In-App Ads: The Stakes Keep Rising For Facebook

app-adIn-app ad supply keeps growing as people spend more time with their devices. Last year 80% of time spent on a smartphones and tablets took place in apps, versus a mobile website, according to comScore.

Of course mobile developers remain a prime source of demand in the in-app ad space. There are more than 1.5 million apps on Apple’s iPhone and Android phones, and at least some of them have a paid media budget.

Facebook, with its burgeoning mobile audience, is capturing as much of that spend as it can. About 8,400 app developers used Facebook’s Mobile App Install Ads in the second quarter this year, up from 3,800 in Q1, said Facebook product manager Sriram Krishnan during a presentation today.

Facebook reportedly has more than 1 million advertisers using its platform, so mobile app developers represent only a small portion. But Facebook is eager to grow their number.

“We want to help mobile app developers across the entire app life cycle,” Krishnan said. Getting users to stay engaged with an app is one of the prime challenges developers face. In its latest efforts to support app developers, Facebook has added seven new call-to-action choices for mobile app ads. Developers can now choose from general commands like “Open Link” or “Use App” as well as more specific actions like “Watch Video,” “Shop Now,” or “Book Now.”

Ad buyers can deliver placements to current app users, and when a user clicks, direct her to a specific section of their app or web site.

But marketers need more than a customized call to action to please consumers. According to a recent Forrester Research report, many consumers find in-app ads disruptive and irrelevant. In a survey of approximately 1,470 US smartphone app users, 47% of respondents said they ignore in-app ads while 43% indicated in-app ads disrupt the experience and only about one in four finds the ads creative or relevant.

“Users may see your ad, but it may be because they have no choice,” wrote Forrester Research analyst Jennifer Wise in the report. “The smaller screen of the smartphone and the task-oriented mindset of on-the-go customers make it very important for marketers to craft ads carefully to ensure they’re contextually relevant and offering value.”

The price for attracting new app users and keeping them as loyal users is also rising.

According to a report from app-marketing platform Fiksu, the cost of acquiring a loyal app user reached a new high of $1.90 in August. That price was up from $1.80 in July and $1.50 in June.

Fiksu attributed the growing cost to two main factors: big brands are increasing their mobile ad budgets as they get more aggressive in pursuing mobile app users, and marketers are getting an earlier start on their holiday planning. “Many are applying their Q3 budgets to test different mobile marketing strategies before the big rush in Q4 when costs will likely rise further, as seen in previous years,” according to a Fiksu blog post about the results.

 

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