Are App Install Ads Holding the Mobile Market Back?

Facebook mobile app install ads

There’s a truth about the mobile ad market that’s rarely discussed. Mobile has been the fastest growing segment of the advertising industry, but the statistics can be misleading. Most of the money in mobile advertising today comes from apps and games advertising themselves in other apps and games, not from big brands running ads. Recently though, growth has been slowing as many big game publishers have become unwilling to run ads for competitors’ products.

What we’re seeing parallels the growth of the desktop Internet advertising industry – widespread user adoption, initial experimentation by advertisers, and trepidation from major brands to shift from established channels. Brands have started to move spending from traditional media and even from desktop web to mobile; catching up to the rate at which consumers are shifting their time to mobile. Mobile publishers still have a great opportunity to capture brand dollars.

Two things matter to brand advertisers: scale and context. Brands need to reach large audiences in a cost-effective way, and they want to do it in premium environments. The numbers already prove that advertisers can’t ignore mobile for scale: an Adreaction study from Millward Brown conducted earlier this year showed that time spent on phones already eclipses television.

Until recently, most mobile ad spend has been on app-install ads and other transactional customer acquisition tactics. But mobile screens also capture attention, and brand advertisers can use that attention to their advantage. Mobile is a great home for shorter video ads telling a continuous story, or longer-form branded content. Consumers and developers have moved mobile-first, and digital creatives need to start thinking that way now also.

In order to go after brand revenue, mobile developers need to consider the kind of units that brands like. Successful brand advertising relies on the ability to tell stories and capture attention. Video and high-impact static units are going to drive the best results for brands, and mobile developers can better monetize their apps by finding ways to incorporate those types of units.

The good news is that brands are willing to spend more per ad view than game and app advertisers, so payouts are higher to developers. Also, brand-focused ad networks are on the rise; app publishers don’t have to try to work directly with brands in order to run their ads in apps and games.

The mobile ad market is still young enough to avoid some of the mistakes made on the web. Web publishers learned the hard way that brands want high-impact, dynamic ad units designed for storytelling. Brand revenue can help the market mature if developers keep advertisers’ objectives in mind while they build their products.

Small developers focused on the easy availability of display and app-install ad revenue will miss the larger, longer-term opportunities from brands. And the brand dollars are there – compared to past technologies, brands have been open to experimentation when it comes to mobile. Developers can help accelerate their own growth by creating the right premium environments for advertisers.

Dan Laughlin, the author of this post, is vice president of business development at HyprMX