In-App Advertising Is Taking Off, But When Will Messaging Open Up?

jasonmorseData-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Jason Morse, vice president of mobile products at Criteo.

Consumers spend an enormous amount of time on mobile, particularly with chat and messenger apps, such as Line, WhatsApp and Facebook Messenger.

This represents a huge business opportunity for marketers, who must figure out how to leverage messenger services and add the in-app channel into their cross-device campaigns.

eMarketer forecasted that in-app advertising spending would outpace mobile web spending nearly 3 to 1 this year. Juniper Research predicts that, by 2018, it’ll reach $17 billion, making in-app the fastest-growing sector of the mobile advertising market.

Engaging with consumers in-app is incredibly effective, as it speaks to people in the moment in which they’ve already expressed intent. But, as with any emerging type of advertising, there are some questions and real technical challenges ahead.

As we move into 2016, in-app will continue to be top of mind for many advertisers and publishers alike.

Messengers As A New Advertising Opportunity

Today, messaging apps, despite the enormous potential to become a highly influential channel for advertisers to connect with consumers, remain largely untapped. But that’s soon to change.

Chat services, such as Line, WhatsApp and WeChat, are expected to gain 1.1 billion new users by 2018 and are evolving into the next central communication hub, as Mary Meeker noted in this year’s Internet Trends Report. And messaging is predicted to “blow past social networks as the dominant media activity,” according to business strategist Michael Wolf.

For now, getting access to new inventory that opens up new user reach has some limits. These app environments remain one of the last supply channels where inventory either doesn’t yet exist or where it isn’t yet being programmatically sold.

Messaging apps have the first-party identity data that makes Facebook and its counterparts so attractive and, in addition to identity and reach, messengers will start to provide more contextual data – especially if people are able to enjoy the functionality of the Internet within messenger platforms.

App publishers soon won’t be able to keep the demand and potential for monetizing mobile apps at bay. Snapchat and Instagram both, eventually, became ad-supported. WeChat began experimenting with ads in 2014, and Zuckerberg has started to make Messenger and WhatsApp ad-supported, as well.

For now, the inventory access isn’t happening at scale, but more app publishers with large audiences are feeling the pressure and beginning to grant it.

Integrating Apps Into Cross-Device Campaigns

In-app advertising’s draw isn’t only about access to new users or mass amounts of consumers. It’s also about adding an additional channel to cross-device campaigns in order to stay closely aligned with the evolved consumer buying journey.

The technical hurdles of developing a fully dynamic, personalized marketing campaign on mobile devices is largely solved with IDFA and AID. But the biggest remaining challenge is still cross-device, people-based targeting. The ability to ensure that advertisers are delivering the right ad to the right user seamlessly between app and the web is an area of ongoing improvement.

Indexing content inside of apps, then providing a continuous way to link the user there, such as from another app or the mobile web, is a process that is exciting if done properly. But it’s also a technical roadblock at the moment.

The good news is that strides are being made to help find a resolution. Deep-linking is helping to create an uninterrupted consumer experience. More work is being done in the industry to ensure that campaigns are holistic and that ads are driving post-click action as well as supporting desired user experiences.

Newer technologies are also beginning to percolate that deep link to an app and take users to the exact spot within the app they’re most likely to complete a transaction. As data on in-app behavior and search becomes more readily available and combined with behaviors from other devices and platforms, publishers and the technology behind cross-device advertising will continue to improve its effectiveness.

Follow Criteo (@criteo) and AdExchanger (@adexchanger) on Twitter.

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