In-app advertising: Challenges of a promising medium

It is a high-growth space that is still in its nascent stages

e4m by Venkata Susmita Biswas
Updated: Jul 10, 2017 7:46 AM

In-app advertising has been hailed has the new frontier of mobile advertising ever since multiple app icons apps took precedence over the Web on our smartphones; that was about 5-6 years ago. Though the space is growing rapidly, in-app advertising is not without its share of challenges.

There is an app for almost everything these days but very few of these deliver content or entertainment worth placing an ad against. News delivery app, Inshorts is one such app that over time found ways to monetise content shared on the app. Now, Inshorts has become an inspiration for app creators because of the way it leverages in-app advertising that too in an ecosystem where news apps are hardly the most favourite apps.

“Almost 50 per cent of the top 100 apps on the Google Play Store are gaming apps. Gaming apps are popular because they are sticky, snacky content. It is more likely that someone may engage with an ad while playing a game than while checking mail,” said Vaibhav Odhekar, COO and Co-founder of Pokkt. Odhekar says that with nuanced data available on users, targeting ads on apps is far more effective. It is this data that also helps develop a multitude of innovative in-app ads that don’t misfire, feels Odhekar.

Experts feel that even though the options are many, in-app advertising formats are largely unimaginative. “The formats that most of the gaming apps and torch apps use are either banner ads or rewarded video. The mobile space is ripe for innovation but no one is really leveraging it to the fullest-potential,” said Lavin Punjabi, CEO, mCanvas. He felt that mobile advertising still takes a back seat when it comes to creating customised ads for the platform.

One of the key challenges of the app economy is loyalty, according to Piyush Kumar, Founder CEO, Rooter, a mobile sports app. Many users download apps and very quickly also delete them when the app has served its purpose or when the phone runs out of space. “Users download apps based on their utility. If they do not have enough space on their phones, they may end up deleting apps. A big percentage of the population in India is still buying basic smartphones that come with 8-16GB of space, they also come with preloaded apps; an average app takes up 23 MB of space,” noted Kumar. He does hope that in the next couple of years in-app advertising will mature and advertisers will set aside sizeable budgets for the same.

Apps are constantly vying for the user’s attention. The time people spend watching video on their mobile devices overtakes other activities. According to studies by Cisco, in 2016 video made up 49% of the mobile internet consumption in India. By 2021 video is expected to represent 60 per cent of the overall mobile data traffic. Consequently, spends on mobile follow eyeballs.

It is WAT Consult CEO and Founder, Rajiv Dingra’s belief that in-app advertising will mature into a more wholesome advertising platform in five years time. “This is a very nascent space with early stage ad formats, and at the same time, it is a very high growth area,” he said.

Punjabi felt that in the long term it will be ads that create good content that will draw more in-app advertising. “Really sticky game apps that a person uses every day or a reading/news app like Inshorts, DailyHunt that deliver good content will win,” he said.

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