According to the forecasts of the App of Annie, by the end of 2021, the volume of the global mobile advertising market will grow to $290 billion compared to the $240 billion 2020 year.
Back in 2019, the share of mobile advertising reached 60%, and by 2024 it could make up to about 67% of the market.
Let’s look at why mobile advertising is growing, how it works, and why advertisers can’t do without it.
Screen time is growing.
The time spent on using gadgets is growing every year. The number of smartphone users in 2023 will increase to 4,3 billion people in the world, with 3.6 billion in 2020. Experts predict that in 2021, on Android devices alone, the time spent on streaming, social media, and other apps people use at home will reach 1.3 trillion hours.
Number of smartphone users worldwide from 2016 to 2023 (billion)
According to App Annie, in 2020, users started spending 4 hours and 20 minutes on smartphones on average – a record. In the third quarter, the time spent on mobile applications grew by 25% year-on-year.
The rise of mobile gaming
If earlier advertising in mobile games was only beneficial for niche brands, now children, boomers, housewives – not only young students – have become gamers for a long time.
Quarantine accelerated growth:
According to Unity Technologies, the number of active users of mobile games grew by 17% year on year in the early days. According to App Annie, growth continues: the global mobile games market could reach $ 120 billion by the end of 2021.
The number of ads viewed per day in games grew by 14% to almost four pieces, games, advertising revenues on the results of 2020 the year rose to 8%. Unity has teamed up with Snap to create a platform for delivering effective ads in mobile games.
M-commerce is growing – purchases from mobile phones
According to forecasts to eMarketer, in 2024, global retail sales of mobile commerce will reach nearly $ 4.5 trillion, which will amount to 69.9% of total retail e-commerce sales. Sales of m-commerce in the United States, 2018-2022 gg.
As of the end of 2020, in Russia, the time of use of mobile e-commerce applications has doubled, from 25.8 million hours per week in December 2019 to 51.8 million hours per week in November 2020. The most famous shopping apps for Russians are Avito, AliExpress, and WildBerries.
The largest mobile advertising channels are Facebook and Google. By 2020, they retained their leadership – Facebook and Google were the most influential sellers in 79% of categories. In another 82% of categories, they have the largest amount of advertising. Google leads by a wide margin on Android devices and Facebook on iOS.
Placement channels are not limited to Facebook and Google: These company websites, banner ads in mobile apps, advertising on the content on the streaming and messengers. Have each has its advantages:
- it is easy to target advertising on websites to the relevant audience segment – banners in applications provide high reach,
- advertising in messengers gives access to a premium audience,
- videos in video content provide high ad retention rates.
Advertising in the TikTokapp is one of the fastest-growing in the market. Buying through the interface gives you more targeting options and allows you to track performance transparently.
On the background of the growing popularity of the company sharply increased the price of accommodation. For promotion on the home page in the IV quarter of 2021, American advertisers will pay $ 1.8 million during the Christmas holidays – more than $ 2 million. This ad will receive up to 109 million views.
Russian marketers are waiting for the launch of a full-fledged Telegram advertising platform. About The messenger, developers are talking about opening their advertising platform from the end of 2020. Even now, when the advertising market in the messenger is chaotic and challenging to analyze, the volume of advertising in the Russian-speaking segment is about 13 billion rubles.
Mobile ad formats
Banners on websites
It is essential to remember about banner blindness – back in 2011, analysts from Solve Media calculated that the probability of clicking on a banner is lower than the probability of surviving a plane crash. According to AdIndex, advertisers are planning to opt-out of banner ads. Among tour operators and sports brands, the share of banners in split fell from 15.9% to 5.7%.
However, companies are not yet wholly abandoning banners: their share in the split is falling, but investments are not stopped.
Video advertising in content
In-stream and out-of-stream advertising are classic types of advertising in video content. Among their advantages are targeting accuracy, low cost of production of creatives, good attitude of users. Many sellers have prepared brand security tools for video ads.
In-stream advertising is divided into:
- Pre-roll – video before the start of the video
- Mid-roll – the video interrupts the video
- Post-roll – video after the end of the video
- Pause-roll – the video starts after the video is unpaused
- Out-of-stream ads are displayed along with the video in a separate window.
The video should immediately involve the user and quickly tell about the product: at the first opportunity, the video will be missed by 37% of users.
Short videos are no more effective than long videos: a six-second video can increase brand preference by 9% and the likelihood of a purchase by 5%. A fifteen-second video will increase these rates by 10% and 4%, respectively.
New and non-standard formats
Technologies allow users to interact with advertisements in a new way: complete a mini-game, swipe up, “wipe” the device screen. In these ads above conversion – after interactivity among users more motivation to make targeted action. According to Odnoklassniki, the conversion rate of interactive advertising is, on average, three times higher than that of traditional formats.
AR / VR Ads
AR campaigns use an image from a smartphone camera and superimpose a 3D model of an object or effect on it. The model seems to become a part of the real world – it can be viewed from different angles, moved in space. This requires a lot of computing power and high-speed internet. This is the main disadvantage of AR advertising – it only works on modern, powerful devices.
The advantage of virtual reality advertising is the wow effect. According to Ericsson Emodo, 61% of those surveyed find AR ads more memorable. ROAS (return on ad spend, ROI) for one of the AR campaigns was almost 3.8 times higher than for regular campaigns of the same brand. Google has been offering beauty brands virtual try-on since 2019, and Facebook is showing AR ads right in the news feed.
Shoppable ads with the ability to buy
Shoppable ads are more often used in video and photo content – YouTube, TikTok, Instagram, Facebook, Pinterest are experimenting with the format. Users may not just look at the product in the blogger’s video review but also immediately buy the product they like.
The IAB estimates that the number of advertisers using shoppable formats is constantly growing. If in 2018 the format was chosen by 25% of brands, then in 2020 – already 40%. However, users are not yet impressed by such advertising. Only 36% of those surveyed are ready to turn away from watching a movie or TV series and click on an ad.
Prohibition of advertising surveillance
The developers of the Firefox browser blocked trackers back in 2019, and the completely anonymous Tor browser appeared 18 years ago. However, the active phase of the fight against surveillance began about a year ago, when Apple said that the Safari browser would start to protect users from ad trackers, and the IDFA would be disabled.
There is still no single alternative targeting tool, and users have already begun to abandon advertising tracking. According to some reports, about 88% of users who have installed iOS 14.5 have opted out of targeting. In the US market, CPM (cost per thousand impressions) for iPhone owners with iOS 14.5 fell by 14%, for owners of any iPhone – by 3%.
There are also other data: AppsFlyer claims that an average of 39% of users agreed to ad tracking in March-April. In photography applications, this value reaches 64%, in shopping applications – 44%. On social networks, 25% agree to track, in hypercasual games – only 12%.
The number of users who have agreed to advertise shadowing (weighted average from 20 March to 20 on April 2021)
Creatives in mobile advertising
It is cheap to produce creatives for mobile ads so that banners can be changed almost every week. Cost-effective reach and high traffic are essential, which is why brands usually limit themselves to static images. The main difficulty is to prepare separate banners for different device models, test different screen resolutions.
Before ad trackers were banned, brands could generate hundreds of banner options, quickly test them across all audience segments, and select the best ones. Now marketers are likely to work not with extremely narrow audience segments and with all potential customers at higher funnel levels.
Benefits of mobile advertising:
- Coverage: Users spend 3-5 hours a day with their phones continuously. The number of websites and services is growing, and everyone sees mobile advertising.
- Variety of formats: options depend only on the budget and campaign objectives – formats range from text banners to augmented reality.
- Relatively cheap: Mobile ad creatives are inexpensive to produce and don’t need large budgets to launch a campaign.
- Accurate analytics: It is difficult to predict how limiting ad tracking will affect analytics in the future, but so far, mobile advertising remains a predictable tool.
Launching mobile advertising Checklist
Before launching a campaign, it is essential to:
- Work out the target audience and draw up a portrait of it. Marketers can no longer target some of their ads with great precision, but this data makes it easier to work on a campaign.
- Set up KPIs for promotion. Different formats are suitable for campaigns with other goals: if you need to tell about a product, you can choose an in-stream video, an outreach campaign can be launched using banners.
- Think over a media split for the given KPIs. What services does the potential audience use? Where are competitors being promoted? Which metrics are more critical for the campaign? Answering these questions will help you choose channels.
- Develop creatives for campaigns. The trend is changing – instead of hundreds of deeply personalized creatives, you can look at more generic creatives at the top of the funnel.
- Test the campaign at launch. For testing to be effective, you need to set aside time for training and optimization.
For advertising to be effective, users need to see it where it is convenient for them. Today smartphones have become such a channel. Advertisements can be placed quickly and with a minimal budget and, if necessary, run a wow campaign with the latest interactive formats.
The importance of mobile will only increase in the future. The time spent on smartphones is growing steadily, and so far, there is no evidence that this will change in the future. The development of high-speed Internet and the growth of the computing power of devices will open up new innovative formats for brands.