The IDC reports that up to 75% of in-app advertising promotes other app downloads. How often are competitors taking advantage of this by converting a foe’s audience into their own downloads?

[tweetable alt=”International Data Corporation report: 60% to 75% of in-#app #ads promote other apps, says @CNN.” hashtag=””]A recent report from the International Data Corporation (IDC) states that 60% to 75% of in-app advertising promotes other apps,[/tweetable] according to CNN. Meanwhile another study by mobile app marketing firm Fiksu put forward an even larger range: 50% to 85%.

Sometimes, these ads are for apps that compete in the same market as the one being used. Finding this a bit hard to believe, we ran our own test. This article provides a background on in-app advertising, as well as the results of our own (fairly unscientific) test.

What Is In-App Advertising?

In-app advertising consists of display ads that appear while you’re using an app. Common ad types include banner ads along the bottom or top of an app and pop-up or overlay ads that take over all, or a large portion, of your mobile device screen. Here are some examples of these ads as they appear on an iPhone:

Kim Rust/iPhone 5S and iPhone 6 Screenshots

Kim Rust/iPhone 5S and iPhone 6 Screenshots

Are Most Mobile Ads for Apps?

The IDC and Fiksu results came as a surprise, so we ran an unscientific study of our own as a gut check. We randomly opened 20 apps with ad placements from a variety of app categories. We were surprised to find how different our results were as compared to the IDC and Fiksu, [tweetable alt=”@oo_monkeys’ #unscientific #study says only 10% of #mobile #ads were for competitor #apps, unlike @Fiksu’s data.” hashtag=””]as we found that only 25% of mobile display ads were for other apps and only 10% were for competing apps.[/tweetable] Here are the results in detail:

Kim Rust/App Advertising Results

Kim Rust/App Advertising Results

The competing app examples included an ad for Netflix on the IMDB app, now owned by Amazon, which has its own proprietary video content streaming product that it promotes as a perk of Prime Membership. A second example was an ad for another game within a gaming app experience.

Why Do Apps Have In-App Advertising?

Apps include in-app advertising as a part of their business model. An app developer generates revenue by selling ad real estate within his or her own platform. Monetization has worked well for gaming apps, where a free version of the game is often available for download with ads while a paid version features none.

This is also a common app monetization method for media companies providing news, music, and video content–industries historically supported by advertising dollars garnered through other channels.

The Don’ts: How not to Advertise In Apps

Kim Rust/WSJ to Arizona

Kim Rust/WSJ to Arizona

1. Don’t have your in-app ad click through to an experience that is not optimized for mobile platforms. You are providing a poor experience for your frustrated user. Check out this example marketing Arizona as a tourist destination. The ad itself is fuzzy, and the link to the full site provides a less than optimal user experience.

2. Don’t send an ad clicker to the mobile web if you can drive an app download instead.

The Dos: Mobile Advertising Success

1. Do optimize the mobile experience. In-app advertising is well-executed when the user is enticed to click on the ad and when the destination is both optimized for mobile platforms and relevant (as in, it meets the user’s expectations upon clicking on the ad).

Shazam_to_iTunes

2. Do convert ad clickers to app downloaders. App users are your brand loyalists, as they likely spend more time and money with your brand than anyone else. If your company has an app, you should opt to deep-link the user into that app if it’s already installed, as this will re-engage the downloaders.

If the app isn’t installed on the device, the ad should link to the iTunes or Google Play install page for one-click installation. Best practice indicates this download should be followed up with a user re-engagement strategy.

Kim Rust/ATR to Hotels

Kim Rust/ATR to Hotels

3. Do ensure your display ad assets render clearly on all devices and don’t pixelate as screen size (in both inches and pixels) increases.

4. Do choose your audience. Whenever possible, ensure your ads are appearing where your customers are. For example, advertise AllRecipes.com within the cooking section of a media app. Look to have your ads appear in complimentary apps with complimentary content–not competing apps. Attacking the competition in this way reflects poorly upon your brand.

Too often, organizations spend advertising dollars without knowing or understanding the context of the user experience, which cannot be seen as a shrunken down version of the desktop.

Companies should ensure their ads are meeting users’ expectations in the mobile context by following the do’s and don’t above as a starting point. To start creating a positive experience for your mobile app users, check out Infinite Monkeys’ free app-creation software.