Almost half (47%)
of U.S. smartphone users ignore in-app ads, and 43% find them disruptive, according to a new Forrester study. Only 28% found these ads to be relevant -- and just a quarter said the ads were inventive
Based on these findings, the report concludes that marketers are not crafting ads carefully enough to suit the smaller smartphone screen and appeal to the task-oriented mindset
of on-the-go consumers. But it also underscores the potential for in-app ads as 40% recall seeing ads for an app, app upgrade or brand and product in an app.
Plus, half of smartphone
owners who use apps and have seen at least one in-app ad have researched and/or made a purchase after seeing an ad. Ads for app upgrades are the most likely to result in a purchase (20%), while those
for products or services saw the lowest conversion rate, at 11%.
In-app ads for new apps or apps related to ones they are using were the most pervasive type of ads -- seen by 47% --
followed up ads for app upgrades (40%), and brands or products (37%). The balance included either none of the above or survey participants couldn’t recall the ad type.
study emphasizes the importance of getting advertising right in apps, given the growing adoption of mobile devices and apps generally. Last year, about two-thirds of all mobile phone users had apps,
up 22% from 2011. And 80% of mobile time takes place in apps rather than the mobile Web, according to comScore.
The app audience represents a broad cross-section of Americans. Mobile ad and
analytics firm Flurry recently reported the app audience reached as many as 52 million during TV prime time. That population, however, is fragmented across different device types and mobile operating
systems. Otherwise, app users reflect the U.S. adult online audience, although skewing slightly younger, more educated, and more affluent.
However, barriers remain when it comes to
monetizing that audience. Marketers face a fractured mobile ad ecosystem, with a confusing array of mobile ad networks, ad exchanges, specialized in-app networks as well as large apps like Facebook,
Pandora and Twitter to make buys from.
This complex landscape is also in flux, with Millennial Media recently acquiring rival mobile ad network Jumptap, and Twitter snapping up mobile ad
exchange MoPub -- not to mention the scores of partnerships among ad networks, demand-side platforms and agencies trying to conquer the mobile space.
Add a lack of ad creative standards and
the longstanding challenges of tracking and measuring in-app ad performance, and it’s not hard to see why mobile advertising has taken longer to take off than many initially anticipated. When it
comes to in-app ad campaigns, the Forrester study authored by Jennifer Wise suggests several steps.
These included targeting specific audiences within apps and optimizing campaigns and
determining how and when to show ads without annoying users. It points to different options, including reward network Kiip’s model of showing offers at “moments of achievement” in
gaming or other apps.
Wise also stresses the importance of providing value through in-app advertising. As an example, she points to Zumobi working with Chevrolet to create an integrated ad
experience in the Motor Trend app including a six-part technology series and ad unit providing more information about the advertised car. In this case, Chevy saw an 11.2% click-through rate and a 37%
engagement rate, according to the Forrester report, which didn’t detail the campaign costs involved or ROI.
The study was based on an online survey conducted in April with 61,167 U.S.
and 5,800 Canadian adults aged 18 to 88.