Dickey Singh on August 10, 2016
Over the last few days, Adblock Plus and Facebook have been outdoing each other in a game that The Register summarized as “Adblock Plus blocks Facebook block of Adblock Plus block of Facebook block of AdBlock Plus block of Facebook ads.”
Adblock Plus has been urging its users to continue updating filters to block ads as Facebook continues to update its scripts to make the Facebook ad blocks irrelevant.
Ad blocking and Mobile
Although the Adblock Plus blocking Facebook Ads is limited to desktop, mobile ad blocking is on a considerable rise as reported by Mary Meeker earlier in the year.
How does the rise of mobile ad-blocking affect in-app advertising and what options do app publisher have? But first, let’s look at where in-app advertising is in 2016.
WITH RISING AD BLOCKER ON MOBILE, WHAT OPTIONS DO APP PUBLISHERS HAVE IN 2016?
In-app advertising is the second largest mobile revenue generator after In-App purchases and growing steadily with app usage. Mobile advertising grew to $21B up by 66%, per Mary Meeker’s 2016 report and expected to grow to $35B in next few years. In-App advertising is a significant monetization factor for mobile apps. Further over 90% of mobile usage is now in-app up from 80% just a few years ago.
MOBILE ADVERTISING HAS GROWN TO $21B
Undesirable vs. Effective Ads
Users are not opposed to advertising in general. Think Super Bowl and fashion magazines with tasteful ads. We love ads that are creative and evoke an emotion.
So what makes ads undesirable?
- Users detest ads that take up bandwidth and slow them down.
- Forcing a video ad to a user with a very slow connection is sure to create a bad experience.
- Video advertising with sound in mobile apps may be ineffective, as over 80% mute video ads.
- Ads that popup at unexpected places are considered undesirable. Over 60% put off by brand forcing pre-roll viewing.
- Showing ads for items that the user already owns do not want can have a significant negative outcome.
Ads that are meaningful, memorable, can be easily recalled, and capture the consumers interest with an exciting benefit for them, can be quite effective.
- App users may not mind banner ads that do not interfere with the functionality of the app.
- Interstitials, or full screen ads, at the right time can be a very powerful driver for monetization since they can yield 5–10 times the per-click revenue as banner ads.
- Often Interstitial ads displayed at app exit, after a user completes a level or perhaps after every 5 levels have proven to be successful.
- Video Advertising in mobile apps is effective when showing authentic, entertaining, emotion evoking and personal or relatable content.
- Users may prefer video ads that work with sound turned off.
- Snapchat uses vertical videos in full screen mode and has been highly successful.
- Rewarding users with In-App credits in return for watching a video add is also successful in gaming apps.
- Targeting users is important for users too. A Nikon Digital SLR camera body user, for instance does not to see ads for Canon SLR lenses. Apple recently changed Apple Store app to show ads and suggestions for apps based on apps people own.
- Ads must be latency-sensitive to avoid showing rich ads to people with low bandwidth connections.
- Ads must be compatible with device. It does not make sense to show banner ads designed for iPhones on iPad Pro for instance.
Ad-blockers on Mobile
An increasing number of people aren’t satisfied with the online ad experiences and are opting for ad-blocking on mobile.
Approximately 22% of the 2 Billion global smartphone users block ads served on mobile. The prominent ad blocking way is via adoption of ad-blocking browsers (e.g. adblockbrowser.org) which are attracting mass adoption in emerging markets. Safari content blocking extensions introduced in iOS 9 can filter advertising content from a list of domains (Ad block Plus iOS app). Firefox and Opera Mini browsers provide opt-in browser blocking. Apps relying on VPN and HTTP proxy configurations are available to block third-party ads in other apps, such as Spotify or CNN.
Unless there is a focus on creating latency-sensitive and effective ads that do not spoil the consumer experience, ad blockers will continue becoming popular. App marketers should improve the quality of ads, so users don’t need ad blockers by taking users needs, latency, connectivity and geography into account when serving ads.
What should App publishers do?
APP PUBLISHERS ARE ALREADY SIDESTEPPING AD-BLOCKERS WITH SPONSORSHIPS, SELF-PROMOTIONS AND AFFILIATIONS, BUT ADDRESSING KEY REASONS WHY USERS ARE OPTING FOR AD BLOCKERS NEEDS TO BE ADDRESSED HEAD ON.
App publishers should work with ad providers that are sensitive to user connectivity, culture, latency and geography. Studies have shown that users are much more responsive to personalized and relevant ads.
App publishers should also consider alternatives:
- Let users pay for your apps.
- Consider In-App Purchases. In-app purchases is the largest revenue generator for apps.
- Direct sponsorships have been effective, very similar to Nike placing ads directly in the Weather Channel mobile app, offering suggestions for weather apparel based on local weather conditions. Similarly, sponsored content in social and news feeds are effective.
- Partnerships between apps promoting each other bypasses blocked ad-networks. For example, Uber and Pandora partnered recently to allow uber drivers to play Pandora music playlists.
- House-ads or self-promotions are effectively being used to promote apps and in-app purchases in the app-publishers portfolio.
- Direct affiliations between app publishers with service providers can be useful to both users, app publisher and service provider. For example, The Nikon Lenses app for photographers can have an affiliation with borrow lenses to rent camera equipment.