An Absolute Beginner's Guide To Mobile Advertising

As the number of smartphone users grows rapidly, businesses can’t afford to ignore mobile advertising, Mobile advertising opens up tremendous opportunities for advertisers to target a large pool of audience on the go, and for app developers to monetize their apps.

In this guide we will cover the basics of mobile advertising.

What are mobile ad? And how does it work?

In layman’s terms, Mobile ads are ads that appear on smartphones, tablets, and any other mobile device. When an app developer joins an ad network he embeds a special code obtained from the ad network in his app and when the app is running on the user’s device, the ad network sends relevant ads targeted to the user’s device. Often the advertiser pays each time a user clicks on the ad.

Mobile advertising relies on three main parties:

  • Advertiser
    An entity that spends money to get an ad unit to display ads. This could be a brand wants to maintain its mobile presence and increase its brand awareness, or it could be an advertising agency undertakes campaign management on behalf of a group of brands, or an app developer who promote his app to increase visibility and download rate.

  • Publisher
    An app developer wants to make money from his app by selling ad units.

  • Ad Network
    An ad network acts as a technical and commercial intermediary between advertisers and publishers, allowing advertisers to buy ad inventory to show their ads and reach mass audience.

What makes mobile ads differ from online ads?

Although there are similarities between mobile ads and online ads, there are also important differences. ‏Mobile ads are more efficient as compared to online ads, Here are four major reasons.

  • The large size of audience
    According to eMarketer, the estimated number of smartphone users all over the world will surpass 2 billion users in 2016. For the Middle East, the number of smartphone users will exceed the threshold of 780 million users by 2019.

  • Effective Cost
    Mobile advertising is one of the most cost-effective ways to reach a large number of audience while spending less money compared to traditional advertising.

  • Always On
    Unlike desktop computers, most people keep their phone close to them all the time. This means that the advertiser which depends on mobile ads get more opportunities to deliver ads to the target market.

  • Advanced Targeting
    By leveraging mobile information advertiser can reach his target audience based on a variety of criteria such as current location, device type, etc. This allows the advertiser to design highly personalized and more friendly ads designed specifically for his targeted audience. For example, an advertiser can now go a step further targeting the state or the city and target only individuals who are close to his store at a particular time.

Types of ads

Mobile ads exist in many different forms, among them

  • Banner:
    The classic banner ad is one of the most popular ad type, usually appears at the top or bottom of the app’s screen as image advertisement.

  • Video:
    Video ad is similar to banner ad except that actual video clips are displayed instead of a static or animated image.

  • Interstitial:
    Interstitial ad is an ad occupies the entire phone screen and can appear before or after or during movement between the various pages of the app, which helps to attract the user to interact with him.

  • Native Ad:
    Native Ads take on the appearance of their surroundings They look like they belong in the app not a separate ads.

Important terms you need to know

By now, you should know more about mobile advertising. Here are some terms you need to be familiar with you to get into mobile advertising. It is important to remember that different advertising platforms may use different terms or definitions of the following concepts.

  • Pricing models
    Pricing model refers to the method used to determine how advertising costs are calculated. There are many models differ not only in the method of calculation but also in their suitability for different marketing objectives. The most popular ones are:

    • Cost per Click- CPC
      A common model in which the advertiser pays every time someone clicks on his ad.

    • Cost per Mile - CPM
      CPM model depends largely on the number of ad impressions, it does not matter if a user clicks on the ad, or does any action, as long as the ad is displayed. Payment is made to the publisher each time ad appears. This model is typically used when an advertiser wants to raise brand awareness among consumers.

    • Cost per Action - CPA
      As the name suggests, the cost per action (or in some cases, cost per acquisition) means that the advertiser pays only for each specific successful action carried out by the user, for example, successful sign up or app download.

  • Performance Metrics
    How do you know that your ad is effective and succeeded to achieve your marketing objective? Or how many visits your app gets and how much the estimated earnings? Questions like these can be answered by looking at performance measures which are indicators that will help you understand what is going on. Whether you’re an advertiser or publisher it is important to understand and use performance measures to optimize your marketing message or app.

    • Clicks: The number of times users clicked on an ad.

    • Impressions: The number of times an ad was displayed.

    • CTR: The number of clicks an ad received divided by the number of times that ad has appeared in a given time. For example: 5 clicks / 500 impressions = .01 x 100 = 1% CTR. This gives a good indicator of ad performance. A high CTR means an ad is performing well, a low CTR means poor performance.

    • Conversion - CVR rate: The percentage of users who have completed the desired action after clicking through an ad. Desired action may be to sign up for newsletter or download an app. To calculate the conversion rate, we are dividing the number of conversions to the number of visitors. For example. 200 download ÷ 7000 clicks = 0 .028 × 100 = 2.8% conversion rate.

    • Fill Rate: The number of times an ad was shown, divided by the number of times the ad was requested (e.g. 100 impressions / 1,000 requests = 0.1 × 100 =10% fill rate).

    • eCPM (Effective cost-per-thousand impressions): eCPM provides a consistent way to track earnings for every ad shown, regardless of the pricing model . eCPM is calculated as: (revenue / impressions) x 1000.

Conclusion

Mobile advertising is an effective way to penetrate markets and reach the largest number of consumers, characterized by high engagement rates, and cost effectiveness. No matter what size your business is or what industry sector it’s in, you undoubtedly will want to add mobile advertising to your marketing plan. If you are an app developer looking for ways to monetize your apps, mobile advertising is one of the main sources of revenue appropriate for mobile apps that you must take into account to achieve sustainable revenue in an easy way.