User Dissatisfaction with In-App Advertising
The use of in-app ads by publishers has been increasing for some time. 81% of mobile game publishers and 49% of app publishers reported using in-app advertising in 2017 (59% total), up from 49% in 2015. Some app verticals overwhelmingly use advertising as a secondary or primary revenue source. Casual mobile games provide a noteworthy example, with only 7% of such publishers reporting not using ads to monetize, according to the 2017 ad survey study from deltaDNA.
App users nowadays have an infinite choice of apps to select from, so in-app advertising has become a double edged sword in many ways. It is necessary as a supplemental (or in some cases primary) monetization driver, but inclusion of advertising can worsen the user experience, resulting in lower retention and LTV alongside increased churn and worse app reviews/ranking. The effect of poor advertising on publisher monetization is far greater when taking into account these interaction effects.
When assessing ad tech options, publishers should be asking: What is the value the advertising delivers to my users? Is it intriguing, worthwhile and exciting? Technological advancements within in-app advertising are all well and good, but improved technologies will fall short unless they provide inherent value to the end users. With only 40% of users reporting at least sometimes engaging with mobile ads, it’s evident new ad tech innovations are incapable of delivering greater value to users on its own.
The best ad monetization platforms are those that put the user experience front and center, emphasizing the effect of advertising on user retention, IAPs and lifetime value. Kiip does a great job of this with their moments-based rewarded advertising, while Tapjoy and IronSource are top class in terms of rewarded advertising. Improving the effectiveness of ad monetization starts with changing the value proposition for users. Rewarded advertising has made great headway in this regard, but the industry is still lacking some creativity that goes beyond the now well-established rewarded ad options.