As of June 2017, there are 3+ million apps in the world off which 90-94% are available for free. Thus, the question is how do these Freemium apps make money? The answer can be found in 3 alphabets – ‘Ads’. By 2020, mobile apps are forecasted to generate about $189 billon in revenue through app stores & in-app advertising.
Moreover, as per the latest Chocolate Marketplace Q4 2017 Global Trends in Programmatic Mobile Video Advertising Report, in-app video ad spend increased 57% whereas it decreased by 34% on mobile web. Marketers today value in-app advertising spaces more than mobile web. It is therefore safe to say that the importance of in-app advertising is not one to negate. The next logical question is which in-app advertising format is best for my app.
Choosing the Right Ad Format
The choice of in-app ad formats is aplenty. Advertisers thou are spending hugely on mobile video ads. Statista pegged mobile video advertising expenditure at $5.87 billion for United States in 2017. Studies also indicate that video ad formats perform substantially better on key metrics like click-through rates & viewability.
Video ads have contributed to a 20-40% increase in app revenues for most app developers. The decision of picking the best video ad format must be based on an analysis of the user behavior & the developer’s goal. The aim should be to gather as much data to understand the interests & demographics of users. This helps in zeroing on the most effective mix of video ad formats, frequency, placements & caching to figure out the best options for your app.
Types of Video Ad Formats
- Rewarded Video Ads: Users opt-in to watch an ad in exchange of rewards like additional game life, unlocking a higher level, cryptocurrency, etc. They are the fastest growing format within video & give 30-40% higher eCPM. Rewarded video ads generate positive user experience & higher engagement rates.
One of Chocolate’s client a leading cards gaming app, witnessed a 10X increase in eCPM with rewarded video ads.
- Playable Ads: Are build around a player, the ad creates an interactive moment such that the ad seems natural & offers an enjoyable experience to user without downloading.
Developers get to create a long-lasting, meaningful interaction & higher LTV with these users opted ads. They lead to ~30% increase in retention & 120% higher conversion for advertisers.
- Full Screen Video Ads: Also known as interstitial ads, they appear at natural transition points of app. These ads efficiently manage user satisfaction levels by delivering viewable/ non-obstructive experience. Which results in higher click-through rates.
A leading sports entertainment app, client of Chocolate Ad Mediation was able to double their revenues by monetizing unsold ad spaces by incorporating this ad format.
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