73% of media buyers favor programmatic in-app ads, study finds

Brief:

Nearly three quarters (73%) of media buyers favor programmatic in-app ads for stronger customer engagement and targeting abilities, according to a Forrester Consulting study commissioned by programmatic ad firm PubMatic. Fifty-six percent of respondents said they saw better audience targeting with in-app ads, while 54% reported more effective customer engagement.
Media buyers are allocating almost half (45%) of their digital advertising budgets to mobile platforms, split evenly among web and app placements. These marketers favor in-app publishers based on inventory quality (58% of survey respondents) and providing a brand-safe environment (56%).
Just over half (52%) of brand advertisers said their biggest concern about in-app advertising was ad fraud, while 36% of their agency partners reported the same concern. Ad viewability was the top issue for 48% of agencies, given that many rely on traditional KPIs to gauge their in-app campaigns.

Insight:

Brand advertisers and media buyers looking to reach audiences who have migrated their viewing habits to mobile have many opportunities for ad placements, including the rapidly growing market for programmatic in-app ads. However, as Forrester Consulting's survey indicates, most marketers still have reservations about the pitfalls of a platform that should be able to provide some of the deepest insights of any medium, due to data on location, mobile content consumption and app usage.

Still, ad fraud and viewability are major concerns that app developers must address to support continued development of the in-app ad market. In-app ad fraud on mobile devices surged 800% in 2018 from the prior year, according to a DoubleVerify study. App spoofing, hidden ads and mobile hijacked devices fraudulently divert ad spending, the company said.

IAB Technology Laboratory, the nonprofit research and development consortium, is working to expand the adoption of its Open Measurement Software Development Kit (OM SDK) to track mobile in-app advertising and make it more transparent for marketers seeking greater insights into consumer engagement and leverage those insights for stronger ad targeting. The OM SDK is a set of software tools designed to facilitate third-party viewability and verification measurement for ads served in mobile app environments and is being deployed among hundreds of thousands of apps with a combined global reach of about 2 billion devices.

Meanwhile, apps still represent a lucrative opportunity for marketers. Revenue from app marketing has surged 80% since 2016, but developers still face challenges in boosting user loyalty, retention and profitability, a separate study from measurement platform AppsFlyer suggests.