Reimagining App Ads


App install ads is a fast growing business and one of the primary channels mobile developers rely on to acquire users. While new ad formats have been developed in recent years, the general flow of an app ad has been the same since the AdMob days. It’s essentially, 1) show users a creative in the form of an image and 2) take users to the app store and hope they install the app.

But ad networks know that most users sent to the app store do not convert. In fact, only around 3-5 percent of clicks turn into installs. Why?

From the user’s perspective, the installation process itself isn’t exactly fun. It takes over six steps and sometimes minutes of waiting before the app is installed. For that reason, most cancel out of the process and find their way back to the publisher’s app.

Marketers are also limited in what they show the user before they install the app. In most cases, creative means a static image that can be displayed as a banner or interstitial unit. This is the reason most marketers have focused heavily on tweaking their ad creative/ad unit to maximize clickthroughs. Sometimes however, this produces misleading ads like ones that say “Free Today” and “Play Now” when the app is always free, and the next step is really “install now.”

Blind Installs
Today’s approach of “send users to the store and hope for the best” results in a poor user experience. By sending users to the app store without context, we are forcing them to make a decision to install based on a screen shot. Clearly, the low install rate tells us that this is a commitment users aren’t ready to make. For the few that choose to install, they often have to wait minutes for the download to complete.

Blind installs also do not benefit the advertiser. A study by analytics firm Localytics shows that 20 percent of users open an installed app only once. The study includes installs acquired through all channels (including organic) across both paid and free apps. If we were to look at only installs of free apps from app ads, I suspect an even higher percentage of users would open the app only once. This makes sense because prior to install, users were shown only screenshots of the app. They don’t know if they will like the actual experience. After being able to use the app for the first time, some percentage of users will undoubtedly decide that the app is not for them. For the advertiser, they would have paid the same amount for those users that never return.

Time to Evolve: The App Is The Ad
There is a better way to show off an app to the end user. Why not let users try the app before asking them to install? After all, this is ideal experience for the consumer. It’s no different from flipping through a book or test-driving a car before making the purchase decision.

Until recently, app previews were not possible on mobile. Due to the way native apps are designed, the entire binary has to be downloaded onto the device before it could run. For security reasons, distribution of native is tightly controlled by the OS and require explicit user consent every step of the way.

Today, with app virtualization technology, it is now possible to run mobile apps on the cloud and stream it to the end user. This effectively allows users to use the app without having to install it.

Playable Ads vs. Static Creative
With playable ads, the creative process has evolved from picking the right messaging to choosing a part of your app that new users would find engaging.

Playable ads eliminate static creatives and puts an app front and center. This benefits the user, since it gives them an instant preview of the app experience, without having to jump through hoops with installation. It’s also beneficial for the advertiser: the users that do install will be more interested and engaged. Users that didn’t like the app experience would not have followed through with the install. And, because it’s lower friction for users to engage, playable ads also produce much higher eCPMs versus a static creative.

Beyond App Install
It’s easy to see why playable ads make sense for games and entertainment apps. However, the biggest potential for app streaming is outside of game market, crossing over into e-commerce, travel, and other brands. Today, every experience is hidden behind an install. When acquiring new users, brands are left between sending people to the app store, or opening up the mobile web, which is typically an inferior experience compared to native. For many brands, acquiring app installs does not necessarily produce a positive ROI. For example, if Expedia acquired app users for an average of $3 per user. How many of those people will keep the app installed and remember to look for it when they need to book for a flight?

What if we skipped the app install and took the user directly into the experience? To use the Expedia example again: a user is now able to perform a flight search directly from the ad unit. They could even complete the entire booking process; all without having to go through the download process. This would be a much more efficient funnel and lowers user acquisition costs for the brand.

App install ads have traditionally been a cumbersome decision before experience process. With the availability of app streaming technology, it’s now possible to deliver the app itself as the ad, letting users engage with the experience before decision.

David Zhao, the author of this post, is the CEO of Voxel