While Vance Packard’s revelations in ‘The Hidden Persuaders’ (now more than six decades old) warned consumers about the psychological power of advertising, it nevertheless failed to inflict a mortal wound on the advertising industry. However, ad blockers seem destined to enjoy better success as they become the weapon of choice for mobile users in stemming the flow of traditional in-app advertising which many find so irksome. But will app developers be wise enough to adapt their strategy, and is there a viable go-to option?
Rewarding ads outperforming classic ad formats
A 2016 survey by Appsflyer, covering more than 100 million device owners across 1,000+ apps, discovered that just over 5% of app users actually spend money on in-app purchases. So with the vast majority of participants spending no money on classic advertising shown to them, as well as finding the ads disruptive, this revenue stream is not looking particularly future-proof.
By contrast, mobile offerwalls and other reward-driven formats are relevant and engaging. Perhaps even more importantly, they are totally opt-in choices which are welcomed as user-friendly add-ons. Therefore it is no real surprise that mobile users also find them persuasive. And for developers, even though offerwalls in mobile apps and similar new-wave rewards gather revenues in a different way, there is no denying their growing popularity.
Expressing this in figures, Statista (2017) data shows that in-app purchase revenue is set to be the leading source of mobile app revenues, accounting for 48.2% of earnings compared to 14% gained from ads-based revenue and 37.8% generated from paid app downloads.
You can boost retention too
Giving your users total control of their in-app advertising experience can do much more than simply influence the behaviour of non-payers. By providing real value through offerwalls and similar rewarding ads, you can significantly alter the mindset of your users. Where once they were resentful of intrusive ads, instead they can now choose what type of benefits they want to explore during their time in-app.
With so much duplication and competition within the mobile entertainment sector, empowering users in this way is already playing an important role. Observers note that many players are now more engaged, are happy to stay on site longer, and are much more likely to return to their favoured site more frequently.
Unlike classic banner ads and nagging requests for in-app purchase actions – which just annoy site visitors – the outcome of reward-based advertising leaves both users and mobile app developers happy – a classic win-win result!
The rise of ad blockers
As more and more people browse the Internet via mobile devices, statistics tell us that:
‘More than one in five of the world’s 1.9 billion smartphone users are blocking ads when browsing the web … At least 419 million people are blocking ads on smartphones … ’ (CNBC)
Some developers may feel they can live with that, but the sting is actually in the detail. Discussing the increase in ad blocking, CNBC go on to say that these figures actually rose ‘90 percent between January 2015 and January 2016’.
The advent of rewarding ads
To counter this threat to the effectiveness of their advertising messages, many companies are looking at new formats. Rewarding ads, for instance, adopt an ‘exchange of value’ strategy. Here, a mobile user can opt to complete some kind of interaction (e.g. watching a video clip, answering survey questions), and in return will qualify for various in-app rewards (e.g. unlock premium content, some form of digital currency, or exclusive access to new gaming features). In-app offerwalls take this approach one stage further by presenting users with an array of enhancement options.
These tasks and rewards are carefully graded: a simple interaction will secure a small reward, whereas something which takes longer and is more valuable to the advertiser may offer a more substantial bonus.