Mobile Advertising

What is Mobile Advertising and How Does it Work?

The realm of advertising has undergone a transformative evolution alongside advancements in technology. Presently, mobile advertising has emerged as the focal point, heralding an era of unparalleled effectiveness in reaching potential customers.

As per the Internet Advertising Bureau's (IAB) report on internet advertising revenue, mobile advertising accounted for a substantial 65.1% of the total revenue generated through internet advertising. This statistic showcases the dominant presence and impact of mobile devices in the advertising landscape.

Furthermore, the IAB's report reveals a remarkable growth in mobile advertising revenues, with a significant 24% increase observed. This surge reaffirms the enduring upward trajectory of mobile advertising, reinforcing its position as a lucrative avenue for businesses to connect with their target audience.

In today's digitally interconnected world, where consumers are constantly immersed in online experiences, a successful advertising campaign must prioritize its mobile phone-using audience. However, it is crucial to recognize that mobile advertising represents a distinct realm that diverges significantly from traditional advertising concepts.

Modern marketers employ an extensive array of advanced techniques to craft mobile ads that are user-friendly, thereby elevating brand recognition and fostering increased revenue generation. 

This comprehensive article serves as a comprehensive guide, addressing all pertinent inquiries related to mobile advertising. It explores the myriad advantages, diverse types, key steps involved in designing a successful campaign, effective strategies, and associated costs. By delving into this resource, you will gain valuable insights into maximizing the potential of mobile advertising and harnessing its benefits to propel your brand forward.

About Mobile Advertising and its Benefits

Mobile ads have emerged as a compelling solution in the advertising realm, catering to a consumer world that is increasingly captivated by their phone screens and mobile devices. Simply put, mobile advertising refers to the techniques used to promote products or services on smartphones.

These ads can take various forms, including text-based ads, banner advertisements, videos, and even mobile games. Due to the limited screen size of mobile devices, the advertisements are skillfully optimized to fit within a smaller display area.

Mobile advertising is an integral component of mobile marketing, employing traditional techniques and strategies to gather valuable data such as consumer profiles, demographics, habits, and preferences.

Rather than relying on physical mediums like posters and banners to reach target markets, mobile advertising capitalizes on the widespread popularity of smartphones. This innovative approach has revolutionized marketing campaigns, yielding a host of reported benefits. These include heightened customer engagement rates, cost-effectiveness, personalized consumer relationships, and compatibility with social media platforms.

In a world where the number of mobile subscriptions surpasses the human population, it would be unfathomable not to center your marketing efforts around this pervasive phenomenon. Embracing mobile advertising is a logical and essential step in staying ahead of the game.

Current mobile advertising trends

The prevalence of encountering online promotional advertisements while using various online applications has become a commonplace occurrence. Consequently, consumers have come to anticipate these ads, and their responses to such advertisements are steadily increasing.

According to the Interactive Advertising Bureau (IAB), mobile advertising has witnessed an impressive growth surge of 65%. Subsequently, this growth trend continued, with a substantial 24% increase recorded. These statistics clearly demonstrate the continuous expansion of mobile advertising, as its influence and reach expand with each passing day.

Furthermore, a report from Emarketer reveals that worldwide digital ad spending is projected to experience a significant 17.6% increase, reaching a staggering $333.25 billion. This marks a milestone moment, as digital advertising is expected to account for approximately half of the global ad market for the first time.

These figures emphasize the growing significance of digital and mobile advertising in the advertising landscape, highlighting the need for businesses to adapt their marketing strategies to this shifting paradigm.

As per another IAB Internet Advertising Revenue Report for the US, mobile devices played a pivotal role in driving the steady growth of digital marketing. The report highlights that mobile advertising made a significant contribution, accounting for approximately two-thirds (65%) of the total internet advertising revenues for that year. Furthermore, the revenue generated from mobile advertising experienced substantial growth, increasing by an impressive 40%.

Furthermore, an article featured on Ad Age underscores the remarkable performance of digital advertising. The article reports that digital advertising achieved another record-breaking year, with ad revenue reaching a remarkable $88 billion. This figure represents a substantial 21% upswing from the previous year, demonstrating the continued upward trajectory and immense potential of the digital advertising industry.

These reports and statistics serve as a testament to the ever-increasing significance and impact of digital and mobile advertising, highlighting the immense opportunities they present for businesses and marketers alike.

Mobile advertising basics- Things you need to know

So what are the basics that you need to know before you step into the amazing, yet ever-changing world of mobile advertising?

In the rapidly evolving landscape of advertising, programmatic advertising has emerged as the prevailing trend, with the digital realm becoming the primary focus. Familiarize yourself with the following key terminologies associated with programmatic advertising:

1. Demand Side Platform (DSP): Also known as a "buy-side optimizer" or "buy-side platform," a DSP is a digital tool that facilitates centralized and aggregated media buying from multiple sources. It encompasses real-time bidding capabilities across various sources.

2. Real-Time Bidding (RTB): This method involves the buying and selling of ad inventories in real time, allowing advertisers to bid on available ad space instantaneously.

3. Ad Exchange: Ad exchanges serve as the sales channels for purchasing and selling online media advertising inventories. They provide a modernized approach to the traditional manual price negotiation techniques used in bidding.

4. Ad Network: Referring to organizations that outsource sales services for publishers, ad networks play a pivotal role in sifting through ad inventories from various sources and generating buying opportunities for advertisers.

5. Supply Side Platform (SSP): SSPs act as exchange platforms for publishers seeking to sell their ad inventory to advertisers. They are also known as "sell-side optimizers," "inventory aggregators," or "yield optimizers."

6. Agency Trading Desk (ATD): An ATD represents a specialized department within an advertising agency that facilitates the purchase of ad inventory on behalf of clients, streamlining the process for efficient and effective ad placements.

Now must be able to navigate the intricacies of programmatic advertising and embrace its transformative capabilities in the digital advertising landscape.

Understanding the different mobile platforms available for targeting your ads is crucial for successful mobile advertising campaigns. Here are two types of mobile platforms commonly used:

1. Mobile Web: Mobile web refers to web pages optimized to fit mobile screen sizes, including smartphones and tablets. With a larger number of users accessing the internet through mobile devices rather than desktops, the mobile web offers a wider reach to the target audience. Modern ad formats, such as video ads and rich media versions, provide enhanced ad experiences on mobile web platforms.

2. In-App: Mobile apps have become an integral part of our lives, making app advertising an essential strategy for marketers. In-app advertising allows you to promote your products or services within mobile applications. Apps are easy to download, and navigate, and are highly preferred by present-day mobile users. In-app advertisements are specifically designed to target user behavior and preferences, delivering an optimal browsing experience. Selecting the right apps and utilizing compelling creatives is key to effective in-app advertising.

It's important to note that ad formats, as discussed in subsequent sections, depend on the chosen platform. By understanding the distinct advantages and considerations of mobile web and in-app advertising, you can make informed decisions about where to place your ads for maximum impact and engagement.

When it comes to mobile ad campaign payments, various currency terminologies are utilized. Here are the key payment models commonly used:

1. Pay Per Click (PPC) or Cost per Click (CPC): Under this model, payments are made based on the number of times the ad is clicked by users. It provides advertisers with direct feedback on the effectiveness of their ads.

2. Cost per Impression (CPI): Payments are made for every new ad view or impression, regardless of whether the user takes any action. It is a common model for brand awareness campaigns.

3. Cost per Action (CPA): With CPA, payments are made for specific actions completed by users, such as making a purchase or filling out a form. Advertisers only pay when desired actions are achieved.

4. Cost per View (CPV): This model involves payments every time an advertisement is viewed or displayed to a user, usually in video advertising.

5. Click-Through Rate (CTR): CTR refers to the percentage of users who click on a particular link or ad. It is a valuable metric for measuring the effectiveness and engagement of an ad campaign.

6. Cost per Mile (CPM): CPM signifies the payment for every thousand ad views or impressions. It is a widely used model in display advertising campaigns.

Additionally, certain performance metrics are commonly used to measure the success of mobile ad campaigns:

- Conversion Rate (CR): CR represents the percentage of users who take the desired action, such as making a purchase or subscribing to a service, after viewing an ad.

- Install Rate (IR): IR denotes the percentage of users who install a mobile application after being exposed to an ad.

Understanding these currency terminologies and performance metrics allows advertisers to align their objectives with the appropriate payment models and assess the effectiveness of their mobile advertising campaigns.

Advantages of mobile advertising

What makes mobile advertising so effective?

Markets are constantly expanding. New business ventures and entrepreneurs are looking for options to leverage this amazing opportunity.  Following are some of the key benefits of mobile advertising:

Accessible: In today's digital landscape, social media platforms and mobile apps have become the predominant channels for communication. People dedicate significant time to updating and engaging with these apps. Therefore, it is crucial to connect with consumers directly, and mobile advertising offers an ideal solution. 

By reaching out to users on their cell phones, you can leverage the accessibility benefits of mobile advertising, ensuring that your ad campaigns are instantly delivered and easily accessed by your target audience. This direct and instant access maximizes the effectiveness and impact of your advertising efforts, enabling you to engage with consumers in a timely and convenient manner.

Geo-targeting: Harnessing the fact that people carry their cell phones with them wherever they go, marketers and advertisers can capitalize on this knowledge to deliver location-based, geo-targeted advertisements. Location-based mobile advertising presents a powerful opportunity to analyze consumer preferences and habits, such as their favored shopping destinations and frequented areas. 

For instance, when a shopper in a particular locality receives an advertisement about an ongoing sale at a nearby store, the likelihood of them visiting that store significantly increases. 

By tailoring ads based on a user's location, marketers can effectively target their audience, increase engagement, and drive foot traffic to relevant businesses or events. This strategic approach to mobile advertising maximizes the chances of capturing the attention and interest of potential customers, leading to increased conversions and customer satisfaction.

Understanding consumer habits: Mobile devices possess unique IDs that allow for the study of offline and online habits of target consumers. This invaluable data aids in the development of effective marketing campaigns by tailoring them to specific consumer behaviors.

Cost efficiency: Mobile advertising stands as one of the most cost-efficient methods to reach target customers. Compared to TV or radio ads, designing a mobile advertising campaign incurs significantly lower costs. Marketers can leverage this affordability to increase message frequency and repeatedly target new customers without straining their budget.

Personalized advertising: Mobile advertisements excel in tailoring marketing campaigns to the preferences of mobile users. Customers have the ability to engage with their favorite brands through social platforms, providing feedback, and suggestions, and building personalized connections.

Plethora of creative options: Mobile advertising seamlessly integrates with social media channels, websites, and apps, offering a wide array of creative possibilities. With strong visual appeal and instant outreach, mobile ads leave a lasting impression on the target audience, capturing their attention effectively.

Fraud resistance: Mobile advertising exhibits higher fraud resistance compared to desktop advertising. Verification of "Click to calls" and usage is more straightforward, facilitating improved fraud detection.

Instant results: Cell phone users carry their devices wherever they go, increasing the likelihood of ad visibility compared to desktop or traditional advertising methods. Moreover, user responses can be tracked instantly, allowing for real-time assessment of campaign effectiveness.

Higher conversion rates: Smartphone-based ads, clicks, spending, and conversions demonstrate the highest growth rates when compared to desktops or tablets. Mobile advertising has proven to be highly effective in driving conversions and achieving desired outcomes.

Interactive: Mobile advertising offers interactivity through features like contests and games. People enjoy participating in engaging advertisements, and the use of gamification and interactive elements further enhance the mobile advertising experience.

Mobile advertising vs mobile marketing

While mobile advertising and mobile marketing are often used interchangeably, they differ in their applications and scope. Mobile marketing serves as the broader term, encompassing various services and data-driven strategies such as location-based services, buyer personas, user preferences, and more.

Within mobile marketing, certain mobile ads are designed to appear when users enter specific geographically marked boundaries. This targeted approach allows for a more precise and relevant advertising experience.

On the other hand, mobile ad placement operates through programmatic bidding, where marketers and advertisers engage in real-time bidding to secure ad placement on mobile devices. This process involves the utilization of demand-side platforms (DSPs), which enable advertisers to measure and optimize their performance. Key performance indicators (KPIs) such as Cost Per Click (CPC), Cost Per Acquisition (CPA), and others are utilized to gauge and improve ad performance.

In essence, while mobile marketing encompasses a broader range of strategies and data-driven techniques, mobile advertising specifically focuses on the placement and delivery of ads on mobile devices. The symbiotic relationship between the two facilitates effective targeting, optimization, and performance measurement for mobile ad campaigns.

Types of Mobile Advertising

Mobile ads come in various forms and platforms, and marketers utilize different mobile advertising solutions based on their sector and overall strategy. Each social media platform operates differently in terms of mobile advertising techniques and effectiveness.

To effectively leverage mobile advertising, it is crucial to explore and consider the different types of mobile advertising options available. Evaluating these options in alignment with the goals of the advertisement helps determine the most suitable approach. By carefully selecting the appropriate mobile advertising techniques, marketers can optimize their reach, engagement, and overall campaign success.

Understanding the diverse range of mobile advertising options and their compatibility with specific goals empowers marketers to make informed decisions, ensuring their campaigns effectively resonate with their target audience and achieve desired outcomes.

Following is a list of the most commonly used mobile advertising formats. 

1. Banner Advertising:

Banner ads represent one of the earliest forms of mobile advertising, originating from web marketing practices. Despite the rise of interactive rich media ads, banner advertisements have managed to retain their popularity and relevance in the digital landscape.

Typically, banner ads are embedded within web host pages or mobile applications. They often consist of visually appealing images or graphics accompanied by text, strategically designed to capture the attention of consumers. The primary goal is to entice customers to click on the ad, redirecting them to the advertiser's page and ultimately converting them into paying clients.

The effectiveness of banner ads heavily relies on vibrant colors, high-quality graphics, and compelling "Call to Action" buttons, all aimed at maximizing customer engagement. The more visually appealing the banner ad, the greater the customer response.

Although banner ads continue to be cost-efficient and widely utilized, the industry is rapidly embracing other modern options such as gamification ads and video ads (described below). However, it is important to note that banner ads still maintain their relevance, remaining in demand and playing a significant role in mobile advertising campaigns.

2. Video Advertising:

According to a report from Business Insider, social video advertising spend more than doubled in 2017, surpassing $4 billion. These figures alone reflect the significant impact and potential of video advertising as a powerful communication tool for achieving desired conversion figures.

Video advertising proves highly effective in aiding customers during their decision-making process, particularly through product videos. Such videos provide users with a comprehensive visual experience, enabling them to gain a closer understanding and feel for the featured products.

A substantial percentage of consumers prefer watching videos on their mobile phones, with mobile viewing surpassing the impact and conversion rates of video ads on television. Advertisers and marketers utilize various techniques to display video ads on mobile devices, including optimizing YouTube ads, incorporating shopping ads beneath the main video content, and employing sponsored advertisements at the beginning of video content.

To create mobile video advertisements that generate a good return on investment (ROI), consider the following essential tips:

1. Keep it simple: Simplicity is key to ensuring clarity and effective communication.

2. Utilize creativity: Employ creative elements to captivate and engage viewers, making your ad stand out.

3. Keep it short and crisp: Opt for concise video durations to maintain viewer attention and deliver a clear message efficiently.

4. Balance audio and visuals: Ensure that audio and visuals are balanced, avoiding excessively loud or overwhelming elements.

5. Display a call to action: Prompt viewers to take action by including a clear call to action, guiding them towards the desired next steps.

By adhering to these guidelines, marketers can create compelling mobile video advertisements that not only resonate with their target audience but also yield positive returns on their investment.

3. Full-Screen or Interstitial Mobile Advertising:

Interstitial mobile advertisements refer to full-screen videos or graphics strategically placed at app transition points. For instance, while playing a video game, as you progress to the next level, you may encounter an image or a short video ad. These are examples of interstitial mobile ads.

Compared to banner ads, interstitial ads tend to achieve higher click-through rates. However, it is crucial to adhere to a specific rule when utilizing interstitial ads – they should only appear at interval points that do not disrupt the user's activity flow during the content transition.

Interstitial ads can take the form of text, graphics, or rich media. Importantly, users are typically provided with an option to close the advertisement by clicking the X button, usually located in the top right corner.

Due to occupying the full screen or a significant portion of it, interstitial ads effectively capture consumer attention. This large visual presence contributes to their ability to engage users and convey impactful brand messaging.

By strategically incorporating interstitial mobile ads at appropriate moments in the user experience, advertisers can maximize their impact and successfully captivate the target audience.

4. Native App-Based Advertising:

Native app-based advertising shares similarities with banners, but they are integrated within the app's natural environment and seamlessly blend in with the overall flow, unlike traditional ads that are treated as separate advertisement content.

Being embedded within the mobile environment provides native ads with a distinct advantage - they cannot be easily blocked. This ensures that targeted users receive advertisements without disruptive interruptions. Native ads adopt the appearance, buttons, and design elements consistent with other components of the app, creating a cohesive user experience.

To create high-quality native mobile ads, consider incorporating the following key ingredients:

1. Headline: Craft a compelling headline that captures attention and piques interest.

2. Crisp description: Provide a concise and engaging description that clearly communicates the value proposition.

3. Brand logo or name: Display the brand logo or name to reinforce brand identity and recognition.

4. URL: Include a URL for users to find more information or visit the advertiser's website.

A notable example of native mobile advertising is Facebook ads. As users scroll through their page or news feed, they encounter ads seamlessly integrated between two news pieces, maintaining the overall flow of content.

By leveraging native app-based advertising, marketers can deliver targeted ads that seamlessly blend into the mobile environment, enhancing user experience and engagement.

5. Gamified Mobile Advertising:

Gamified mobile advertising involves interactive video or rich media advertisements designed to create engaging and interactive channels for advertising purposes. Savvy marketers often leverage gamification as a strategy to captivate their audience.

Games provide a natural platform to generate user interest, making gamified mobile ads particularly effective when promoting gaming or problem-solving apps. For instance, short and quick gaming videos that allow users to test the app's functionality work exceptionally well as advertisements, especially for apps centered around map directions or problem-solving.

Gamified mobile advertising not only engages customers at a basic level but also collects valuable user data, such as consumer profiles. As game-based learning gains recognition as a highly effective educational approach across sectors, gamification-based ads yield high conversion rates by successfully capturing user attention.

When immersed in a challenging game, potential consumers are more likely to spend extended periods, typically ten seconds or more, on the advertisement, increasing the chances of conveying the intended message and influencing their purchasing decisions.

A noteworthy key point to consider is that according to IAB's internet advertising revenue reports, all digital ad formats, including both mobile and desktop, demonstrated significant growth:

- Search: Total search ad revenue increased by 19% to $22.8 billion.

- Banner: Total banner advertising experienced a 27% growth, reaching $15.7 billion.

- Video: Total video advertising revenue saw a substantial 35% increase, reaching $7 billion.

These figures reflect the growing importance and effectiveness of various digital ad formats in capturing audience attention and driving business outcomes.