Consumer Distrust in Mobile Advertising
Mobile advertising, and specifically, in-app advertising is huge. In the US alone as of 2017, in-app advertising became a $33 billion industry. US in-app advertising is projected to grow to $72 billion by 2021. Spending on in-app advertising isn’t stopping anytime soon, as advertisers are responding to the increased time spent on mobile, particularly within mobile apps.
A fundamental issue continues as a major sticking point for advertisers, even as they rightly allocate more ad spend towards mobile and in-app. Users distrust mobile ads more than any other ad vertical. Mobile ads are seen as disruptive, not compelling and overly intrusive. Consumers are becoming increasingly disinterested in mobile ads, as 83% of consumers view it as a disruptive experience, according to a 2017 Digiday Consumer Advertising study. Mobile ads rank among the lowest when consumers are asked which type of ads they trust when making purchase decisions. Only 39% trust mobile ads, compared to much higher figures for more traditional media channels (82% for print ads, 71% for radio ads, 61% for search engine ads).
Ad blocking provides another exemplary case of distrust. In a study conducted by Choozle in May of 2017, 53% of US consumers actively use some form of digital ad blocking service. All parties involved in the advertising space are aware of this.
In the broader context, we as members of the advertising industry are clearly not doing a good job. With 70% of consumers feeling ads are more intrusive today compared to just three years ago (Kantar Millward Brown AdReaction Global Report, 2018), we have to ask ourselves, “What are we doing wrong?” Meanwhile, only 1% of millennials claim a compelling ad influences their purchase decisions. With so much investment in mobile and in-app advertising, the industry needs to provide experiences that add value to the consumer. Otherwise, much of the ad spend is just a waste.
Mobile and in-app ads are, by definition, a disruption. So from the advertising perspective, it better be a good disruption. In a 2017 Rakuten Marketing report, 70% of consumers viewed advertising that aligned with their interests positively. When done right, mobile advertising can be a major asset in the customer journey, but when done wrong, it can seriously tarnish ad effectiveness.
The latest 2018 Mary Meeker internet trends report highlights that marketers are increasingly emphasizing ad allocation/spend through the lens of customer lifetime value and customer experience, rather than other metrics like brand lift, last-click attribution and reach. 27% of marketers cite customer lifetime value as the most important metric when considering ad spend strategies, with 19% citing impressions, 18% citing brand lift and 13% citing last-click attribution. This is a positive change. With customer journeys becoming far more complex and non-linear, customer experience (in other words, what value these ads bring to consumers) must be front of mind. On top of this, with so much ad content competing for consumer attention, brands must determine unique approaches that make their brand interactions stand out.
For us at Jukko, this is what we know:
- The mobile advertising industry is huge and growing
- Consumers distrust mobile advertising, especially when compared to other verticals
- Consumers find value in advertising that aligns with their interests or rewards them
- Brands are increasingly emphasizing the importance of customer lifetime value (LTV) and the customer experience in the context of their advertising initiatives
This is why Jukko focuses on delivering value to consumers within the ad experience and providing advertisers with new ways to create brand interactions that stand out.