Tuesday, 8 November 2016

Why In-App Advertisers Can Still Thrive After the App Install Plateau

This year’s plateau in downloads has caused panic among in-app advertisers, who have begun to worry about the app’s premature demise and what that means for revenue. But, according to Todd Miller, global marketing solutions, Cheetah Ad Platform, the app market has simply reached a saturation point, and advertisers must turn their attention to something more important: poor retention and engagement rates.
Is 2016 the year the app died? 
A new report shows that, 24 hours after the app download, only 21% of users remain active and, 90 days later, this drops to 1.7%. Dubbed the ‘app drop off’, this problem includes ‘dormant’ users who keep the app downloaded, but don’t use it.
Advertisers need to make sure that the apps already nestled on users’ smartphones are delighting and engaging them. And that starts with better in-app advertising.
The reason behind poor retention
Instead of pushing new apps into the market, and expecting users to adopt them all, it’s time to look at the quality of existing apps and explore new ways of monetising them. Necessity is the mother of invention, and in-app ad blockers wouldn’t exist if users weren’t getting turned off.
Smartphones are highly personal devices; and a poor user experience feels more offensive on mobile than desktop. Hence why intrusive in-app ads drive some users to uninstall apps just days after download. So, as app downloads level out, it’s time for in-app advertisers to refine and perfect the monetisation of those already on the market. Chances are, users will stick around for longer, meaning developers and advertisers alike can enjoy a healthy app economy.
Solutions designed without brands in mind
Unfortunately, advertisers are buying into last-ditch attempts to engage consumers, like paying them to watch their video ads. Entrepreneurs are jumping on the idea: Raffler, for instance, gives users the chance to win £1,000 if they complete two branded videos, while App Crawler offers credits redeemable for cash or gift cards for a similar end.
These solutions are fantastic for the companies who offer them, because brands are unloading their budgets in the hope that users will engage with their videos if they’re paid to do so. But this circumvents, rather than addresses, the challenges of mobile advertising. More importantly, it’s unlikely users will pay attention to the brand’s message — if they are only in it for the money, they’ll put down their phones as soon as the ad begins.
A cash handout isn’t the answer. Advertisers must try to understand how to convey their message in a way that enhances, rather than interrupts, their audience’s app experience.
Tried & tested recipes for success
Earning engagement is far more effective than buying it; and luckily there are ways to do so that have a proven track record. Here are three strategies which every mobile marketer should consider their centrepieces:
1. Native
Todd Miller, Global Marketing Solutions, Cheetah Ad Platform
The hype around native advertising is justified. It ensures ads fit perfectly into the context of the app without disrupting the user experience. A shining example is Football Manager Classic, where ads are placed on hoardings around the perimeter of the pitch like in a real football game. There is no disruption, because the ads are placed where users naturally expect them to be.
Research from Facebook finds that engagement rates are 20% to 60% higher on native ads compared to banners. Small wonder that in-app native ads in Europe are expected to see revenues of USD$4.7bn (£3.83bn) in 2016, accounting for nearly 90% of all in-app advertising.
2. Video
Fifty-three percent of all online video views in Europe happen on mobile, meaning it has overtaken desktop to become the place where consumers go for rich media experiences. This, in turn, produces greater levels of engagement for the brand; and that’s why video ad networks show a 130% higher retention rate than other networks.
Users should also have the option to skip video ads. They must retain the choice of whether or not to engage. According to Adobe research, over half of British consumers stop watching ads entirely when they don’t have the option to skip them.
3. Tiny data
Every in-app advertiser must build their strategies around tiny data (data collected in-app) about how each individual user behaves within the app) in order to target with accuracy. If content is highly relevant, and shaped around fresh first-person data, then it’s far more likely to spark long-term love between user and brand.
For example, if someone heavily used an estate agent app, then suddenly stopped, it’s likely that they are no longer in the market for a home. So, continuing to target them with irrelevant ads about houses in their neighbourhood simply won’t lead anywhere.
Despite some considerable challenges for in-app advertisers, there are simple ways to make sure more users stick around. Stopping the app drop-off paves the way for a flourishing app economy where developers see both consistent downloads and post-download activity. As a result, consumers can enjoy free content in exchange for engaging with non-disruptive ads; and in-app advertisers see success in the form of greater return on investment and a better understanding of their audiences.