By Tanya Lee, GM EMEA at Vungle
There are an astounding 4.8 billion global internet users today, and 92% of them are accessing the internet via their mobile devices, per Hootsuite’s Digital 2021 report. People are dedicating an unprecedented amount of time and attention to the many apps that entertain, connect, inform and assist them in their daily lives. This trend certainly hasn’t gone unnoticed by advertisers, with mobile ad spend increasing 26% YoY to reach $240 billion (£176 billion), according to App Annie’s State of Mobile 2021. Indeed, gaming and non-gaming brands alike are recognising the opportunity that in-app mobile advertising presents.
But as more and more advertising budgets funnel into the mobile ecosystem, the battle for qualified audiences is intensifying, and with it, the value of capturing users’ attention continues to grow higher. As a result, knowing how to implement in-app ad placements effectively can be one of the most important choices an app developer makes, whether that’s brand, gaming, or lifestyle app ad inventory. Developers need to carefully evaluate how to balance earning potential with user experience. While the proper combination can unlock a highly profitable revenue stream, the wrong one could accelerate user attrition or even cannibalise existing revenue.
Importance of ad placement
With access to a larger and broader mobile app audience than ever before, app developers of all kinds now have the opportunity to earn more revenue by serving ads at a higher effective cost per mille (eCPM). The cost per mile represents the cost for advertisers of serving 1,000 ad impressions. The eCPM often varies depending on the ad placement, ad format, or country. Using the same metrics as from the advertisers’ perspective, developers can use the eCPM to measure their ad monetisation performance. Developers need to understand not only which types of ads to implement but how best to implement them.
Rewarded ads offer a huge revenue opportunity for non-gaming apps
When it comes to the revenue impact of different types of ad placements, among all of the mobile game placements, the highest eCPMs come from rewarded ads, according to Vungle’s 2021 In-App Ad Placement Revenue Report. Rewarded ads offer the user in-app extras like game lives, virtual currency or upgrades, in exchange for things like watching a video ad, trying out a demo, or answering a brand survey. Because users gain something of value that enhances their app experience, they are more inclined not only to sit through an ad, but to engage with it.
Even for non-gaming apps, rewarded ads – which are relatively rare in that sphere – also generated the highest eCPMs, generating nearly two times higher eCPMs than non-rewarded full-screen ads and more than three times the eCPMs of the top display ad placement, such as medium rectangle ads. The lack of rewarded ads in the non-gaming arena is understandable, given that most of these apps are not set up for it. However, this paucity offers brands and non-gaming apps an untapped opportunity.
Non-gaming apps – from dating and entertainment to fitness and productivity – should consider experimenting with rewarded ad placements that can be used to promote engagement with the app. Examples include access to premium content on a news app, unlimited song skips when listening to a playlist, or even unlocking extra features on a dating app, such as allowing users to use more filters when they are searching.
No matter the type of app, a successful mobile advertising strategy needs to consider how to implement the best types of ad formats in the most effective ways. Recent research has shown that rewarded ads should be a top priority for any app developer, and particularly so for one looking to make their first push into ad monetisation. The non-gaming app audience is ready for rewarded ads, and the brands and apps that can deliver mobile ad experiences that give users what they really want are the ones that will captivate users and make the most impact.