The following is an exclusive guest contributed post from Maggie Mesa, VP of Mobile Business Development, at OpenX.
Banner ads deserve credit as the early monetization workhorses of mobile apps. They’ve offered both familiarity and immediate scale—two attractive benefits for brands that are tiptoeing into a new area of mobile marketing.
While banners serve their own purpose and can provide excellent branding opportunities for marketers trying to increase their overall mobile presence, the need to engage users and improve stickiness calls for developers to expand their strategy.
As the in-app market matures and users change the ways they interact with apps, and even advertising as a whole, taking advantage of new ad formats to supplement existing monetization strategies is important factor in preserving the user experience and elevating the likeability of an app.
Looking beyond the static banner
Today many of the new formats appearing in apps include seamless alternatives like full-page interstitials and video ads, which are proving to be more engaging and memorable than banners.
Notably, embracing these new formats comes with a learning curve powered in part by data science. Publishers and app developers must assess performance metrics to understand which ads are most effective for their audiences. Likewise, advertisers must experiment with how to define a successful campaign using newer formats for the medium, like video.
As this period of learning continues, there’s growing interest in banners, interstitials and video ads that become even more powerful with the help of a protocol developed by the IAB called MRAID, which stands for Mobile Rich Media Ad Interface Definitions. The standard enables a single ad to run across apps, regardless of their platforms, eliminating the need to generate multiple versions of creative.
That is a huge benefit in its own right, but there’s another key attribute of MRAID: It can make ads interactive. Banners, for instance, can expand into full-page ads and include not only calls to action, but also a variety of rich media features like revolving photo galleries and videos.
Advertisers are taking to MRAID ads because they offer the same scale as static banners and interstitials and can be bought in existing programmatic channels, yet they are able to offer a more engaging marketing message that should garner a greater response.
Publishers and developers find they can run MRAID ads in the same real estate they currently monetize with static display ads, but they monetize at a higher rate due to the increased engagement and performance of the ads. Available MRAID inventory is growing as publishers upgrade their apps to allow for creative using the protocol.
To support MRAID, programmatic exchanges have moved quickly to provide critical foundations for its growth: Buyers have transparency in terms of the ads they’re buying and the knowledge there’s enough volume to allocate their budgets and be able to optimize their campaigns. As with all inventory, programmatic offers significant efficiencies, too.
Mixing formats and monetization strategies is critical
To be sure, publishers can’t simply eliminate old-school banners in the short term and hope other formats will drive the same revenue. Besides, even static banners have the potential to strengthen brand awareness.
The best approach for publishers and developers is to diversify ad formats. Doing so not only creates CPM competition, but also produces a more interesting and balanced user experience. There’s not one perfect formula to follow; apps will need to determine the mix that works best for their audiences.
Likewise, suppliers should employ a diversified selling strategy to maximize yield. That translates into having a variety of demand partners and tools. They’ll likely find they can sell well-performing video inventory at higher CPMs through programmatic private marketplaces than through open exchanges, for instance. That’s largely because the supply of video inventory is relatively limited right now, and existing inventory is quickly gobbled up by advertisers buying out blocks of inventory when they identify an audience match and high-engagement metrics.
App developers should also consider employing header bidding technology, which has become an important monetization vehicle for desktop and mobile web. The strategy provides publishers and developers with access to all sources of demand with transparency into each impression’s value. What’s more, header bidding implementations remove the negative effects of the waterfall approach that publishers were accustomed to in the past, which can result in lost revenue opportunities.
Meanwhile, even as these new ad formats and monetization strategies find their ways into apps, it’s likely other alternatives will begin to emerge in 2017. It’s a space that doesn’t stay still for long, after all, and there are sure to be interesting ideas still to come.