Monetization of apps is a critical part of any developer's plan, but it's not always an easy path.
Barriers to user acquisition like paid app downloads or subscription models have a significant impact on the potential growth of a user base.
In fact, the amount that most people are willing to pay for an app is $0. It's hard to build a business with customers who don't want to pay anything. Of course, this changes once someone has had a positive experience with an app, which has driven the rise in popularity of the “freemium” model, but it also has most developers looking towards advertising as the solution.
Still, 76% of app revenue is from advertising, but with so many ad formats available, the question is: which one is the most effective? Well, in-app programmatic advertising has some serious advantages that are worth considering.
Programmatic advertising is powered by hard data
Cookies are cool, but there's a lot of room for error and inaccuracy in targeting. Programmatic relies on SDKs to collect device identifiers, which provide the entire foundation for this ad format. These identifiers are consistent and will persist through every stage of the user's journey from targeting to conversion and this provides a level of accuracy that other ad formats simply can't compete with.
Beyond this, in-app SDKs collect a huge amount of data from the app, user activity, and even from the mobile device itself. This provides insight on location, impressions, and a whole array of information that advertisers can leverage.
Enhanced engagement at scale
Data on individual users is effective, but big data on many users is a powerful advantage for advertisers. Programmatic advertising provides insight on the micro level, but when an effective formula is discovered, advertisers can zoom out to the macro level and run campaigns that respond to trends in user behavior.
This is important for developers to understand because an app can't generate real ad revenue without successful scaling of campaigns as the amount of revenue garnered from one ad is almost laughable, but if you multiply that by 100,000,000, then you have a business model that you can successfully build an app upon.
Real-time optimization opportunity
Where there is data, there is an opportunity.
Programmatic provides oversight on campaigns that is simply not available with other ad formats. Segmentation is easier and it's possible to optimize creative content in real time based on in-depth insight provided by an ocean of data. This allows advertisers to target more effectively, which means that the programmatic advertising ecosystem is more appealing to them.
The more effective and the greater the opportunity that in-app advertising provides, the more attractive your app will be to large mobile advertising networks. This is absolutely key because without any advertisers, then you won’t be generating any revenue at all.