“We’ve entered a new era of advertising, where mobile is a critical component to successful campaigns,” Sean Galligan, vice president and industry lead for entertainment at Yahoo, told Marketing Dive, a Retail Dive sister publication. In fact, the industry is seeing a trend not only toward mobile-first, but one with mobile app install ads taking center stage.

Mobile app install ads are on the rise according to eMarketer research, and are expected to reach $3 billion this year, accounting for 10.4% of mobile ad dollars and representing an 80% year-over-year increase. 

Retailers have been focusing on the mobile app, although some still struggle to encourage shoppers to download and use their branded app on their phones. According to a study from Forrester, mobile users who have used their phones for at least one retail purpose only allocated about 5% of their time spent in apps to retailer apps. 13% of people that have downloaded a retail app said that they never used them. 

“For one thing, in Q2 of 2015, U.S. consumers spent, on average, three hours and 40 minutes per day on their mobile devices and 90% of users’ time on mobile is currently spent in apps," Galligan said. "More brands have built app experiences to connect with these audiences, creating more competition for users’ attention. Mobile app install ads have become the key to getting in front of the right audiences at the right time, and building an audience.”

Leveraging the trend

According to Galligan, gaming brands were the early movers in mobile app install ads, but now marketers from a wide range of industries, such as travel, retail and shopping, and entertainment are successful with the ad format. Marketers are using both native advertising and native video ads to drive downloads and engagement for mobile apps.

He said, “App marketers can leverage these formats within high quality content and social experiences. In addition to driving the initial install, these ads can help increase user retention and engagement, leading to conversions and better ROI for marketers.”

Video app install ads are particularly successful because the ads show user how the app works in the video with the follow up call-to-action to install the app. Galligan said Yahoo research found consumers who download an app after watching a video use the app 40% more often and 20% longer for each session compared with other install ads.

He added that the most popular channel for mobile install apps was mobile apps because that’s where consumers spend the most time. However, Yahoo’s mobile install apps appear on a variety of channels including its mobile websites and other premium content sites, as well as Yahoo apps such as Yahoo Sports and Tumblr.

Brands taking advantage of mobile app install ads

Poshmark, SeatGeek and GSN are three brands Galligan highlighted for taking advantage of mobile app install ads to acquire and retain new app users.

“SeatGeek was looking to reach engaged fans who are passionate about attending live sports games, concerts, and theater events. Poshmark wanted to locate new users who are active on social media and are passionate about fashion, beauty, accessories and more. Lastly, GSN Games was looking to target high-value users on its most popular gaming apps,” he said.

All three brands found success with the format:

• SeatGeek saw a 133% higher return on ad spend than other marketing campaigns.
• Poshmark saw two times better ROI for mobile app install ads compared to other paid channels.
• GSN Games found that users acquired as a result of the campaign had up to 50% higher average revenue per user and up to 30% higher user retention compared to other major mobile supply sources.

What’s next with mobile app install ads?

Citing eMarketer's research about the format seeing an 80% spike in the U.S. this year, Galligan said there is “tremendous opportunity” for brands to market apps with well-crafted app install ads. He expects marketers will engage in more sophisticated data-driven optimization in the future.

“Consumers think mobile-first and spend much of their time in apps. In this new mobile landscape, it’s crucial for marketers to consider app install campaigns. It’s still early days and brands in all industries – gaming, fashion, retail, and more – can find success and drive higher engagement and ROI,” Galligan said.