Marketers spend 42% of app install ad budgets on video, study finds

Brief:

App marketers spend 42% of their app install budgets on video advertising, making it the most popular way to drive downloads. Marketers divide their remaining spending among display ads (23%), search ads (9%) and free app networks or cross promotion (7%), among others, per a study that mobile video ad network AdColony shared with Mobile Marketer.
More than half (54%) of app marketers plan to boost their user acquisition (UA) campaigns this year, with 41% saying they would increase their reach and demographics. About a quarter (27%) of marketers will shift toward video, the survey found.
Twenty-three percent of app marketers plan to shift more of their budgets toward Android, a sign that the mobile operating system is gaining traction among mobile users and app developers. The same percentage of marketers said they're testing new marketing channels this year, according to AdColony.

Insight:

Video advertising is a compelling way to drive app downloads, with app marketers heavily relying on the format, as AdColony's study indicates. Among video formats, full-screen video receives 18% of app install budgets, making it more popular than in-feed video at 10% and social video at 8%. Video also outweighs ad formats like playables, which give mobile users a chance to sample a game, at 6% of app install budgets. More than half (55%) of advertisers described full-screen video as effective, the highest percentage for any ad format.

Almost three quarters (71%) of marketers said price is the most important key performance indicator (KPI) in evaluating ad networks and the performance of UA campaigns. They also considered quality of acquired users (67%), volume of installs (63%), targeting capabilities (63%) and level of service (59%) as important KPIs. About a fifth (18%) of marketers said they would focus more on offer walls in 2020, while only 12% said they would shift toward campaigns on connected TV (CTV) and over-the-top (OTT) campaigns, per AdColony.

App marketers use a variety of outcome-oriented metrics to track the performance of their campaigns, and cost per install (CPI) is used most often by 38% of advertisers. Other key metrics cited by app marketers include cost per action (CPA) at 16% of respondents, cost per mille (CPM) at 14% and cost per click (CPC) at 14%, among others. To maximize their campaigns, app marketers were most likely to say they target audiences based on geography (64%), operating system (59%) and lookalike audience (36%), AdColony found.

Media spending to drive mobile app installs is set to jump 32% to $76.2 billion worldwide this year, reaching $118.4 billion by 2022, AppsFlyer forecast in February. While that report was released before the global effects of the coronavirus pandemic were known, mobile usage has surged, giving app marketers more opportunities to serve ads to housebound consumers.