The growth rate of the mobile app industry is truly unprecedented. People are increasingly buying more via their smartphones and spending more of their time with mobile apps compared to mobile web, desktop and tablet usage.

To meet these growing trends, savvy advertisers are allocating more and more ad budgets to where consumers’ eyes are most focused. Many are quickly realizing that some of the most valuable ad inventory can be purchased within Android and iOS mobile apps.

Due to this expanding realization, international mobile ad spend is actually predicted to reach a whopping $220 billion by 2024.

However, with mobile consumers’ growing propensity for world-class mobile app experiences, in-app advertising is also in a rapid state of transformation. Advertisers and app publishers are currently shifting their strategies in order to keep exceptional user experiences in mind.

While Apple claims that in-app ad monetization has generated relatively small revenue on their end (we’re talking about a brand commonly thought to be worth $1+ trillion) – most mobile insiders remain committed to the idea that in-app advertising holds more powerful potential than ever before.

Many are even affirming that the future of in-app advertising lies in the mobile video ad format.

In fact, smartphone video views are up 55% and tablet views up 48%, both surpassing PC and laptop views, which are up 34% year-over-year per new research from Yahoo. Let’s explore the reasons behind mobile video ads’ surge in popularity.

The Choice Rich Media Across All Mobile Formats

Possibly the greatest reason as to why video ads are so compelling is due to the fact that many mobile users give video ads their undivided attention – at least temporarily.

“Rich media” is an all-encompassing term that can refer to any display ad utilizing dynamic features like video, audio or other interactive formats (like floating or interstitial creatives). While rich media ads are often extremely effective, video ads are the specific ad format of choice that mobile marketers, developers and start-up team leads must pay close attention to.

Mobile video ads are also a great way to appeal to Generation Z, who are more engaged with technology as a whole than any other generation in the past. They are also more likely to interact with image and video-based media than any other form of content, and they aren’t averse to advertising, as long as the ads are relevant to their interests.

For example, let’s take a look at the Royal Caribbean cruise line brand. Royal Caribbean recently launched an ad campaign that included a series of mobile rich media and video ads which truly excited and intrigued consumers. The Royal Caribbean’s video ads were so engaging that they commanded the attention of millions of mobile users (autoplay video ad features certainly helped with this). This is an example of the strong, potential efficacy video ads can pose for mobile advertisers and marketers.

https://www.youtube.com/watch?v=qvuenTpNStg

Effective Option for In-App Monetization

As more high-powered marketing teams turn to the mobile video ad formats, it’s becoming even more apparent that placing a single, well-done “pattern interrupter” video ad within your app can generate astonishing ad revenue.

Interestingly enough, in-app video ads have proven to be especially effective for game publishers, with average in-game video ad completion rates of over 95%.

While many app marketers have long believed that in-app advertising can hurt user engagement or even diminish the quality of your brand, this tends to be exaggerated. It’s only logical to keep all available avenues for app monetization open for consideration, and believe it or not, in-app advertising can be one of your most fruitful options. Specifically, high-quality video ads that provide social game users with in-game rewards can even encourage up to 2.5x more active engagement.

We all know how difficult achieving active engagement can be. Getting users to consistently engage with your mobile app is one of the greatest ways to develop strong bonds with your audience and ultimately increase user retention. Is it that far-fetched to correlate effective in-app advertising strategies with stronger user experiences and greater overall revenue earned? No it isn’t.

For example, the soccer game app Score! World Goals provides users with the option to earn in-game credits by watching rewarded video ads. These credits can be allocated towards purchasing “Golden Shots,” which allow users to skip out on levels with difficult playability. Additionally, the actual placement of video ads within Score! is perhaps what’s most interesting. The app’s in-game rewarded view screen is extremely user friendly, and also allows users to access rewarded videos from outside of the game as well (from the main menu).

 

Source: chartboost.com
Source: chartboost.com

 

More Sophisticated Video Ad Pricing Models

There are even additional, more sophisticated pricing models that can be paired with your in-app video advertising strategy. Cost per thousand views (CPMV) enables advertisers to pay app publishers only when their video ads are successfully viewed by users. Cost per completed view (CPCV) creates even more incentive for in-app advertisers, allowing them to pay app publishers only when their video ad units are watched until the very end. While these newer pricing models might sound like a one-sided win for advertisers, they also encourage app publishers to work with premium brands that commit to creating high-quality video ads – ultimately providing for a greater overall user experience. CPMV and CPCV pricing models can be a win-win for everyone.

Wrap Up

Global advertising trends are quite clear in indicating that there is a growing demand for better-placed ad units, more engaging ad creatives, and greater user experiences within mobile apps.

In-app video advertising is certainly fulfilling these demands as the hottest ad format in mobile advertising today. Marketers, developers and industry professionals can leverage these trends to their own benefit by closely monitoring and assessing how their video ad units are performing within their apps.

Yet, with all ads, it’s important to monitor and optimize. Appsee’s UX app analytics is an easy and effective solution that gives you actionable insights into your customers’ POV. Through Appsee’s user recordings feature, you will be able to see with your own eyes the kinds of ads that your ad network(s) of choice is displaying within your app. You can then continue to monitor your users’ unique behavior and journeys throughout your mobile app, and track your retention analytics to determine how your in-app video ad units are potentially impacting your overall user experience.

Video ads might be the hottest advertising opportunity on the market, but they still have to be carefully tracked and analyzed to ensure that your app is delivering the greatest user experience it can provide. Whether you’re the owner of a mobile game or a mobile brand, you can be sure that using mobile video ads to target your audience of choice will greatly enhance your monetization efforts all the while maintaining a strong UX.