Mobile banner ads don’t get much respect, but they are surprisingly effective when it comes to mobile advertising. By contrast, video ads aren’t as effective as they are hyped to be, according to the inaugural Creative Ad Index report by mobile user acquisition firm Liftoff.
Released the year mobile is projected to eclipse television in consumer attention, the report finds effective mobile advertising has never been more important.
Liftoff’s latest report analyzed 273 billion ad impressions across 4.5 billion clicks, 63 million app installs, and over 22 million post-install events in more than 1,200 apps between November 2017 and October 2018 with some surprising results.
Video ads are more hype than substance
Mobile alone is expected to drive 72 percent growth in online video advertising spend. Yet despite the rise of video advertising and its success on social media channels on mobile, Liftoff’s data suggests marketers have yet to execute on the potential of this promising format on mobile programmatic.
Video ads show the most impressive install rate, indicating that people naturally respond to them. Yet they falter when it comes to all important in-app actions. At $12.16 to drive a first-time event, video costs nearly double that of both native ($7.65) and banner advertising ($6.18), the report said.
With a mid-range action rate of 33.4 percent, the price-to-performance ratio further limits the appeal of video. Altogether, video is a surprising 120 percent less cost-effective format than the less sophisticated, often disregarded banner ads. The format also clocks in behind native ads, which are 84 percent more effective when comparing price-to-performance ratio.
The stumbling block? Liftoff said that marketers are shoehorning existing video creative from social media instead of building uniquely for mobile programmatic campaigns.
“Video ads are a rich medium with incredible potential, but our data suggest that one reason the promise of this exciting format exceeds the current results in the mobile programmatic environment is that many marketers are still repurposing social media and TV ads for mobile use, limiting their success,” said Liftoff CEO Mark Ellis in a statement. “While advertisers have traditionally made use of the format to tell complex stories that engage human emotions and senses, we’ve found that for mobile programmatic advertising, brevity trumps detail — and concise, less-than-15-second, non-skippable videos work best.”
Banner ads are surprisingly effective, especially on Android
Though banner ads are often written off as dated or ineffective, Liftoff’s report said this format actually outperforms native ads by a landslide when it comes to post-install engagement on Android, the dominant platform in developing markets. It turns out that banner ads, at $3.73 per post-install action, are value king for Android systems. The format is 22 percent less expensive than native ads ($4.55 per action), while at the same time offering a higher ITA at 38.1 percent (compared to native at 35.8 percent).
While native ads drive ROI on iOS, mobile marketers looking to scale in Android-heavy emerging markets may find that allocating more spend to tried-and-true banner ads will be more effective.
With a record-setting $1.22 billion spent in the App Store during the 2018 holidays alone, mobile app advertising is poised for a big year in 2019. Though it is important to invest in every ad format in programmatic advertising, allocating ad spend effectively and knowing how to best leverage each format will be key for marketers aiming to capitalize on the industry’s growth.