Why developers and marketers are bullish on the mobile-app ad

Mobile marketers have struggled to find an ad unit that leads to conversions, not just fat-finger clicks.

But the mobile app-install ad - an ad that directs users to download a mobile app - finally offers measurable and impressive ROI. Facebook was the first major pioneer of this ad, and since its debut, Yahoo, Twitter, and Google have all launched their own version of this ad unit.

The ads are popular among developers who need their apps to stand out among the millions of mobile apps on the Google Play and the Apple app stores. And, for major mobile platforms, these ads command high prices that make them very attractive inventory.

New and exclusive data from BI Intelligence finds that US mobile app-install ad revenue will top $4.6 billion this year and grow to $6.8 billion by the end of 2019, increasing by a compound annual growth rate of 14% from 2014. We believe mobile app install ads accounted for about 30% of mobile ad revenue last year.

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Here are some of the key takeaways:

• Mobile app-install ads are becoming extremely popular ad units among different types of app publishers, not just game-app developers. App marketers - including e-commerce companies and a few brands - like these ads because they result in significant downloads and measurable ROI. Social networks and ad exchanges like them because they can sell the units at significantly higher prices than other ads.
• Easy-to-measure ROI drives demand. In many cases, once an app-install ad generates a download, everything a customer does in the app, such as "lifetime customer value," can be attributed back to that specific ad.
• On Facebook, mobile app-install ads cost significantly more than standard units, due to performance and targeting capabilities. The report includes CPM pricing and CTR rates compared to the average Facebook ad.
  
• Prices will hold relatively steady as supply and demand rise in tandem. The mobile install ad is a fairly mature ad unit at this point, and a good deal of competing supply is now available from Twitter and Google. But continued increases in demand for these ads among app marketers will keep prices from declining.
• Top mobile publishers and ad networks are competing fiercely for mobile app-install ad dollars, and for the favor of app developers. Twitter and Facebook are doing their best to lure app builders to their platforms and app-install ads with advanced ad analytics and developer tools.

The report is full of charts, data, and case studies that can easily be downloaded and put to use.

In full, the report:

• Forecasts spending on mobile app-install ads in the US over the next five years
• Puts total revenue in context of mobile ad spend and Facebook mobile ad spend
• Analyzes how mobile-app install ads are priced and bought, and looks at how pricing and performance trends have changed over time
• Highlights the mobile app-install ad units available from major players like Facebook, Twitter, Yahoo, and Google
• Examines the different types of marketers that have put the ad format to use

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