How Mobile In-App Ads Drive Profit For DTC Marketers

Direct-to-consumer (DTC) marketing strategies have been big business in recent years. From startups to brand dynasties like Gillette and P&G, circumventing traditional retail helps keep overhead costs down while appealing to new generations of tech-forward shoppers. 

As competition heats up, DTC marketers are quickly learning that effective growth strategies need to extend beyond the Facebook/Google duopoly to get results. Mobile in-app advertising is one of the few channels mature enough to offer the outcome-oriented pricing options needed to demonstrate ROI, in addition to a variety of other benefits exclusive to the medium. 

The result is a reliable and effective addition that many DTC marketers have already added to their overall strategy, so let’s take a closer look at what makes in-app ads so appealing.
 

Risk-Free Performance Pricing

The success of in-app ads has always been rooted in results, and that allows for an incomparably low-risk vetting process for those just getting started. With a little time spent on initial optimizations (our managed services team can help!) you can leverage the data-rich mobile landscape to zero in on a campaign’s ideal audience and clearly tie your spend back to meaningful returns. While legacy channels require marketers to risk big upfront investments on campaigns that aren’t guaranteed to deliver results, in-app ads mitigate these risks with a variety of performance-based pricing options, including:

Under models like these, you only pay for the results you’re after. Better still, in the case of cost-per-action campaigns, these outcomes can be just about anything. For example, a CPA ad campaign might define success as:

  • Taking a survey
  • Signing up for a trial
  • Buying a product

This strategy enables marketers to tie campaigns directly to acquisition, growth and revenue KPIs, such as their target cost-per-subscriber or sale (CPS). No matter the approach, the greatest strength of performance pricing is that it can be easily tied to measurable business outcomes. This clarity makes it easier than ever to justify your budget choices while putting more responsibility on the ad network to deliver results.

 

Value-Exchange Advertising Models

With the declining consumer attitudes towards interruption-based advertising, in-app ads offer DTC marketers a powerful alternative in the form of rewarded ad placements. 

Unlike traditional advertising, the overwhelming majority of mobile in-app ads are delivered on a value-exchange (or rewarded) basis, meaning users opt-in to view them by voluntarily engaging with an ad in exchange for a reward within the app. This model works particularly well within the mobile games space. Rather than gift cards or cash incentives, mobile app users are given virtual rewards in exchange for their time and attention. Some examples are in-game currency, additional time or unlocking a new level – all of which are valuable to the user because it allows them to continue engaging with the app further on. This environment also has a number of benefits for advertisers:

  • No Ad Blockers: Unlike digital display advertising, rewarded advertising sidesteps the growing threat of ad blockers by making the reward payout contingent on a full completed view of the ad creative. Reward payout logic is built directly into the app’s code, and if users don’t view the app, they don’t receive the reward. 
  • Positive Sentiment: Unlike interstitial ad placements, rewarded ads ads ensure that audiences are in a positive emotional state when viewing the ad itself. Advanced marketers are able to leverage this as a valuable data point and plan to their creative appropriately. This kind of emotional resonance has allowed media institutions like The New York Times to achieve campaign performance increases as high as 40%.
  • Consistent User Experience: Properly integrated rewarded ad placements give developers the opportunity to make them feel like any other part of their app, ensuring a smooth and intuitive advertising experience for audiences that translate into higher conversion rates for advertisers.

No matter what you call it, opt-in advertising formats have quickly become the new gold standard in mobile advertising. To learn more, be sure to check out the Interactive Advertising Bureau’s guide to optimizing your growth strategy for opt-in ads.

 

Audience Diversity

Mobile in-app advertising offers marketers the chance to explore one of the most diverse audience pools in the world, especially in the world of mobile games. In fact, games are tied with music as the third most popular mobile app category in the world. 

Better still, a 2019 study by Newzoo found that mobile gamers are among the most receptive audiences to advertising. As the study explains, “Mobile gamers are much more receptive to advertising than nongamers. For example, they are more likely to buy things from brands that have ads they like, to use ads to keep up to date with products and services, and to associate advertising with high quality brands. They are also much more likely to have a favorable attitude toward a suite of global brands.”

Our own research suggests the same. A recent Tapjoy study found that only 10% of respondents report actively avoiding in-app ads, with the remainder actively looking to engage with rewarded ad placements. In fact, some rewarded ad formats like mobile offerwalls are so deeply integrated into the native gaming experience, that almost half of users surveyed said they’d stop playing if they were removed. 

For these reasons and more, in-app advertising isn’t just another marketing channel for DTC advertisers. It’s an essential part of any comprehensive marketing strategy aimed at consistent, net-positive growth and competitive differentiation. To find out how you can use the power of mobile games and in-app advertising to maximize your return on ad spend, contact our mobile marketing experts today. If you’d like to learn more about the value that mobile gamers represent for DTC marketers, be sure to check out our blog for more great DTC marketing insights.

 

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