remaining 86% is spent within mobile apps.

To reach users on their smartphones, it has become increasingly important to incorporate in-app advertising as part of your digital strategy.

Market research firm Newzoo projects 51% growth in mobile app store revenue over the next few years, from $56.4 billion in 2017 to $85 billion in 2020. Globally, the number of smartphone users will swell from 2.6 billion to 3.6 billion in the same period – ultimately comprising half the world’s current population. The rapid rise of mobile app usage has left marketers scrambling to comprehend nuances and perfect their approach. Here are some things to keep in mind as you launch your in-app advertising campaign.


leverage location extensions

Google Display Network (GDN) recently rolled out location extensions for local businesses. This development responds to users spending increasing amounts of time in mobile apps, as GDN ads are able to serve within apps.

Similar to location extensions seen on the search engine results page, the new GDN feature highlights hours and location information on banner ads, with the option to click through for directions or further details. Google claims that in testing, 60% of clicks on display extensions were for such in-store purposes. Display location extensions widen opportunity for local businesses to drive in-store traffic from digital advertising by adding to the existing extensions in Search and Maps. Furthermore, display ads with location extensions will help capture interest and foot traffic despite the decline in mobile web usage – reducing missed opportunity from search ads.

GDN campaigns with business information are expected to see higher-than-usual click-through rates, as users who may not have interacted with a standard banner ad now have the option—and incentive—to click through for directions and store location details. As with search location extensions, advertisers should consider whether their goal is in-store traffic or online activity for a specific campaign before enabling location extensions on display ads.


Rest (slightly more) assured on brand safety

Brand safety has been a hot topic as of late, and rightly so. In-app advertising provides both an efficient way to reach your audience on mobile as well as a relative haven from content that is not brand safe. Why is that? Not only are developers eager to create a great product that rises above a sea of similar apps on the market, but companies like Apple and Google are also known to strictly control which apps make it to their stores in the first place. In 2010, Apple removed 5,000 apps from its App Store after refining the guidelines under which it operates. Initial app submissions must pass standards in the following categories: Safety, Performance, Business, Design, and Legal. Their iPhone App Review team also evaluates existing apps based on user complaints. When it comes to Google Play—Google’s proprietary app store—a total of eight categories are listed by which developers must maintain product integrity.

Due to these rigorous and multi-level processes, advertisers are ensured an overall better user experience compared to advertising on mobile web. Apple states that “If your app looks like it was cobbled together in a few days, or you’re trying to get your first practice app into the store to impress your friends, please brace yourself for rejection. We have lots of serious developers who don’t want their quality apps to be surrounded by amateur hour.” Regulations such as these benefit campaigns where brand safety is paramount.


Weight quality over quantity

Take note of Apple’s approach and apply a critical lens, even to apps that make it to the store and onto your campaign. According to the Newzoo report, games accounted for 82% of mobile app store revenue in 2017. These stats might persuade an advertiser to trust games in general as a space in which to reach large audiences. Consider, however, that 99% of user engagement occurs in the top 0.1% of mobile apps. Simply turning toward in-app advertising will not guarantee quality traffic, so be sure to monitor where ads are appearing and evaluate whether placements are supporting your strategy.

Despite growth and user favorability, many marketers are hesitant to enter the app world due to a perceived lack of measurability. On the contrary, Fiksu CSO Craig Palli maintains that “the measurement capabilities on mobile are at least as good as the measurement capabilities on desktop.” Each month, 28% of desktop users clear first-party cookies and 37% delete third-party cookies. Those on mobile self-identify repeatedly through app logins and inherent device IDs. Campaign US also claims that mobile advertising tackles viewability issues, as “it’s built specifically for the device where it appears.” In terms of digital frontiers, mobile app advertising presents a potentially low-risk and high-reward way to improve digital campaign performance.

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