Mobile apps or mobile display ads? Which is best?

In short, the answer is both! That’s not sitting on the fence; it’s based on a series of facts/reports that show both options have their place.

Mobile applications certainly continue to forge ahead in popularity, making “in-app” ads a growing and increasingly attractive option for brands that want to target mobile consumers. And while mobile-savvy marketers have begun investing more money into those in-app ads, mobile Web-based display advertising can offer a better result/ROI (return on investment) for some.

Strategy Analytics, in its report earlier this year, found that in-app ads have overtaken mobile Web display ads. (In the United States and Western Europe, apps are becoming the key distribution mechanic for media on mobiles, with brands spending just over £1 billion, or US$1.7 billion, on in-app ads stacked against £600 million, or US$934.5 million, on mobile display ads.)

Strategy Analytics says consumers are clearly using the apps they download (contrary to popular opinion that people use a small number of apps they store on their device), and that based on consumer usage of apps, brands should place more of their mobile budget toward in-app advertising. The report found that more than 23 billion apps were downloaded globally in 2011, an increase of 38% over the previous year.

One of the trends driving growth of in-app advertising is the growing amount of time mobile users are spending on social media activity on smartphones. Another reason is that marketing monies invested in in-app ads can produce strong results beyond monetary ROI. In-app ads can provide more information about a user than browser-based use can — enabling better future targeting.

Additionally, while users are often frustrated by in-app ads, recall metrics linked to in-app ads are relatively high, according to digital agency TargetCast, New York, which has done much work in this area.

Generally speaking, the surge in the overall amount of time consumers are now spending on their devices is seeing mobile advertising rise generally. A 2012 report from the Internet Advertising Bureau (IAB) found that mobile is the fastest-growing category for advertising, with nearly 150% growth recorded last year. As a result, mobile Web-based display ads are expected to continue to be strong as well this year.

The growth in in-app ads has not had a significant impact on display ads overall and display budgets have not been reducing. TargetCast says advertisers should invest money in their mobile ads to their target audiences at the most opportune times, possibly taking advantage of a combination of both in-app and display ads.

Want to know where specifically to invest? Data for the first quarter of 2012 from ad network InMobi shows that Apple’s (iOS) continues to be the dominant platform for display ads appearing both in apps and on the mobile Web. Indeed, Apple had a 37% share of total impressions (up 3.7%), while Android had a 34% share, (up 1.6%) — which more than gives us all a clue as to where we should be investing.

The growth in tablets (and the iPad in particular), which can significantly improve the mobile Web-browsing experience, also suggests mobile Web-based display ads have an important role to play. (At The Telegraph Media Group here in London, for instance, more than 50% of our mobile Web users now come via the Safari/Apple browser).

So, plan your strategy and realise the benefit of both in-app ads as well as display ads and build your plans around this. There is not a panacea; we all must work on a model that suits our own marketplace. However, both display and in-app offer increasingly powerful but different ways to target our newsmedia audiences. When combined, a global model seems to be emerging that offers maximium ROI.

It’s all worth a further look wherever you are and will be time well spent.

Footnote: Tablets and the Google Nexus 7.

Tablets are increasing at a tremendous rate, given the superior experience offered by the larger screen and functionality. The latest device to hit my desk is the new Google Nexus 7 tablet. In the UK they start from only £159 ($200 in the US) for the 8 gigabyte version, and with its super-fast, quad-core processor (twice the speed of an iPad), it gives impressive performance. It is a smaller tablet device (like a Kindle Fire) and therefore offers limited use for serious business viewing, writing, and analysis. However, for many people it offers a great entertainment package and most of what they would want from a tablet device.

With the Kindle Fire and the Barnes & Noble Nook, both launching in the UK this year, plus a possible “mini iPad” (still to be confirmed by Apple), there’s a bloodbath on the high streets coming as the competition heats up! (Personally, I feel that if Apple does announce a mini-iPad, they’ll dominate the smaller tablet device market, (in the same way they have done with the iPad). Such is the elegance, functionality, and premium feel that the iPad affords and which will no doubt extend itself to a smaller version. But we’ll see...)