Mobile apps capture more users when they are free. eMarketer predicts that only 33% of US mobile user will actually spend money on apps this year. On the other hand, in-app advertising promises to be an opportunity too big to ignore. According to another eMarketer report, in-app advertising now constitutes over 70% of the US mobile advertising spend and is expected to reach $29.6 billion by 2016. US mobile app penetration in general is high; nearly 93% of US smartphone users and over 90% of tablet users will install at least one mobile app on such devices this year. And these numbers continue to increase. So is there a way to help app developers keep their app free and still generate meaningful revenue? The key lies in the right Software Development Kit (SDK) solution.
The Mobile App Advertising Landscape
It has been a struggle for publishers and app developers to hone in on a consistent way to monetize their apps. Ad revenue has competed with download and post-download potential. But advertising should be a no-brainer—especially with video ads and a focused, visually immersed and engaged audience within an ideal viewing environment.
To ensure that you engage with every mobile audience your app must support Android, iOS (and now, Windows Phone). According to the App Annie IndexTM Market Q12015, Android is winning on downloads, iOS on revenue. Mexico, Turkey and Greece are driving growth for Google, while iOS maintains a foothold in the US and China. Your choice of ad-monetization SDK must provide native support for each of these platforms. By “native” we mean – using the best-in-class platform specific frameworks and capabilities to provide a seamless and immersive user experience. A non-disjunctive user experience engages the user and provides better ad monetization.
Mobile landscape is always evolving and there are logistical factors that complicate the issue, but below are a few things to keep front-and-center when looking at video SDK monetization solutions for your app.
Be Mindful of Emerging Standards
We know that standards are vital to industry scale. But, in an evolving landscape that doesn’t yet have standards, how do you know what rules must be adhered to? Some vendors are using programmatic advertising channel SDKs, which are great for maximizing fill rate, but many of these remnant-optimizing solutions are not focused on brand advertising or high quality video experiences. Leveraging a partner that accommodates emerging in-app standards like VAST and VPAID is critical to scalability and growth.
Keep Flexible and Agile
Any solution should afford you the greatest flexibility in the types of ads that can be served. In addition, you should look at partners that insulate you from advertising partner flux—your already downloaded app shouldn’t need an update because you found a better advertising partner. Your advertising partner should be capable of offering high-impact, high-CPM ad formats like interactive in-stream and interstitials. Additionally, you need the ad SDK to be light (preferably under 1MB) so that you don’t have to worry about file size and download constraints. Server-side configuration is a plus—minimizing the need for app updates, which is good for long-term maintenance and upkeep.
Measuring ROI, Achieving Viewability
According to Google, the average viewability of a video ad across the web—meaning 50% of an ad’s pixel is visible on the screen for at least two seconds—is just 54%. Viewability, and ROI measurement in general, especially for mobile video, is an unresolved issue. To date, there has been no scalable technical solution for tracking and reporting viewability of video ad impressions served within mobile apps. This must be addressed to ensure mobile video continues to experience the exponential growth once dominated by desktop.
There are many solutions that allow you to leverage third-party analytics platforms—Moat comes to mind, and others may follow—that enable better transparency, including impressions, viewable exposure time, video audibility and interactions. To participate in a clean, trustworthy advertising market place, you should think hard about selecting a solution that will be acceptable by the brand advertisers since they will be paying for the ads and audiences.
The Bottom Line
To take full advantage of your app’s ad revenue potential, it may be necessary to work with various SDK partners that provide different, complementary solutions to make the most of a user’s experience, maximize revenue, and understand an audience. Premium publishers should work with SDK/ad tech partners that bring that highest value to their content and enable quality brand advertising within mobile video environments