In-App Advertising: Meaning, Formats, and Benefits

January 27, 2022 5 min read
In-App Advertising: Meaning, Formats and, Benefits | VDO.AI


In-App Advertising: Meaning, Formats, and Benefits

Reading Time: 5 minutes

An extensive growth can be observed in mobile application usage these days, everyone around you is either consuming video content on an app or is shopping through another. Along with this growth comes in picture “In-App Advertising” which is one of the most effective advertising strategies for brands to capture consumers’ attention. As per statistics, consumers spend an average of four hours either on gaming, social media, shopping apps. Taking this fact into consideration, it can be projected that mobile ad expenditure will surpass $400 billion by 2023.

In-app advertising provides an opportunity to publishers and advertisers to accelerate their revenue with interactive ad formats.

Why In-App Advertising?

In-app advertising is an impactful advertising strategy that advertisers leverage to display their brand’s products/messages within a mobile application for users. It drives higher revenue for advertisers and mobile app publishers.

A survey by E-marketer clearly represents that smartphone users will spend 4 hrs 6 mins on the internet per day in 2022. The above-given graph depicts that more than 80% of their time is and will be spent using mobile apps, not the browser.

As mobile consumption is driven by smartphone apps, in-app advertising has become an essential marketing channel for publishers to showcase their content to users and boost engagement.  

In-App Advertising Formats

With the advancement in the advertising industry, there is a variety of in-app ad formats available that help advertisers reach their target consumers with accuracy while driving higher revenue.

Following are some main in-app advertising formats:

  • Interstitial Video Ads
Interstitial Video Ads
Image Source: Tech Crunch

Mobile interstitial ads are full-screen banner ads that are often displayed in gaming apps. They capture the audiences’ attention by taking over the screen and can’t be closed until the interval ends.

  • Rewarded Video Ads 
Ads - Business of Apps | In-app advertising
Image Source: Business of Apps

Rewarded Video Ads offer the incentive/reward to the user who is watching the ad in return for the extra life, coins, power-ups, or valuable content. These ads last for 15-20 seconds and provide a skip option to the users.

  • Native Ads
In-app advertising
Image Source: Sellmyapp

Native Ads is an impactful ad format due to their ability to blend into the content on screen. These ads aren’t perceived as direct advertising by the users, therefore, native ads drive higher engagement and build user loyalty.

  • Banner Ads
Mobile Banner Ads | In-app advertising
Image Source: Businessofapps

Banner Ads are the traditional method of advertising and they are also known as Display ads. These ads are smaller in size and appear either at the top or bottom of the screen.

  • In-Stream Ads
YouTube Rolls Out New Ad Formats for Mobile-First Audiences | In-app advertising
Image Source: Ad Week

In-stream ads are shown within the video, either before, during, or after the video plays. These ads usually last for 15 to 20 seconds. These ads effectively promote brand awareness while creating a purchase intent and conversion.

How does In-App Advertising work?

  • In-app advertising requires an ad network, app developers, and publishers to decide which portion of the app shall equip the ad and which ad format should work the best. 
  • Advertisers need to choose the target audience to whom they want to showcase the ad. Afterward, advertisers and publishers finalize the cost of the ad campaign.
  • At the third step, the ad networks’ quality standards, protocols, and management systems are verified and the ad gets in the queue.
  • The ad network decides the relevant ad depending on the SDK’s data, whereas the user may skip the ad or may not take the desired action after watching the complete ad.
  • The above action directs us to the last step, payout. Now, the advertiser can review how the in-app ad campaign performed and the payout is made according to the performance of the campaign. 
App Annie's stats on 2021 mobile app usage. | In-app advertising
App Annie’s stats on 2021 mobile app usage

Key Stats: Mobile Usage and In-App Advertising

  • 21% of millennials report accessing mobile apps at least 50 times per day (The Manifest)
  • Consumers spend 85% of the time on smartphones in apps (Tech Crunch)
  • By 2024, global mobile ad spend is projected to reach 495 billion U.S. dollars (Statista)
  • In-app notifications of high-performing apps are reaching 45% of users. (AirShip)
  • 51% of total ad spending will be generated through mobile in 2026. (Statista)

Benefits of In-App Advertising 

Higher Revenue

In-app advertising offers a range of ad formats to advertisers. The interactive ad formats result in higher click-through rates. This acts as a win-win situation for both the advertiser and publishers.

Immersive User Experience

An ad that is connected to the game, like Rewarded Video Ad, is a smart way to engage the audience and deliver a seamless user experience. This helps to garner users’ attention in an innovative way.

Boosts Engagement

Well-targeted in-app ads appear at the right place and at the right time drive more user attention. When a user sees an ad at the right time, he is more likely to engage with that particular ad. 

Final Words

As mobile app usage is skyrocketing, it’s a golden opportunity for both publishers and advertisers to optimize it to the best of their ability. By providing an immersive user experience to users with seamless ad formats and connecting with top advertisers, publishers can monetize more.

If you’re a publisher who’s interested to unlock new revenue stream through engaging in-app ad experiences and attain exponential results in 2022 , VDO.AI can help you achieve it with its unified programmatic ad solutions.

Ayushi Vedwan is a Strategic Marketing Associate at VDO.AI. She is a curious person who keeps learning something new and the rest of the time, she is dabbling with creative ideas.