Pros And Cons Of In-app Advertising

The worldwide in-app advertising market is expected to generate approximately 200 billion dollars in 2022. This implies that this market has a lot of potential but is a very competitive ground as everyone is trying to be on top of search results. Everyone wants to generate extra income from in-app purchases, but this is not the most reliable way to get revenue from apps. However, in-app advertisement is not always a good experience for users, as overexposure to ads can ruin the user experience.

 

This means that in-app advertising is both beneficial and damaging for the app. So, it is important to know its pros and cons before implementing it. Here are some pros and cons of in-app advertising that you should keep in mind.

Pros Of In-app Advertising

In-app advertising can be a great way to earn extra income and increase user engagement in the app. Some of the benefits of in-app advertising are as follows –

Good Source Of Revenue

The majority of apps that are available on the App Store are free of cost unless they are built on any subscription model like Prime or Netflix users. So, here app developers have only two revenue streams: In-app purchases and in-app advertisements. However, not every gaming app can generate revenue from in-app purchases because they either lie in the casual gaming category or they are not too famous.

 

Gaming apps also have a UX that is favorable for in-app advertisements that can be inserted between multiple levels of the game. However, this will not be feasible on a shopping app where the sole purpose is to convince users to purchase listed items, and even a slight distraction can disrupt the user experience.

Enhance User Engagement

Placing an ad in the right place will encourage users to engage with them, which will eventually lead to increased engagement on the app. Furthermore, it will also help them increase their bounce rate and retention and generate revenue. For instance, many gaming apps give bonus points to their users for viewing apps on their app. Thus, users get encouraged to watch more ads to accumulate more and more prizes.

 

App developers have the freedom to place ads wherever they wish. And they use this to place ads at places where they can perfectly blend with the flow of the app and cause less disruption. By doing this, they ensure that the user experience does not get tampered with.

Catalyze In-app Purchases

We discussed earlier that two primary revenue streams for app developers are in-app purchases and in-app advertisements. So imagine how much benefit the app users can have by increasing in-app purchases through ads in mobile apps. This is what most apps do by placing ads about their services on their app to increase engagement and encourage users to buy their services.

 

Studies show that users tend to view 4.2 times more products through in-app advertisements than they view through organic searches. That means companies can make 4.2 times more sales by using in-app advertising than they would through organic means.

Cons Of In-app Advertising

Although in-app advertising is a great way to make extra bucks, it comes with a lot of hurdles. These cons of in-app advertising are as follows –

Hustle To Be Unique

A study shows that almost two-thirds of all brands use in-app advertisements to create brand awareness. Meaning there are huge volumes of ads being displayed over the internet, and you need to compete with them to create your presence.

 

Getting notices in a crowded space where users tend to skip ads more than they click on them is very challenging. Therefore, you need to set ads that are relevant and do not disrupt the user’s experience but rather add more value to their experience. But this is not as easy as it sounds, and this is where in-app advertising becomes a challenging road.

Tracking Revenue Generated

When placing advertisements in apps in iOS14, app developers face difficulty in attributing ad revenue. The latest app tracking transparency framework used by Apple asks users to share user identifiers. The impact of this system has been substantial on app developers, as they are finding it hard to attribute their ad revenue to any user acquisition source.

Tackling Frauds

With an increase in the number of in-app advertisements, the level of fraud has also increased. These frauds have led to fake installs spreading distrust among users regarding apps. Although fraud detection technology has improved a lot, users can still face high-level frauds where fraudsters create a fake higher value in-app event.

 

Such fraud networks often harm the advertisers as they are not able to track the true performance of their ads. They assume the users coming from fraud methods as genuine customers, leading to the accumulation of false data.

Conclusion

In-app advertisement can be a great benefit for some companies. But at the same time, they can be used for fraudulent activities damaging the brand image of the company. Therefore, you need to be extra careful while dealing with them.