Brief:

• By year's end, app makers for the first time might see more revenue from Android versions of their apps than iOS ones, Liftoff found. Advertising on Android apps is less expensive than on iOS apps, while engagement rates for video ads are similar on the platforms, according to a new study the app marketing firm shared with Mobile Marketer.
• Install costs for banner ads fell more than 11% to $1.26 per install on Android, making the platform less expensive than the $3.84 for iOS. The cost of video ads on Android was $2.27 per install, about 55% less than on iOS, while the platforms delivered similar engagement rates of about 15%.
• Mobile video delivers better performance than banner ads at the in-app purchase stage than at the registration stage. Mobile video rates of $42.80 per purchase are close to those for banner ads at $42.55. However, mobile video has a purchase rate of 7.7%, or 60% greater than the purchase rate of 4.8% for banner ads. Liftoff analyzed 353 billion ad impressions and 189 million app installs in about 1,400 apps between November 2018 and October 2019.

Insight:

While Android has typically generated more app downloads than iOS, Apple customers have tended to spend more on apps and in-app purchases. Liftoff's study suggests that the gap is closing as Android devices become more advanced and deliver an improved customer experience.

Android's share of smartphone shipments is forecast to be about 87% this year, per IDC, with notable strength outside the U.S. Marketers can reach a broader audience at a lower cost on Android platforms, Liftoff's data indicates.

Mobile video advertising is becoming much more viable as smartphones evolve and cellular companies upgrade their networks with more bandwidth. The expansion of 5G service in more regions worldwide is likely to fuel greater mobile video usage.

Video ads have the highest engagement among ad formats with a purchase rate of 7.7%, compared with 5.8% for native ads and 4.8% for both interstitials and banners, according to Liftoff. That higher rate suggests that marketers should consider adding more video ads to their marketing mix if their goal is to drive app purchases.

Mobile games also are effective at engaging audiences, even if they're more expensive to convert compared with other app categories. Gaming apps have an average registration rate of 73%, which is the highest among all app categories. Marketers seeking to drive purchases from gamers should consider native and video ads because of their comparably low costs. Native ads have the highest engagement of about 70% for the lowest cost at $5.73 in gaming apps, Liftoff said.