In-App Video Ads: Here’s Why You Should Embrace It

Mobile advertising has gone a long way from small banners to highly engaging and immersive in-app video ads. Now video ads on mobile apps are interactive and exciting. They include a lot of media and work as interactive game formats. Such app video ad units no longer irritate users because they provide a real value exchange. Because of this, users understand that in-app video ads are not here to spoil their experience, but rather to extend the opportunities they receive from the free apps.

When used the right way, mobile app video advertising brings a lot of benefits to everyone – advertisers, app developers, and users. Let’s review the secret behind the popularity of this format to understand why it is a good idea to have such traffic in your marketplace.

What is mobile video advertising?

So, what is mobile video advertising? When we refer to mobile video ads, we mention all kinds of video ad units that can be served in the mobile ecosystem.

For starters, it is worth pointing out that mobile advertising video can is served in two different ecosystems – in-app and mobile web. A mobile web ecosystem can support almost all of those ad formats that are typically available on desktop (since mobile versions of the website are also served in the browsers). On the other hand, is in-app video advertising which is served inside of the apps (not in the mobile browsers), and hence requires a different approach to advertising. In practice, it means that such video ads could allow an additional layer of interactivity, some of the video formats work exclusively in the in-app environment. So, let’s review the most popular in-app video advertising and mobile web video formats.

App video advertising

Playable video. Playable video is like a mini version of a mobile game that appears as a part of the ad experience in the app. This way, the user has an opportunity to try the new game before installing it (the ad unit contains the game installation link that leads to the app store).

Rewarded video. Rewarded videos are also specifically suited for apps. These ads provide users with an opportunity to receive bonuses in exchange for ad watching (coins, extra points, access to in-game items, closed content, and specific functionality of the app). Because of such value exchange, over 70% of users give preference to the experience they obtain with rewarded video ads.

Mobile video advertising

In-stream video is the closest format to TV commercials. The video is embedded in the player that shows the ads before (pre-roll), during (mid-roll), or after (post-roll) the content in the video player is streamed. The major advantage of these ads is that the advertiser can control the ability of the viewer to skip the video – immediately, or after five seconds after launch. As well, the videos can be made unskippable.

Out-stream video is a mobile app advertising video that is getting placed inside of a webpage’s content (for example, in the text of an article). Video of this format plays automatically without sound (the sound is turned by the user when necessary). This format is considered less annoying as it does not interrupt the browsing experience on mobile sites.

The types of out-stream advertising include the following formats (according to IAB):

In-article (in-text) video – the video that appears in text space, in-text video is getting activated when it enters the visible area of the user screen while scrolling;
Native video – the video ad that looks like a part of the main content of a mobile website or social network page;
Interstitial video – a full-screen video that appears when the user switches between pages of the site/application;
In-feed video – a native app ads video that looks like a part of a news feed on social networks;

In-banner video – the app advertisement video that is placed inside the ad banner, the video player occupies the entire area of the banner or part of it.

Video ads on mobile apps: how big is the market?

App video advertising obviously booming. While the mobile advertising market size is growing, now it accounts for approximately 11 billion U.S. dollars, it is also expected that it will reach 57.85 billion dollars by 2030. Such growth meanwhile will soon show a compound annual growth rate (CAGR) of over 18%. With this, video content is consumed by more than 90% of the population. The number of digital video viewers also increases along with advertisers that choose app video advertising as the most important promotional tool for their products or services.

In-app video ad: how effective it can get?

The viewability of the in-app videos reached as high as 78% in the first half of 2021, which means that 78% of in-app video ads displayed during the period were seen by real people.

What about the cost then? Sure, video ads on mobile apps are more expensive than, let’s say, banner ads. However, the CTR that they generate as a result is also much higher than in banners (in fact, 7.5x higher). Thus, it could be right to say that banners cost less but also generate smaller click-through rates.

Naturally, app video ad appears to be more engaging for users because they can deliver the brand story, educate the users or provide them with in-game bonuses in exchange for ad watching. That is a secret sauce of their effectiveness and that’s why they also generate 7.5x higher engagement rates when compared to static display formats.

Post-install action rates are also elevated for video ads (with install-to-register rates of 35.1% compared to 28.5% for display ads). Install-to-purchase rates are 4.8% for video and 4% for display ads.

Video advertising app campaigns – how much traffic can they generate?

As we already found out, video ad app campaigns can be very beneficial when we talk about CTR, engagement, and other performance indicators. Let’s then review what you can achieve with in-app video advertising on SmartHub.

Recently, we’ve been making a close-up review of the SmartHub success stories. A lot of SmartHub owners achieved spectacular results from media trading in 2021-2022, so we decided to examine how they managed it. We discovered what traffic types and formats our clients used and which QPS plans their systems were operated on. We found out that while some platforms were focused solely on in-app banners, the others only focused on in-app mobile video advertising. Some clients who achieved success also combined both formats in their marketplace. Integrated partners, meanwhile, influence this focus the most, since some partners may require app traffic and others banner traffic.

What’s more to this, we’ve found out that mobile app video advertising was the leader in profit generation among formats. As stats illustrate, the platforms running on 100K QPS plans obtained profits of (14,488.71) by running (27992849) impressions only across in-app video format. At the same time, in-app banner format generated the most ad impressions (and thus provided great reach), which proves that every ad format undoubtedly has its benefits.

The last word

Mobile app video advertising is very advantageous in terms of profit generation, engagement, and CTR. In-app video advertising is a large growing segment that enables even more interactivity during the ad experience, that’s why it will steadily grow in the future. In-app traffic is turning into a gold mine for advertisers and that’s why SmartHub owners should not miss the opportunity to serve such ads in their marketplaces. In SmartHub video ad serving is operated by VAST (Video Ad Serving Template) which ensures that video ads are displayed on various online platforms and across various digital devices correctly. With this, partners that are connected by VAST can trade efficiently with other partners irrespective of their connection type. Read more about how trading with VAST tags is happening on SmartHub.