Where are most advertisers placing their bets these days — on mobile web browsers or mobile apps? If you looked at spend alone, you would think that in-app advertising is the winner. 2016 in-app spend was triple that of mobile browsing spend — $29.66 billion versus $10.84 billion.
However, roughly 60% of app ad spending will go to either Google or Facebook and 85% to the top five apps which also include Snapchat and Amazon, per eMarketer.
Outside of those app properties, most advertisers are more comfortable with mobile web browsing environments— but that could be a critical oversight and missed opportunity.
In-App: The Pros and Cons
In–app advertising has a lot going for it —engagement is high, there are fewer ads which are more impactful, and targeting is a breeze because apps are tailored to interest such as fitness, meditation, cooking etc. It’s also much harder for bot traffic to penetrate apps which means the audience is most likely all human.
The total number of app downloads in 2017 was 197 billion and that’s expected to grow to 353 billion by 2021, according to Statista. In the U.S., users spend 87% of their total mobile minutes in-app (comScore) and spend an average of two hours and nine minutes daily on apps, compared to only 16 minutes on mobile web (IAB).
Of course, Facebook and Instagram likely account for a lot of this app engagement, but people also spend a great deal of time in other apps such as games. U.S. consumers spend most of their app time conducting five activities: listening to digital audio, social networking, gaming, video viewing and messaging (eMarketer). Ever notice on the New York City subway when there is spotty coverage and people can’t get onto social media? A majority of them are gaming.
So why aren’t more brands flocking to in-app advertising? Advertisers need to show cross-device attribution, yet attribution and tracking are very difficult in app because there are no cookies. A user who toggles between apps that operate independently of each other — and don’t share data — will be very difficult to track.
Viewability is also a roadblock to greater in-app ad adoption. Measurement vendors find it difficult to integrate with apps, so brands often receive misleading or erroneous viewability reports. Finally, in-app ads often have network and platform-specific formats, which can be a headache and expensive to customize.
Mobile Web Browsing and Cookies
Mobile web browsing has become the default for most advertisers largely because it’s universal and the audience is bigger. Advertisers can also leverage mobile cookies for tracking and attribution purposes, and they can rely on standard ad formats.
Cookies will start to become less useful if there are more limitations around what advertisers can do with them, and this may be the impetus for advertisers to reconsider their activity in apps.
What we need is the ability to track performance across apps as easily as we can across mobile web. The shift in focus to in-app, away from mobile cookies, has already happened in the industry, so the technology for tracking needs to catch up. Advertisers will continue to miss out on reaching engaged customers until the industry comes together and addresses this technological challenge.