Why Ads in Mobile Apps Have a Promising Future

Dean Donaldson A few weeks ago, while waiting for my next flight at the Copenhagen airport, I started giggling insanely by myself as I was staring at an app on my iPhone. When I looked up from my screen, I noticed some curious faces staring back at me. "Facebook!" I explained and the friendly smiles in return assured me that I was among fellow peers. Sound familiar? As social media continues to infiltrate our daily lives, many more advertisers are beginning to understand the merits of advertising within these channels. Yet the irony is that the majority of my updates from my Twitter stream and Facebook wall feed are through mobile devices, like my smartphone. The social media ads that we discuss that are both PC and browser based are not truly representative of today's audience. Advertisers are missing out on a greater opportunity to achieve better engagements with today's consumers. Microsoft estimates that 35% of our time spent online involves some sort of communication. Yet interestingly, right from day one when I had my very first 14.4 modem, I was installing "apps" to connect with friends: from CompuServe, AOL and ICQ -- to Live Messenger, Outlook and beyond. The majority of social interaction that I've had in the past 15 years has not been based in a web browser, but instead with an app on my desktop. Initially, it was through my PC followed by my laptop and now more with my mobile device. The methods may have changed, but the behavior has not. According to recent MediaMind research, desktop ads such as those in instant messenger apps far outperform browser-based ads across all metrics, from the number of people engaging to time spent interacting to the resulting CTR. All metrics are at least double in favor of app-based ads. This is especially true in rich media ads where size may matter in browser-based ads, but when it comes to desktop-based ads, it's all about location, location and location! Think about it! If a consumer is spending a greater amount of quality time within a certain environment, potentially with a more concentrated focus, it naturally shows in favor towards the ad engagement. A communicative environment can naturally lead to users wanting to share what they are looking at with their friends, i.e., "tear-and-share." If you are in doubt, look how many ads appear on your Facebook wall feed. Advertising is the new virtual graffiti! It's an exciting insight into how today's users value brand message targeting and shows their likelihood to respond to more to ads in apps across all devices. There are now a plethora of new desktop-based apps offering integration for social media, such as Tweetdeck for Twitter, FaceTop for Facebook or LinkedIn connector for Outlook. Even something like YouTube access is becoming split between a laptop browser and phone/tablet app, and increasingly more so via TV or gaming consoles. Yet despite the entire buzz around fan pages and "likes" in ads that are driving advertisers to take social media marketing seriously, there hasn't been a big discussion around consumer usage vs advertising to date. Nor has there been a shift in favor of mobile advertising across the same social media networks. It's hard to believe, considering that 50% of Facebook, 80% of Twitter and 100% of Foursquare is mobile based. It's probably safe to say that social media now equals mobile, and vice versa. The two are intrinsically woven together. We are already seeing more mobile-based strategies created for social-media apps that focus on highly targeted ads that correspond with a consumer's activity. Following the likes of Foursquare and ShopKick, Facebook launched Places and Deals to offer targeted ads against consumer loyalty, even offering coupons. AT&T has also jumped on board with their new ShopAlerts program to reward their customers by notifying anyone with special deals and offers if they happen to be near an AT&T store. It's an important two-way value proposition for both consumer and advertiser alike. The only kicker is that these are all a DR message and requires clicks, as opposed to an engaging brand interaction that we have benefited from online or forthcoming NFC capabilities of next-generation mobiles. Even media publications have begun offering beautiful interactive ads within iPad magazines, something where offline ads account for 60% of those pages and where we pay daily or monthly to obtain. The shift and demand for digital magazines shows a huge potential for targeted, timely and creative brand executions that are housed within apps. If current trends are any indication of browser vs limited app-based on a desktop, there may well be something very important not only for publishers, but also for the software industry and the mobile industry at large. That is app-based ads may well outshine their browser-based counterparts in both the amount of advertising that can be delivered, and the value to the end consumer, shown by the depth of engagement metrics. Maybe in time we will see consumers opting for a full version of Adobe Photoshop or Microsoft Office for the home that is ad-funded with relevant targeted messages as opposed to the existing reduced feature approach. When we consider the possibilities of digital ads in apps vs browsers we may just witness an unparalleled explosion of new marketing techniques and measurements for advertisers and their agencies on a scale that may dwarf online to date. I guess only time will tell, but what an exciting proposition that lays before us all!

Why Ads in Mobile Apps Have a Promising Future

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