What is Mobile Advertising Spend?
As mobile devices have become an increasingly important part of consumers' daily lives, mobile app advertising has emerged as a critical component of digital marketing strategies for businesses and advertisers. With billions of people around the world using smartphones and tablets, the opportunity to reach a large and engaged mobile audience through targeted ads has never been greater.
Mobile advertising spend , which is the amount of money that advertisers invest in advertising their mobile app, has been growing rapidly in recent years, driven by the increasing popularity and effectiveness of the mobile app industry.
The current global economic situation is forcing all companies to review their budgets and expenditures, therefore, in this article, we'll take a closer look at the trends and strategies to decrease mobile advertising spend. We'll explore the different types of mobile channels that are being used, and the role of targeted advertising, data analytics, and ad optimization in reducing mobile advertising spend.
Strategies to Decrease Mobile Advertising Spend
- Focus on targeted advertising and contextual targeting
- Use data and analytics to track the performance of your mobile ads
- Optimize ad creative and use cost effective formats
- Channels Diversification
- Optimize retention rate
Contextual Targeting for App Marketing
Focusing on target advertising and contextual targeting can also help you optimize your mobile advertising spend over time by providing you with valuable data and insights into what's working and what's not.
Target advertising refers to the practice of tailoring your ad campaigns to specific groups of people who are more likely to be interested in your products or services. This can be done by using demographic data such as age, gender, location, interests, and purchasing behavior. By targeting your ads to the right audience, you can increase the chances of your ads being seen by people who are more likely to engage with your brand, which can lead to higher conversion rates and better return on investment (ROI).
Although advertisers have traditionally used behavioral targeting, which means leveraging a potential customer's data on their browsing and purchasing habits, increasing concerns about privacy have forced them to explore other alternatives.
With the release of iOS 14.5, every time users open a new app they get asked for consent to be tracked or not. If they deny it, the Identifier for Advertisers (IDFA), which is an anonymous unique identifier assigned by Apple to a user's device that allows an installed mobile application to track user behavior, is no longer shared. Therefore, attribution can only take place probabilistically, using certain dimensions of the user's phone and internet connection. Long story short, without the IDFA there is less data to target users.
Advertisers are no longer solely dependent on cookies or behavioral indicators to deliver targeted ads. Instead, by tapping into contextual insights, companies can still create messaging that effectively resonates with their intended audiences.
Contextual targeting is an advertising strategy that involves showing ads to users based on the content they are currently engaging with. In other words, advertisers use the context of the content to determine what ads to show. For example, if a user is reading an article about travel, an advertiser may show them ads for hotels, airlines, or travel insurance.
Contextual targeting does not rely on the user's past behavior or personal information, but instead focuses on the current context of their online activity. For example, advertisers can collect contextual data, such as the Operating System version or the internet service provider of a specific user. This approach is becoming increasingly popular as privacy concerns and changes in data privacy regulations limit the use of personal data for targeting ads.
As consumers navigate an ever-changing environment, their relevant behavioral data becomes outdated. However, advertisers can use contextual data to understand what users are interested in right now, rather than relying on past behavior. This approach can help advertisers deliver highly relevant and timely ads to maximize their impact.
Use data and analytics to track the performance of your mobile ads
Using data and analytics to track the performance of your mobile ads is crucial because it helps you understand what's working and what's not. By analyzing data on how your ads are performing, you can make data-driven decisions about how to optimize your ad campaigns for better results. This can help you decrease mobile advertising spend in a few different ways, for example, it allows you to track your business goals.
Since app analytics can help you identify which acquisition channels are converting the highest customer lifetime value (LTV), this can help you track business goals and come up with marketing and engagement strategies in line with your budget.
Use cost effective creative formats for your mobile advertising campaign
Ad creatives are the ads which promote your mobile app that are used to catch potential users’ attention and persuade them to download your app or make an In-App purchase.
Optimizing ad creatives allows you to improve your mobile advertising spend, in fact effective creative formats can help increase visibility and downloads, leading to high quality user acquisition and better retention rates, which ultimately drive more revenue and profitability.
Your mobile advertising spend can be influenced by the ad format you choose for your ad campaign. For instance, there is a difference between the average CPI for video ads, compared to the one of banners. Video Ads are indeed more expensive than Banners, however, the rationale behind this variation is that Video Ads will statistically attract a higher number of quality users for your app, who will produce more value.
Mobile App Marketing Channel Diversification
When it comes to decreasing mobile ad spend, it is necessary to consider ad channels diversification. Liz Emery, VP of Mobile & Ad Tech Solutions at Tinuiti asserts that, since users are omnichannel it is crucial that app marketers utilize omnichannel tactics to reach them. At the beginning stages of your mobile ad strategy, self-serve ad channels, such as MetaAds or Google Search Campaign, are a good way to start. However, it is not always enough. It is important to test multiple channels and when doing that advertisers have to keep in mind that channels such as Google and Facebook work with variable prices in the purchase of traffic.
Therefore, even though you can set budgets and price limits, if you want to increase your install volumes, you won't have a precise idea about how much you are going to spend. In short you can't predict it. Ad Networks and DSPs work with fixed costs instead. Therefore, since CPI and CPA are fixed, advertisers are able to estimate the total expenditure.
Optimize your Mobile App Retention Rate
Retention rate is an important KPI (Key Performance Indicator), which measures the percentage of customers who continue to use your mobile game over a pre-set period after the app install (Day 1, Day 7, Day 30 etc.) Optimizing your app retention rate is another effective way to improve your mobile advertising spend. In fact, investing in a good retention strategy is crucial to improve your users’ LTV, because the longer they continue to use the app, the higher will be the chances of positive revenues.
In a Nutshell
The current economic downturn makes it necessary for app developers to find effective strategies to decrease their mobile advertising spend. In this article I have summarized some of the best practices to reach this goal, such as focusing on targeted advertising and contextual targeting, using data and analytics to track the performance of your mobile ads, optimizing ad creative and use cost effective formats, diversifying channels to reach your potential customers and optimizing retention rate. By taking these steps, app developers can optimize their mobile advertising spend and acquire high-quality users that will help increase ROI and the growth of their app.