Study: APAC programmatic mobile in-app advertising spikes with 4 key investment areas

Many consumers have made their mobile devices a primary digital interface and in response, advertisers are allocating more budget toward the mobile channel and looking to in-app opportunities. As advertising budgets in APAC shift towards digital media, mobile in-app has emerged as the preferred digital channel, securing the highest percentage of budget allocation over the next 12 months – 20% versus 17% for mobile web, 16% for connected TV (CTV) and 15% for desktop.

Within this channel, buyers are increasingly embracing programmatic as a critical part of media plans. The study titled "The state of programmatic in-app advertising in APAC" commissioned by PubMatic and done by Forrester, found that 80% of APAC advertisers and media buyers use programmatic in-app advertising in digital media plans frequently or every time. Although direct-buy in-app is still the channel receiving the highest budget allocation, due to higher cost of inventory, programmatic in-app receives the second-largest budget allocation and is more frequently used in a clients’ digital media plan.

Increasingly, this spend is being used to drive longer-term goals such as brand alignment and customer engagement. According to the study, APAC advertisers reported their top reasons to invest in programmatic in-app are:
• To extend reach – 74%
• Better customer engagement – 73%
• Advertising buying efficiency – 73%
• Brand alignment – 72%

The study added that 81% of China-based advertisers are investing in in-app advertising for brand alignment versus an APAC average of 72%. Overall, advertisers allocate 53% of budgets towards branding on average.

The research also showed sustained growth requires both short-term revenue-generating marketing objectives as well as long-term brand-building objectives. However, market forces such as the pandemic, have propelled brands into decisions that favour short-term goals such as driving sales conversion at the cost of long-term goals such as building brand affinity and increasing customer lifetime value.

As budgets shift to branding, in-app video advertising KPIs with a long-term orientation such as brand awareness and brand affinity are becoming more widely used.

What type of content are marketers spending on?

According to the research, programmatic video advertising has been growing faster than programmatic banner advertising globally. Within programmatic video, connected TV (CTV) is growing fastest, while mobile remains the primary driver of programmatic video spend and currently captures three times more spend than CTV.

When asked about in-app advertising budget allocations, APAC media buyers are allocating most toward social media. However, in-app video, outside of social media, emerges as the second-most popular ad type.

In Indonesia, 79% of advertisers are investing in in-app video advertising for brand alignment versus an APAC average of 72%.

Challenges advertisers face

Despite the benefits of programmatic in-app advertising, some challenges remain for advertisers. In particular, advertisers have concerns around data privacy and targeting:
• 39% have concerns about data privacy limiting data collection
• 37% have concerns about the impact of IDFA changes on optimisation
• 36% have concerns about effective targeting

Advertisers are looking to the sell-side to alleviate some of these challenges – with 57% reporting access to publisher data as a key selection criterion when choosing publishers to work with. Sell-side platforms (SSPs) have an important role to play in delivering this access.

“The findings from this study are consistent with our perspective that the opportunity for programmatic in-app is enormous for both media buyers and developers. Programmatic mobile in-app is becoming an increasingly important branding channel and one that advertisers shouldn’t ignore,” said Lashanne Phang, director, publisher development, Southeast Asia, Greater China and Korea, and Mobile App (APAC) at PubMatic.

“Mobile app publishers and developers should take steps to ensure they’re capturing this brand spend. Given that the challenges raised by advertisers are focused on data privacy and targeting, app developers should consider working with an SSP with strong targeting capabilities, that also understands regional and global data privacy regulations.”

In this study commissioned by PubMatic, Forrester conducted an online survey of 472 respondents from China, Singapore, India, Japan, Indonesia, South Korea, Thailand, and Vietnam. Survey participants were advertising decision-makers with responsibility for mobile media buying. The study began in September 2021 and was completed in November 2021.

Photo courtesy: 123RF

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