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The Outlook for Mobile Advertising in 2015 With InMobi

App Annie

 

We sat down with Atul Satija, VP & Managing Director of Global Revenue & Operations at our Advertising Analytics partner InMobi, to get his view on mobile advertising trends to expect this year.

App Annie (AA): Thank you for taking the time to share InMobi’s outlook on mobile advertising in 2015. Looking back at the past year, we’ve seen a number of M&A deals in the mobile ad tech space, including Yahoo/Flurry, Opera/AdColony and Millennial Media/Nexage. What do you think drove this consolidation, and do you see this trend continuing in 2015?

Atul Satija (AS): Global mobile ad spend continues to grow at a hectic pace of 60% year-over-year. Despite these impressive growth numbers, we at InMobi believe that these are still early days in terms of market opportunity.

Advertisers and ad tech companies are convinced that mobile will be, if not already is, the dominant platform for consumer engagement. Success in this space requires scale and critical mass on the one hand, and a comprehensive technology and platform offering on the other. Companies that lack one or both of these will be looking to acquire or be acquired depending on their size and appetite. The acquisitions that we saw in 2014 were an indicator of this market dynamic: online ad tech or media companies building mobile capability, or mobile ad tech companies acquiring critical technology platforms that they have been lacking.

We anticipate that consolidation will continue in 2015 as companies look to enter or compete in this highly lucrative market, or plug gaps in their technology portfolio.

 

AA: Speaking of online ad tech transitioning to mobile, we continue to hear about the impending rise of programmatic buying on mobile. Will 2015 be the year of mobile RTB (real-time bidding)?

AS: According to IDC, global programmatic spend — including all mobile and online display and video advertising — accounted for US$4.8 billion in 2013. This is expected to jump to US$55.3 billion by 2017. At that point, programmatic buying will represent nearly 59% of global display ad spend.

Digital advertisers are used to buying programmatically in the online world, and their expectation — the ability to seamlessly, efficiently and transparently buy audiences and impressions — remains the same as they move to mobile. Similarly, many large premium publishers that have been monetizing their digital inventory through exchanges have been looking for mobile exchanges for their mobile inventory. We expect to see the shift to programmatic on mobile to accelerate in 2015.

 

AA: Are there specific challenges facing the adoption of programmatic buying on mobile?

AS: Yes, a majority of DSPs (demand-side platforms) and buyers do not yet have the ability to programmatically buy their target audiences within mobile apps due to the difficult transition from cookies to device IDs. By offering mobile app audiences via direct order automation, including audiences from third parties, InMobi is helping to provide a solution for mobile programmatic buyers that they can immediately leverage.

 

AA: You mentioned audience targeting. In 2014, we saw mobile ads being targeted more precisely at the viewer. How do you see audience targeting further developing in 2015?

AS: Standard targeting features such as demographic (age, gender), technographic (device, operating system), geographic (location, point of interest) and psychographic (content consumed, ad clicked on) data have worked well in the past. However, targeting will need to become more sophisticated to address the evolved needs of advertisers. For example, InMobi Appographic Targeting offers audience targeting based on the types of apps and games users own and play. Initial results from Appographic Targeting have shown significant increases in conversion rates for advertisers looking to acquire high-value users.

 

AA: Shifting gears to ad formats, we’ve seen a lot of interest in video ads from our own app developer community. Are you also finding mobile video ads to be in high demand among your advertisers?

AS: Video will continue to be a pivotal component of advertising in 2015 for marketers, and most of this content will be consumed via mobile. According to eMarketer, spending on mobile video ads exceeded $1 billion in the U.S. in 2014 and will increase considerably over the next five years. On the InMobi network, mobile video campaigns have been witnessing high double-digit growth, driven by increased engagement and performance.

 

AA: Are certain mobile video formats more popular than others?

AS: Full-screen formats such as interstitial video are by far the most popular mobile video format amongst brand and app advertisers. We are also seeing rewarded video (ed. note: in-app rewards for watching video ads) driving high conversion rates for our advertisers, as well as high eCPMs for publishers. Other innovative ad formats like the InMobi Interactive Canvas, featuring interactive elements, are also generating high interest — particularly among brand advertisers.

 

AA: Can you offer practical advice for developers trying to create engaging video ads for their apps?

AS: Based on our video campaign analysis, some best practices to get the most out of mobile video campaigns are:

  • Customize creative for the target device, since not all screens are used in the same way.
  • Test, test and TEST creative – both audio and video.
  • Implement interactive elements to drive higher consumer engagement.
  • Create shorter videos for smartphones since they perform better, and reserve longer videos for tablets.

 

AA: What about native advertising formats? How can other platforms or publishers replicate the type of success that Facebook and Twitter have seen with their in-stream ads?

AS: The type of native advertising as seen on Facebook and Twitter has been around for some time in the digital world. Formats like this are designed for proprietary mobile properties and therefore, in many ways, are easier to manage.

With mobile users spending nearly 80% of their time on apps other than those two social networks, native advertising platforms that bring native or contextual experiences to the rest of the app landscape — whether entertainment, news, social, lifestyle or utility apps — present a huge opportunity. We created the InMobi Native Ads Platform to enable any publisher to implement native ads across a much broader spectrum of apps than just newsfeeds.

 

AA: Before we wrap up, is there anything else you would like to convey to our readers about how they should leverage mobile advertising in 2015?

AS: Marketing wisdom suggests that it makes far more business sense to invest in retaining an existing customer than to acquire a new one. Mobile app marketing, too, has evolved from focusing simply on user acquisition volume, to then focusing on the lifetime value of acquired users, to now engaging and re-activating users.

As competition intensifies, app developers are discovering that the cost of high-value user acquisition is increasing multifold. At the same time, they have a large number of existing users that are either inactive or have reduced engagement. While app developers continue to invest in acquiring new high-value users, they should be—and many of them actively are—investing in re-engagement campaigns to revive users who were once high-value. As the mobile app market continues to mature globally and saturate in some of the more developed markets, we expect to see higher investments in re-engagement campaigns.

AA: Thank you for your time and insights, Atul. We look forward to seeing how the mobile advertising landscape evolves over the course of 2015.

Atul Satija Photo InMobi

InMobi Logo

Atul Satija leads and manages overall revenue and operations at InMobi, and is responsible for managing and scaling its global business. InMobi is the world’s largest independent mobile ad network and provides a powerful platform for developers that want to acquire, engage, and monetize users globally. Recognized by the MIT Technology Review as one of the 50 Disruptive Companies, InMobi reaches over 872 million mobile uniques across 200 countries. Follow them on Twitter at @InMobi.

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January 23, 2015

App Monetization
Mobile App User Acquisition

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