A Complete Guide to In-App Advertising (With Benefits and Tips)

By Indeed Editorial Team

Updated March 29, 2022 | Published June 15, 2021

Updated March 29, 2022

Published June 15, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Effective advertising can help companies reach their target audiences, boost sales and educate consumers on their products and services. In-app advertising is one strategy businesses can use to connect with their customers. Because mobile users can spend significant amounts of time in mobile apps, the method is gaining popularity among advertisers. In this article, we explain what in-app advertising is, list what some of its benefits are and provide tips you can use to maximize the effectiveness of your in-app advertising campaigns.

What is in-app advertising?

In-app advertising is a sales strategy companies use to place their advertisements within smartphone applications so mobile users can see them. The approach's popularity has increased significantly in recent years, especially as advertising revenue accounts for a larger portion of apps' revenue streams. Social media sites, mobile-game applications and streaming apps are some places where you might see in-app advertising in use. Content and app developers often work to provide smooth in-app transitions so that advertisements don't significantly detract from the user experience.

In-app advertising can be an effective technique because it allows advertisers to target specific sections of their audience based on the app's leading demographics. Advertisers who use this method often pay for the service using pay-per-click payment structures. This helps advertisers only pay for ads that successfully reach their customers and analyze their click-through rates (CTR) to see how app users are interacting with their ads. Effectively placed ads can increase sales for advertisers and improve engagement for mobile app publishers.

Related: What Is PPC and How To Use It

Benefits of in-app advertising

There are many advantages to using in-app advertising. Here are some of its benefits:

Insightful

In-app ads can provide valuable insights for advertisers. For starters, mobile apps often collect user data like location, age and preferences. Advertisers can use this data to make their ads highly targeted and specific. They can even alter certain content to better suit different audience segments. Most traditional marketing channels, even web-based channels, don't provide this level of customer awareness.

Advertisers can also receive specific metrics about how users are interacting with their ads. For example, retail advertisers might be interested in tracking statistics on users who click on their ad but don't make a purchase. They can use these insights to develop strategies like optimizing their landing page or making mobile checkout more accessible.

Profitable

One reason many advertisers choose to gravitate toward in-app advertising is that it typically generates high conversion rates. Higher conversion rates mean not only is the ad reaching users, but it's also convincing them to make a purchase. It also makes the purchasing process easy for users. Many social media apps allow users to navigate to third-party sites seamlessly. This can create more sales for the company.

Data can also give advertisers insight into the effectiveness of their ads. By tracking how customers respond to their content, they can allocate more resources to the ads that generate more traction and sales for their company. It can also allow them to discontinue ads that aren't connecting with customers effectively. This lets them optimize their ads and their marketing spends to get the maximum return on their investments.

Related: 7 App Monetization Strategies To Consider

Mutually beneficial

In-app advertising can benefit both the advertiser and the hosting app. Because advertisers account for a large portion of many apps' revenue streams, ad hosts are usually looking for fresh ways to provide value to their advertising clients. This can mean more comprehensive data, better targeting and improved conversion rates for advertisers.

The more clicks, purchases and downloads users execute, the more financially beneficial it is for both parties. Incorporating targeted and successful ads into their app experience can increase the money mobile app developers make. This is good for the advertiser because both teams are working toward a common goal of effectively targeting ads for maximum user engagement. Effective ads can improve the user experience and add to the app's user value as well.

Targeted

Using mobile apps for advertising campaigns can be an effective way to reach specific customer segments. For example, an advertiser hoping to connect with younger consumers might choose to advertise their products and services on social media apps. Workout equipment suppliers might use exercise-oriented apps to make sure their ads apply to the app's users. Personalization, data tracking and algorithms can allow advertising teams to explore potential markets and analyze the effectiveness of their targeting approaches. Targeted content and personalized ad experiences can help advertisers connect and build relationships with app users.

Tips for effective in-app advertising

Here are some tips you can use to help you reach your audience and improve the effectiveness of your in-app mobile ads:

Identify your customers

One of the best ways you can create effective ads is to identify your target audience. Consider creating profiles for your customers and try to compile a list of apps those customers might use. If you're advertising live music events, for example, you might try to advertise to young adults in the area who regularly engage with similar content. Many social media apps allow you to adjust your audience preferences to ensure your target customers are seeing your content. Understanding your audience is one of the first steps to effectively connecting with them.

Related: How To Select and Develop a Market Segmentation Strategy

Understand how in-app advertising works

In-app advertising often uses different payment structures and preference selections than traditional forms of advertising. Familiarizing yourself with the in-app experience can help you design relevant and effective content for an app. Most mobile apps charge for content space by tracking data on user criteria like views, clicks, leads or conversions. Try to keep track of the amount you spend on your advertisements to make sure you're getting adequate returns.

Understanding the data can also help you interpret metrics like engagements, clicks and leads. You can use the data to inform your advertising strategies and develop the strength and effectiveness of your ads. In-app advertising can also require you to develop a landing page. This is where your customers go after they click on your ad. Designing your content to fit in-app specifications can be crucial to optimizing your advertising efforts.

Choose the right format

In-app advertisements can come in a variety of forms. Understanding the different formats and how they work can help you choose a format that successfully reaches your customers, creates better user experiences and encourages engagement.

Here are some in-app formats you can choose from:

  • Rewards: Reward formats offer incentives to app users for watching or interacting with an ad. For example, music streaming apps sometimes give listeners a choice of watching a video to receive a window of ad-free listening, and free games or special offers are other examples of in-app reward advertising.

  • Banners: Banners use text, moving images and pop-ups to attract the attention of customers. Usually, these display on the screen of the mobile device and remain visible in the app even as users navigate through the app's native content.

  • Native: Native ads appear alongside the host's content and often seamlessly integrate into their text or videos. Embedded links are one form of native content.

  • Interstitial: Interstitial content appears as its own window within the app. Interstitial ads often take advantage of natural transitions in the app's offerings. For example, mobile game apps might show an interstitial ad between game levels.

Related: 8 Types of Digital Advertising: Definitions and Benefits

Analyze your data

Recording your user engagement data can help you improve the effectiveness of your ads and better reach your target audience. Many apps provide user data like conversion rates, cost per click metrics and user impressions. Recording and comparing this data to other strategies and content can help you maximize your advertising results, focus your marketing efforts and appropriately allocate your advertising dollars. Relevant ads can generate more sales and provide larger returns on your investments.

Define your budget

In-app advertising's payment structures can sometimes be expensive, especially if your ads aren't generating the returns you'd like them to. Defining your budget early can help you manage your investment expectations and prevent over-spending. Consider how much you're willing to spend on ads and focus on adapting your strategies cost-effectively or taking down ads that aren't meeting expectations.

Related: 32 Effective Advertising Tactics

Collect feedback

Although in-app algorithms and data tracking services can give you significant insight into your customers, they can't always summarize user experience as well as your audience can. Consider creating pathways that allow your target audience members to communicate with you. This can help you gauge the effectiveness of your ads and increase user engagement with your content. Understanding user perspectives and preferences can help you target your ads more effectively. This can help you refine your strategies and find the most effective ways to present your ads in others' apps.

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