Mobile App Advertising: The Next Frontier?

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When’s the last time you were looking for a game score on your ESPN app or checking in on Foursquare and an unexpected ad showed up? As mobile app usership is skyrocketing, so are ways companies can use apps to market to their audience. Now is the time for all businesses need to assess handheld device advertising options.

As mobile phone and tablets have increased in popularity, so have ways to use them to engage consumers. Today, 56% of Americans own a smartphone, 34% of American adults own a tablet (Pew Research), and those numbers continuing to grow. Zenith Optimedia projects that $6.2 billion will be spent on mobile ads in 2013; 3.7% of total ad spending, up 81% from last year (Zenith). Companies from all industries are currently investigating ways to advertise and grow their market share through these mobile applications.

We’ve seen various mobile advertisements before:

  • Mobile Youtube commercials
  • Promoted tweets and Facebook posts
  • Even smartphone videogame ads

The list goes on.

With such explosive growth in the handheld sector, even more app providers are looking for a piece of the action and are coming up with creative ways to put advertisements in front of consumers. While companies have been using apps like Yelp and Foursquare to list their business, they are now able to pay for premium listings and promoted posts within apps like these to boost their reach and exposure.

Yelp now offers a cost-per-click promotion on its app similar to Google Adwords, where Yelp will give a company a premium listing and charge the company each time the listing is clicked. The fees currently range from around $2/click for restaurant and bar destinations, to $3-5/click for professional and home services (Clickz Yelp).

Foursquare now offers a similar promotion in which businesses can promote their listings/tips on the app’s Explore page, and will only pay for the ad when a user clicks on the company to see more or checks in at the business after seeing the promoted listing.

Instagram recently announced their plan to include ads within their app. Ads will likely show up in users’ feeds; however, users will be able to hide the ads they do not wish to see more than once. The Instagram Blog also explains that the majority of ads (at least in the beginning) will come from companies who already use high quality photos and videos and are well known within the Instagram community. At least 2/3 of top brands use Instagram accounts currently; so it will be interesting to see in the coming months if the inclusion of ads causes more brands to use the app, or if current brands on the social app elect to run ads in addition to their normal posting (Clickz Insta).

Since so many brands already use pictures and videos to interact with fans on Instagram, one would ask: how many people in the correct demographic who don’t already follow the brand will see the post?

And if many people outside of the brand’s followers do see the advertised post, how much of an effect will it have for its cost?

As you look toward the future, it’s important to think about and consider ways the increase in mobile advertising options can affect your brand or business. Fiksu attests that mobile advertising is the second most cost-effective advertising, behind only social networks. Mobile app advertising is a great way to showcase your business to a specific audience and give you a leg up over the competition, but you must ask:

  • Is it our best option to reach our audience?
  • Can we afford this type of advertising?
  • Can we achieve our goals on certain apps without paying for an ad, and simply just maintaining our account or listing?

Or if your company has an app:

  • How can we use our app to promote our business?
  • Should we consider using our app to promote other businesses, through advertisements or partnerships?

In the business world today where technology goes, advertisements follow. Likewise, as the number of smartphones and tablets increases in the world, the number of apps with ads increases. You and your business need to constantly monitor mobile applications and consider the ways they can impact your brand.