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May 29, 2015

In-App Advertising Pros and Cons

Unless you’ve been living under a rock, it’s hard not to notice the recent uptick in mobile usage. More and more people rely on smartphones and tablets to conduct business, navigate the world, or keep a pulse on what’s happening in their lives. This growth isn’t set to stop any time soon.

Research center, Yankee Group, predicts that mobile devices and mobile commerce sectors will grow, “… quicker than previously forecasted.” Now they’re expecting the mobile commerce industry to reach $906 billion by 2017. For advertisers, this poses a tremendous opportunity for in-app advertising. With more consumers digging their noses into apps, businesses have prime real estate to get their message seen by thousands of people. But is this strategy effective? As with any marketing tactic, it has its pros and cons.

The Pros

There are distinct benefits to advertising in mobile applications.

You have a captive audience

. Unlike television, radio, or print advertisements, your audience is engaged with the app, and therefore in tune with your brand. It’s this captive audience that can help you drive better conversions.

You tend to see bigger results.

Many people equate in-app advertising to banner ads on a website. Although there are some similarities, the approach is different. There are statistics to back up this effectivity. AppSavvy recently reported that in-app advertisements perform on average 11.4 times better than banner ads; an increase you wouldn’t shake your fist at.

You have a more targeted audience.

The viewer of your ad chose to download the app. They’re interested in what the app has to offer. When you advertise in relevant apps, you have a targeted audience, making your marketing more effective.

The Cons

With a targeted audience that’s more engaged and drives bigger results, how can there be a downside to this mobile advertising strategy? Turns out, there are a few reasons why this might not work for your business.

Engagement with banner ads is low in app advertising.

Although the audience is a captive one, the amount of clicks are abnormally low. HubSpot noted that you’re more likely to survive a plane crash than you are to click on a banner ad. With an average of a 0.1% clickthrough rate on banners, your ad is probably not going to get a ton of engagement.

Engagement with video ads is shrinking too.

Although video ads have a higher clickthrough rate (AdTapsy noted it was an average of 13.64%) they’re not seeing the type of viewing time they once did. Now, instead of the average consumer’s attention span being 15 seconds, it’s lowering to 8 seconds. That’s causing some advertisers to lose attention and impact faster.

What’s Right for Your Business?

In general, many advertisers have found that mobile advertising is worth the investment. With higher average returns and a more targeted audience, you’re better able to get your brand’s message in front of the right buyers at a time when you have their attention. The best way to decide is to test within your business. Try a few in-app advertising strategies and see what resonates the most with your audience. The answers might surprise you.