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Get Ready for Mobile In-App Ads

  |  March 25, 2011   |  Comments   |  

Most smartphone users don't pay for apps in China. If you're planning to do in-app advertising, consider these factors.

This year is good for mobile applications development. App developers are experiencing big opportunities as well as challenges, according to an AdMob report in 2010. There were around 22 percent of iPhone users and up to 49 percent Android phone users that never downloaded any paid apps globally. I assume the situation is worse in China.

Both Apple iTunes and Android market have not officially launched in China. And, there are more than a dozen app stores in the market: Mobile Market by China Mobile, Wo store by China Unicom, Tianyi Space by China Telecom, and one for each mobile phone manufacturer such as HTC, Motorola, Nokia, Lenovo, plus the famous 91 assistant that provides apps for iPhone free of charge. The revenue share eco-system in China is pretty complicated. And generally, Chinese consumers have no intent to download paid content.

So how does an app developer survive if it cannot rely on the paid model in China? Since 2010, the demand for in-app ad serving has created a lot of start-up companies. However, brands have shown great interest as well as concern.

These are questions we often get:

1. Where will my ads be served? Is there any media/app list to verify?

Brands want to know where their ad budget goes. But a question like this usually leads to disappointment, such as, I don't know much about the apps you listed in your network, is there any famous ones, like Vogue or iWeekly? What we would have to always explain is - when you invest in mobile in-app ads, you are targeting smartphone users and app downloaders. They are audience segments that can afford an expensive phone and have leisure time to play apps at the moment when your ads reach them. You are targeting users. Whether they are on a Tomcat app or a not so famous app doesn't really change who they are, isn't it? Media (here means the name of the app) is not the key point here when you do in-app ads.

And of course you can advertise on Vogue's app or even CNN's app, but that concept is not really the same as mobile in-app ad serving. Most likely, it would be a tailor made solution or a sponsorship package to work with this type of publication's app to ensure the visual creative rather than just place a banner or text link there.

2. What is the ad format? Can it be more creative or interactive?

Normally text links and banners are the most common formats that will appear to the consumer. And some apps (when applying a certain ad SDK) are canvas or full screen ad enabled. A traditional way is when a user clicks onto the ad and it will require opening a new browser to the campaign page or activate a new download. However, as you can imagine, users do not want to be interrupted when they are opening an app. Ads are fine if they are relevant or interesting, but people want to stay where they begin.

To solve this problem, HTML5 provides a great solution. Save the technical explanation of what is HTML5, all we need to know is without downloading a new app, without opening a new browser, a HTML5 ad enables a user to have an app-like experience such as watching a HD video, a full list of menu, and interactive functions that are associated with hardware modules such as motion sensor (like you can shake it), microphone sensor (like you can blow it) or camera, GPS, and so on. During the ad presentation, the user can close it anytime by clicking/touching the close button and continue using the original app. So from both a user experience and branding expression, HTML5 is a killer implementation.

When brand advertisers plan an in-app ad campaign, they must be realistic.

- In-app ads are hot but the penetration of smartphone users is less than 30 percent (DCCI 2011). In-app ads are a good way to target high-end consumers or promote a branded app but a browser-based mobile page carries a much bigger user base so we should not ignore the ad value on mobile websites as well.

- In China, 3G smartphone penetration is much higher than 3G mobile subscriptions. When we decide to do a HTML5 ad or any in-app ad featuring more than a few interactions, we have to consider the network connection. Serve these kinds of big size ads to only users who are using a 3G or Wi-Fi network and leave the basic format (banners) to those who are on 2.5G networks to ensure a better user experience.

It is exciting that there are new technology and marketing trends emerging in mobile every day. Mobile in-app ads still have a long way to go and we are expecting to see some really cool campaigns based on HTML5 in China this year.

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Joshua  Maa

Joshua Maa is founder and CEO of Madhouse, China's largest and most intelligent mobile ad network, with offices in Shanghai, Beijing, and Guangzhou. Joshua is founding member and board director of Mobile Marketing Association, Asia-Pacific region, and co-chair of Global Mobile Advertising Committee. The committee developed mobile advertising guidelines that have been widely applied by most global mobile advertising players. Before founding Madhouse, Joshua Maa was EVP at TOM Online, where he managed the wireless business and operations, plus the international business evelopment teams. He ahelped TOM become the largest wireless value-added service provider by revenue in China in 2005. Before TOM Online, Joshua was founding CEO of Rock Mobile Corp., greater China's leading mobile music entertainment service provider. Joshua has over 18 years of managerial experience in greater China?s new media, entertainment, and consumer marketing industries.

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