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In-app Advertisement


I have run a workshop to facilitate collaboration within Expedia Group teams about introducing advertising products on our apps.

The first part of the workshop was focused on illustrating the current market landscape to understand why introducing advertising products in apps is so important and how can those effectively help customers.

The second part of the session was focused on gathering and digging into ‘Advertiser’ and ‘Customer’ needs respectively to highlight commonalities that might point us in the right direction when brainstorming solutions.

Here I will focus on the market landscape and benchmark analysis.

How the app experience differs from web

On-the-go


Ideal for a fast-paced society in constant movement

  • Immediate access
    It is physically on the screen, one tap away. No need to type in web address or scrolling through different tabs.

  • Focus
    Users stay within the app. On web browser they can swap from one website to another.

  • All in one place
    Account details, previous orders, payment methods all saved in the app.

This allows a more optimised personalised experience.

Full device integration


Apps inherits the system specific capabilities

  • Fast sign-in
    Through native ID recognition (eg. face ID, fingerprint, etc...) ​

  • Native design and interactions
    Users are familiar with the system interface; some  websites might use components in different places (eg. "go back" button)

  • Accessibility settings

  • Location
    Tailored recommendations and quick access to services (eg. taxi apps)

  • Performance
    Apps's speed is generally quicker than web

Engagement


Higher interaction and higher engagement value

  • Brand loyalty
    the simple action of "downloading" the app shows commitment 

  • Notifications
    ability to communicate with the User at any time

  • Additional functionalities
    such as "favourites" or "share", customer support, live chat

  • Immersive experience
    More focus and native design make the experience more immersive​

In-app Advertisement: business perspective


Why it is the future of mobile advertising


Audience

  • 90% of consumers are influenced by advertising1

  • Mobile is set to be the dominant channel2

  • 75% of digital users use mobile apps2

Targeting

Features such as location dataDevice ID and advanced campaign analytics make in-app ads a highly targeted path to reaching and converting users1.

Quality

  • In-app ads are scaled to fit the app, looking much more appealing than mobile web ads

  • 5G will open the era of high-definition media and interactive technologies

In-app Advertisement: User perspective


Younger audience are ok with ads if the content is free
They understand why brands use ads to inform the public about their product and services, especially if the app/content is free3.

Auto-play videos are the considered the most disruptive ad format
Auto-play videos, modals, anchored banners and loading time of ads are considered extremely frustrating and slow down the content navigation.

Irrelevant content is just... annoying
And does not add any value to the User. Social media advertisement proved that relevant content is extremely effective and Users actively engage with it4.

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Ad formats

There are two types of advertisement: Performance Ads and Display Ads.

Performance Ads are PCP (pay per click) and are organic products "boosted" normally by pushing them to the top of the results to offer Partners more visibility.

Display Ads are additional products that may or may not be related to what the User has searched.


These are the most common Ad formats displayed in the apps that have been 
analysed in this study.

Display Banner

Banners are the Ad format most familiar to Users. These are typically text and/or images displayed at the top or bottom, alongside the app content.


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Native IAB

Using the standard IAB sizes and the advertisers' branding, they incorporate native elements of the website where they are displayed.


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Native Ads

The least intrusive ad format. They are designed to match the look and feel of the app, and the offers tend to relate to the function of the app or target your interests.


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Interstitial Ads

Also called full-screen ads, they are images or videos shown during transitions in the app.


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Video Ads

Promotional clips, they tend to be engaging and have strong click-through rates. 


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Offer Wall, Playable Ads and Rewarded Ads​

A playable ad gives users a chance to briefly play a few minutes of another game they might like. Rewarded ads (like offer wall ads) incentivize users to watch a video, download, an app, or perform another action in exchange for in-game content.


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Market landscape & Benchmark analysis


Apps analysed in this study:

  • Social media
    Facebook, Instagram, LinkedIn

  • Retail
    ​Amazon, Ebay, Alibaba, Uber Eats, Waitrose, Asda

  • Entertainment
    YouTube, Spotify, Pinterest

  • Travel
    ​Tripadvisor, Kayak, Skyscanner, Make My Trip​

Not analysed in this study:

  • News
  • Gaming
  • Health & fitness

Ads-heavy, large use of standard display banners, irrelevant content.

  • Finance (eg. Personal banking)

Financial apps, such as Personal Banking, generally don't have ads, this is due to the highly sensitive content and personal data.
Although Partnerships are largely used.

Social Media

Average Ad exposure*

30%

Social media apps goal: Communication, content browsing

They show Ads related to content that the User interacted with (liked) or searched on browser.

Any Ad could be relevant because while using the app the User browse various type of content.

  • LinkedIn 40%

  • Facebook 30%
  • Instagram 20%

*Per page. It is referred to each section of the app (each tab) and the most commonly used.

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User Experience

Native Ads is the dominant format on home screens, perfectly integrated with the look and feel of the app.
LinkedIn also has Performance Ads in the "Jobs" section (respectively 2 organic - 2 sponsored jobs).

By selecting the Ads the User is taken to the advertiser's website through in-app browser modal, so will not leave the app.
The Performance Ads on LinkedIn lead the User to the Job description screen, same as per organic listings.

Good and Bad UX

Most of Social Media Users have at least made a purchase through one of the Ads displayed in their feed.
Advertisement in social Media is very effective and the target is almost perfect: in fact most of the ads are products/services that Users have been searching for on browser, so they are really interested in buying.

Although sometimes Users are targeted by ads which could be ethically offensive or misleading.
This is due to the huge amount of personal data that Users give to these apps (especially Facebook) when subscribing, so they might be targeted based on age, gender, location etc. Luckily the User is also able to report this content and choose to do not be exposed to similar content again. 

Entertainment

Average Ad exposure*

40%

Entertainment apps goal: Entertainment, content browsing

It's worth mentioning that these apps might be used "hands off".
This represents a very important aspect, especially when Ads are displayed and there might be occasions where the User is not able to touch the screen so cannot "skip" or "close" the ad, this might disrupt the User Experience.

Ads in these apps can be relevant and related to the User search (Pinterest) or random and irrelevant in most cases.

  • YouTube 50%

  • Pinterest 33%
  • Spotify 10%

*Per page. It is referred to each section of the app (each tab) and the most commonly used.

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User Experience

Native Ads is the dominant format, followed by IAB Display and Interstitial Ads.

Pinterest: fully Native
All Ads are Native, displayed into the app masonry tiles, perfectly UI integrated. The Ad content is very relevant to the User search.
When selecting the ad the User is taken to the advertiser's website through in-app browser modal.

YouTube: IAB & Native Ads
High Ad exposure and mix of formats. On the home screen prevalently IAB display, when launching a video 80% of the time a video ad (native) is shown. 
When selecting these Ads the User is taken out of the app, into web browser.

Spotify: Interstitial & Native Ads.
When launching the player the User is exposed to an interstitial ad, followed by a full screen video, then a native ad.
This process lasts about 1 minute, after that the User can enjoy 30 minutes of music.

Good & Bad UX

Pinterest Ad experience is generally good, considering that the app is mainly used as inspiration board for projects it is really good to see where you can buy the items you are looking for.

Advertisement which block the customer experience and does not allow the User to take any action is BAD UX.
YouTube UX can be really frustrating, especially because this app is used "hands off" most of the time. Sometimes the User cannot skip Ads, other times there are two video ads one after the other.
Once I was painting my room and I could not touch the screen to "skip" the video ad: I had to listen to a guy telling me how to make Billions by setting up my e-commerce site for 3 minutes... and it wasn't even finished. Well, I had to remove my gloves, exit the mobile app, open the laptop and turn on Ad-blocker

Retail

Average Ad exposure*

30%

Retail apps goal: Goods purchase

Users use these apps to purchase physical products.

There's a big difference in Ad exposure between traditional retailers and online only retailers: traditional retailers also own physical shops and their margin on products is much higher already.

  • Amazon 45%

  • Ebay 40%
  • Alibaba 20%

  • Waitrose 5%

  • Asda 5%

  • Uber Eats 3%

*Per page. It is referred to each section of the app (each tab) and the most commonly used.

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User Experience

Performance Ads is the dominant format, followed by Native.

Users are not simply browsing content on these apps, they are focused on making a purchase.
For this reason Standard Display banners are not largely used because they would distract customers from their primary goal and take them to an external website.

Performance Ads are a smart way of advertising in this context, by providing sponsored product similar to what the customer is looking for there is  higher chance of conversion.

By selecting Performance Ads the User reach the "product details screen" exactly like any other product which is not "sponsored".

The curious case of Amazon

Amazon is the biggest online retailer and has a huge brand portfolio in continue expansion. 
When using Amazon's apps Users often come across several x-sell products and advertisement without even noticing: brands and products don't have to be explicitly marked as an "advertisement" because they are owned by Amazon. 

Travel

Average Ad exposure*

25%

Travel apps goal: Plan & book travel

Travel apps provide all Users need to plan and book a travel: inspiration, information, transportation and hotels prices.

  • Amazon 45%

  • Ebay 40%
  • Alibaba 20%

  • Waitrose 5%

  • Asda 5%

  • Uber Eats 3%

*Per page. It is referred to each section of the app (each tab) and the most commonly used.

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User Experience

Performance Ads is the dominant format, followed by Native.

Users are not simply browsing content on these apps, they are focused on making a purchase.
For this reason Standard Display banners are not largely used because they would distract customers from their primary goal and take them to an external website.

Performance Ads are a smart way of advertising in this context, by providing sponsored product similar to what the customer is looking for there is  higher chance of conversion.

By selecting Performance Ads the User reach the "product details screen" exactly like any other product which is not "sponsored".

The curious case of Amazon

Amazon is the biggest online retailer and has a huge brand portfolio in continue expansion. 
When using Amazon's apps Users often come across several x-sell products and advertisement without even noticing: brands and products don't have to be explicitly marked as an "advertisement" because they are owned by Amazon.