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Snapchat is edging closer to one of mobile advertising’s biggest categories — app-install ads — in a move that is sure to boost the company’s bottom line, Ad Age reports.
Mobile app-install ads are an essential tool for developers to promote their apps. These ads direct users to download specific mobile apps, helping them stand out among the more than 4 million apps in Google Play and the App Store.
Because of this, app-install ads make up a substantial share of mobile ad spend — accounting for 25% of total US mobile ad revenue in 2015, according to our estimates.
Competing in the app-install market is a must if Snapchat wants to be an internet titan. The company is working on a several products on this front, including a self-serve ad product for marketers to set up their own campaigns, enabling them to bypass Snapchat’s ad partners or the company’s sales team. It's also testing support for app-install ads in its Snap API so that these campaigns can be more easily managed.
But Snapchat still has a long way to go before it catches up to its rivals. Google reached 3 billion app installs in August, up from 2 billion in May. Facebook, the early frontrunner in this space, announced its app-install ad business had driven 2 billion installs in April 2016.
Cutting through the noise of an overcrowded app market is critical for any app developer looking to build a viable user base. There are now well over 3 million apps available across the world’s five largest app stores. Delivering the right product to the right audience at the right time in this environment is imperative to the success of any app.
The challenge of marketing an app effectively has made app-install ads — an ad unit that directs users to download a mobile app — an essential tool for developers seeking to stand out in the Google Play and Apple app stores. This is why it's not surprising that more marketers are using paid channels to drive downloads than ever before. In fact, over 80% of respondents in a survey of the top 100 grossing mobile app developers noted they plan on increasing their spend on app-install ads in 2015.
BI Intelligence, Business Insider's premium research service, has compiled a detailed report on mobile app-install ads that looks at the revenues from app-install ads and how they're expected to grow over the next five years. It also looks at the performance of app-install ads and how these metrics are expected to change over time.
Furthermore, the report examines the top app-install ad products and pricing models offered by the leading advertising platforms, including Facebook, Twitter, Yahoo, and Google, as well as newer app-install formats from Instagram and Snapchat. Looking to the future, the report examines how companies are shifting their app-install ad spend to new formats, as well as the new tools they're using to improve optimization and ad effectiveness.
Here are some key takeaways from the report:
- Mobile app-install ads — ad units that direct users to download a mobile app — are an essential tool for developers, and they account for a major share of mobile ad spend. We estimate 25% of total US mobile ad revenue was generated by app-install ads in 2015.
- A combination of new developers entering the space and rising ad budgets will drive increased spending in years to come. US app-install ad revenue will grow to over $7 billion by year-end 2020, according to BI Intelligence estimates.
- Mobile app install advertisers have traditionally invested heavily in display and interstitial ads, but are moving to mobile video and native install formats. 86% of developers currently use in-feed video app-install ads, and video ads are seen as the most effective app-install format.
- As formats like video rise in popularity, older formats are losing their appeal for install campaigns. Static nonnative ads are widely used but are not seen as effective. Free app networks and offer walls have also fallen out of favor.
- Ad platforms are now developing innovative new install formats to earn even more revenue from these lucrative ad units. New approaches, including deep linking and app streaming, are more contextualized and interactive than older ad formats.
In full, the report:
- Forecasts app-install ad spending in the US through 2020.
- Explores which app-install ad formats developers believe are most effective.
- Discusses what the most popular platforms and ad networks are doing to attract ad spending.
- Investigates new tools for marketing apps, including deep linking and app streaming.
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