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Forrester On In-App Ads: Do It Right Or Go Home

Forrester On In-App Ads: Do It Right Or Go Home

Tablets and smartphones are becoming the de facto devices for going online.

Last year, per Forrester Research (citing the North American Technographics Consumer Deep Dive), three-quarters of U.S. online adult smartphone owners went online on their devices daily. Over half entered the web several times daily.

About two-thirds of all mobile phone owners had apps. The Boston-based consultancy cites data from Flurry that the mobile app audience has reached as high as 52 million at 8 p.m., rivaling the viewership of the top three TV networks during prime time.

More from “Exploring The In-App Advertising Opportunity” by Forrester analyst Jennifer Wise: Millennials index highest for app use, with 32% of mobile device users in that cohort using the programs. The percentages decrease with age.

Paradoxically perhaps, the less wealthy a consumer is the more likely they are to use apps.

Marketers are boosting mobile investment, including budgets for in-app advertising, and it is expected to reach $7 billion by 2015, Wise reports.

So how is it working for them? Not too well: 43% of U.S. smartphone app users who have seen at least one in-app ad think that they disrupt the user experience, and only around one in four finds them creative or relevant. Forty-seven percent say they just ignore ads in apps, and only 28% say the ads are relevant, per the report.

Worse news for marketers pitching physical products: App ads that people remember most are app ads. Forty-seven percent of users, when asked, say the app-served ads they most remember are ads for apps, including the one they happen to be perusing at the moment! Forty percent say they remember ads for an upgrade to the app they are using; 37% recall seeing ads for any brand, product, or service.

More on the pretzel logic of app ads for apps: The ads that most often convince consumers to research and/or make a purchase are ones for an enhancement or upgrade to the app they are using to view the ad for the app they are using.

But the opportunity to advertise isn’t going anywhere, apparently — as, per Wise, only 25% of smartphone owners and 21% of tablet owners said they would rather pay for apps than see ads. She argues that marketers need to get their strategies together if they want to boost relevancy and avoid the Great Digital Turnoff: creating disruptive, interruptive advertising.

They can do that with third-party assistance: Tapjoy can help with its incentive-based model for brand interaction; Appssavvy technology triggers ads in the temporal nooks and crannies in an app where not much is happening. Kiip rewards users during “moments of achievements.”

Needless to say, the key is value add. Wise writes, “Soon, all mobile marketing will become focused on utility — and that includes in-app advertising.” Her example: Chevrolet’s use of Zumobi for a content-based ad experience within the “Motor Trend” app took users to a six-part technology series, an in-app ad unit that provides information about the car that got an 11.2% click-through rate and 37% engagement with the series.

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