Grab your smartphone and scroll through your Facebook feed or view a few YouTube videos and note the popularity of mobile video ads. They’re seemingly everywhere. In fact, according to mobile ad network InMobi’s “North America
State of App Performance Marketing” study, their use has just surpassed banner ads by 2%.

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That’s just one of many trends taking shape in mobile today. InMobi’s study aims to give mobile app marketers a view into those trends, as well as:

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• what’s working and what’s not in the mobile ad space;

• what marketers see as important or challenging; and,

• where the future of mobile app marketing is headed.

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“Mobile is an incredible [marketing] tool,” because a smartphone is such a personal device and most people always have theirs by their side, says Martin Berman, VP of remarketing at InMobi.

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InMobi’s State of App Performance Marketing survey, which polled some 800 app marketers worldwide, including 120 in the U.S., covers trends in five key areas: app marketers, user acquisition, remarketing, measurements and attribution, and ad fraud.

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1. App marketers: Who are they and what concerns them?

The mobile app industry is still budding, with 63% of developers working four years or less in the field. Though three in every four app marketers polled rate their knowledge as adequate or strong, just 13% call themselves experts in this constantly evolving industry. Despite their growing role in the revenue mix, most teams are compact—71% have five people or fewer—and each member plays multiple roles.

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The most important goal for 71% of those app marketers? User acquisition. Consequently, they prioritize attracting as many new, unique users as possible.

When it comes to monetizing mobile, more than 64% of app marketers prefer in-app advertising, followed by in-app purchases of both virtual and real world goods (50%). Some marketers are using multiple approaches simultaneously to diversify revenue streams for maximum profitability.

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The toughest marketing challenge, according to 60% of respondents, is app discoverability. Marketers are encountering more difficulty raising awareness for their app than ever before. In addition, 46% say user retention and engagement pose a serious problem because levels of both diminish over time. The key concerns facing in-app advertising include ad fraud (47%) and attribution (45%).

Source: inMobi

2. User acquisition trends and strategies: What’s influencing the mobile app sphere?

Though user acquisition is their top priority, app marketers allocate surprisingly low budgets to it; 43% of respondents allot less than $50,000 each month and 19% spending nothing at all. Berman says, “Investment overall in user acquisition… still tends to be far lower than where it probably should be.”

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More than half of marketers polled (52%) use video ads for their user acquisition campaigns, surpassing banner ads by 2%. Thirty-six percent of respondents plan to invest in video for user acquisition over the next year, and 45% are increasing their investments from this year.

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More than half of app marketers polled prefer the cost-per-install pricing model, though firms are moving toward more diversified pricing models as the app landscape becomes more sophisticated.

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Mobile ad formats are also shifting as video advertising gains popularity among
app marketers. The trend towards varying ad formats is a smart move, according
to Berman. “[App marketers] need to continue to test more with multiple formats,” he says. “They should be exploring and utilizing other formats to… try and pull
users in.”

Source: inMobi

3. Mobile remarketing: Why the lack of adoption?

About a third of app marketers (33%) currently engage in some remarketing efforts and another 36% plan to invest in it within the next year. The top
three reasons why app marketers refrain from spending more in this area:
it’s too expensive (50%), too complex (22%), and can result in a poor user experience (22%).

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Too little investment in remarketing, however, can be a missed opportunity to engage and retain users. “You spend all your time pulling in and driving user acquisition without taking the time to nurture those relationships with those consumers,” Berman say. “After an app install, you’ve only got about 90 days
to really foster that relationship with a consumer… You’ve got to constantly
be engaging.”

Source: inMobi

4. Measurement and attribution: What tactics are tops?

Eighty percent of marketers polled find attribution important to app marketing success, and a majority (52%) say it’s very important. They use a wide range of data-driven tools to drive best performance and optimization, with current and future usage focused on app store analytics (55%), in-app analytics (43%), and A/B testing (42%).

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Viewability as a campaign reporting metric is gaining traction; 46% of app marketers says it’s a component of their attribution models for in-app ads.

Source: inMobi

5. Mobile ad fraud: How are app marketers are dealing with and
combatting it?

Fifty-nine percent of app marketers polled believe that mobile ad fraud is a serious problem that ad networks must do more to address, despite just 40% saying that they have a clear understanding of the concept and its implications when executing campaigns. However, 84% of respondents say they do have some grasp of what mobile ad fraud entails.

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Though the landscape of ad fraud is constantly changing as fraudsters develop new methods to evade detection, the three most prevalent practices respondents have experienced are: invalid traffic by bots & scripts (48%); unauthorized re-brokering (13%); and click cramming (13%).

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To minimize the impact of fraud, app marketers currently use measures such as partnering with trusted ad networks (58%), blacklisting IPs (33%), and direct publisher partnership (27%). Overall, marketers must educate themselves on this issue and all parties must come together to build stronger, safer networks, the study advises.

Source: inMobi

Despite these hurdles, Berman is optimistic about the future of mobile app marketing. The next few months, he says, represent a significant opportunity to revitalize campaigns as the holiday season approaches. “September is a great time from a user acquisition standpoint,” he says, adding that, “from a retargeting standpoint, November/December is great [timing] to activate those new users that they’ve acquired. Bringing consumers through that journey, he notes, will help increase their spending. And, ultimately, driving revenue is what will keep mobile marketing moving forward.

About the Author

MKTGinsight contributing writer Hannah Whalen is a journalist and editor who has an affinity for politics, digital marketing, and all things media. She is a Macaulay Scholar and recipient of the Bella Abzug Leadership Institute’s Excellence in Civic Engagement Award. Hannah currently writes for spoiledNYC and contributes to several online publications.

Find her on LinkedIn and at @hannahawhalen.