According to research from eMarketer, in-app advertising is set to be a key driver of mobile growth over the coming years. Estimated to reach $20.8bn in spending this year to account for 72% of total mobile ad spend, the majority share of in-app marketing still comes from non-programmatic transactions.
In-app advertising on the rise
However, US marketers are projected to spend $15.5bn in programmatic adverts this year, rising by 37% to $21.2bn next year.
Catherine Boyle, Senior Analyst, eMarketer, at the Mobile Marketing Association (MMA) Mobile Automation & Programmatic Leadership Forum, spoke about the rise in in-app programmatic ad spend. She also highlighted that mobile display ads were set to reach $22.4bn in spend in 2016, adding:
“The mobile display advertising business is not a small business.”
In addition, the research pointed to Facebook as the dominant player within mobile programmtic, generating 51% of ad dollars.
Mobile users now spend more time in apps than on the web. In fact, 79% of consumer time is spent in-app, whilst 20% use the mobile web. It’s unsurprising then that 73% of ad spend happens in-app. After all, advertisers go where their audiences are.
Boyle noted that whilst more web impressions were being bought and sold compared to in-app impressions, things are heading towards in-app impressions. The total expenditure on the mobile web still outranks in-app spend, but for 2016 estimates show that programmatic in-app and web impressions will be equally split.
For now, much of in-app inventory is going to gaming apps and utilities. Premium content remains to be predominantly seen across the mobile web. However, things are changing quickly as more marketers are noting the benefit of location-based advertising as well as more advanced targeting features using IDs.
In addition, interest in mobile programmatic is on the rise with average CPMs adjusting accordingly. According to eMarketer, CPMs for iOS rose 109% in Q3 2015 and another 40% in Q4 2015.