• by Tony Silber , Staff Writer, November 11, 2021

In-app advertising is a hot topic this year, due to the surge in activity and new efforts at privacy protection in the last 24 months. Now, a new study of more than 300 mobile publishers indicates that programmatic advertising in this channel is waning. Video advertising is the most prominent format for in-app advertising.

The survey, produced by the tech-and-app-monetization companies AdColony and Fyber asked app publishers and developers, large and small, 30 questions to better understand the state of the in-app monetization ecosystem.

The survey included gaming apps in the education, puzzle and action genres, as well as non-gaming apps in business, entertainment and education. Most of the respondents were based in the Asia-Pacific region (about 160 respondents), but the most common target market (48%) was North America.

The survey was fielded earlier this year.

It discovered publishers prioritize strong relationships with their monetization partners. Nearly 60% of respondents (59%) prefer direct deals and building relationships with agencies and ad networks, pushing programmatic aside. Still, many continue to work directly with ad networks, despite the convenience of media platforms.

Programmatic ads are a higher priority for gaming apps, with 60% reporting that source is moderately to extremely important. Among the non-gaming app respondents, that number is only 48%.

Video is a preferred advertising monetization choice across the board — among gaming and non-gaming apps. Most contain video ads, and for good reason, the survey findings state. They bring in money. This applies across regions and categories. Non-gaming apps were slightly more likely to use display ads than gaming apps (77% compared to 71%, respectively), but video ads were still more common. Interstitial ads were the preferred video format.

Video ads also far outpaced display as the No. 1 source of revenue among respondents: 50% compared to 28%.

For overall monetization, including non-advertising sources, the respondents were evenly split between in-app advertising and in-app purchases. Some respondents leaned heavily one way or heavily the other, but a large chunk of the middle pursues a balanced monetization strategy.

The jury appears to be out on Apple’s App Tracking Transparency feature, which was introduced earlier this year with the rollout of iOS 14.5. With the feature, developers could track user data within an app, and advertisers could then combine it with similar data from elsewhere to profile a user and target them with ads.

Now, developers and publishers have to give users a choice. Companies that seek to track users have to ask permission, using a standard Apple prompt. But the findings of the survey are inconclusive. “While the industry expected a seismic shift, we’ve yet to see the full impact of Apple’s privacy changes,” the survey states. “Some have reported drops and shifts in spends, but most publishers say it is too early to tell.”

Read or download the full report here.