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Forrester Study: Apps Have Consumer Attention, But In-App Ads Have a Long Way to Go

Written on
Oct 8, 2013 
Author
Richard L. Tso  |

ADOTAS – The mobile ad industry has gotten a bad rap as of late, with publishers struggling to deliver ads in just the right way without annoying consumers. It’s a delicate balance – inserting marketing messages into tiny ad units without completely overtaking the mobile experience. Emerging native ad solutions may be helping the cause of marketers and publishers looking to capture attention and drive online traffic.

According to a new Forrester study released this week “Exploring the In-App Advertising Opportunity,” almost half (47%) of U.S. smartphone users ignore in-app ads and 43% find them disruptive. But without ads, how else will all those free apps make any money to support ongoing development? Especially since only 25 percent of smartphone owners and 21 percent of tablet owners would rather pay for apps than see ads. The consensus points to the undeniable fact that mobile ad models need to adapt if they are to survive.

As smartphones and tablets sales continue to surge, customer attention
is increasingly shifting to these devices. As reported by the North American Technographics Consumer Deep Dive, by the end of 2012, more than three-quarters of US online adult smartphone owners used their devices online daily — with 56% doing so multiple times
a day. Marketers are taking note of this and boosting their investments in mobile, including budgets for in-app advertising, which is expected to reach $7 billion by 2015.

The research by Forrester indicates that people are indeed noticing in-app ads, with 37 percent of respondents recalling ads for a particular brand or product. On the flip side, nearly half of these same individuals are finding the ads disruptive – 43 percent in fact, while 47 percent citing they simply end up ignoring them. Ad desensitization has long been a problem for the industry with many simply building more and more distracting ads that demand attention. But this brute force approach may be hurting consumer attention and the industry in the long run.

The report concluded that marketers are not building ads carefully enough to suit the smaller smartphone screen and appeal to the task-oriented mindset of on-the-go consumers. In the study there are only a handful of companies that are doing mobile advertising right by building for mobile first. Here are the ones highlighted in the study:

  • TapJoy: Offers incentive-based model for brand interaction.
  • Appssavvy: Identifies intuitive and natural breaks or actions within the app to act as triggers for ads.
  • Kiip: Rewards users during moments of achievements when using the app.
  • Zumobi: Creates native mobile experiences for brands like Chevrolet and American Express.
  • Millennial Media: Identifies more than 150 unique audience segments based on demographic information.

While mobile advertising is still in its formative stages, it’s certainly not going away anytime soon. Brands have become a normal part of our everyday lives and online advertising should be approached in the same way. The winners will be those who are able to integrate advertising seamlessly into experiences and content, overcoming the pitfalls of ad overexposure and desensitization.





Richard L. Tso is a reporter for Adotas and an avid writer covering the intersection of technology and advertising, fashion and music. With over 12 years of experience in the Advertising, Marketing and Public Relations industries, Richard has held executive positions at global agencies and technology companies and is founder of the interactive communications firm Pseudosound Consulting LLC. A classical cellist and painter, he believes that sometimes sound carries more weight than words. He is a graduate of Stanford University.

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