Customer Experience in Times of AI and In-App Video Advertising

Andesh Bhatti Dec 29, 2017

Technology is changing the way we live, buy and consume. We are surrounded today with cool apps that are redefining convenience. According to reports, India is currently the second largest smart phone market in the world. This smart hand-held device has become an essential part of our life. For a user the changes that smartphones have made to their life has been gradual and subtle. But for the world of advertising the opportunities haven’t been as subtle and, instead, have come at an incredible pace.

With the app ecosystem seeing growth, the role of in-app mobile advertising has changed. For a long time, App developers preferred a ‘pay once and play’ model where user would enjoy unlimited access. But with the rise of free-to-download apps in the market, brands needed new revenue models. This is what prompted the growth of in-app advertising and purchases of goods and services. It now contributes to 72 percent of all total mobile ad spend globally.

2016-17 have been the years of foundation for the in-app advertising market. This mobile advertising trend is reflecting the exponential growth of users who are completely dependent on these devices. According to reports, Q1 2017 was a record-breaking quarter for app stores, with 15 percent download growth year-to-year globally. All told, there were 25 billion downloads in Q1 of this year. Consumer spending on and within apps was $15 billion in Q1 2017, representing 45 percent year-to-year growth.

Why in-app ads work

One of the major reason why in-app advertising works, is because it brings in the relevancy model and is enhanced by location data, which is the first step in understanding context and increasing engagement. The smartphone is getting much smarter and brands understand that there is a need to shift to a mobile-first world. This causes them to create strategies which focus specifically on this channel.

Customer Experience (CX) to be more engaging with the advent of AI and In-App video advertising

In-app Video has taken up position as the leader of mobile advertising today. Driven by a demand from users for convenient access to engaging content and the need for unobtrusive ads, the popularity of video is dependent on marketers consistently delivering value with their content. Video advertising will continue to grow on the premise that publishers maintain their adoption of the format.

Video advertising to redefine mobile advertising in 2018

Many brands have now recognized the opportunity that in-app video advertising could offer. Looking at country data, more than 60 percent of India’s internet users are mobile-only, which isn’t very surprising considering that this includes 77 percent of urban users and 92 percent of rural users. With users spending 3 hours an average per day on their mobile phones, more than 78 percent of the overall internet consumption in the country in 2016 came from mobile devices, as opposed to a meager 21 percent that was generated by desktops.

The Artificial Intelligence effect

AI has emerged as the new champ is transforming the way we live, especially the way we interact with our smartphones. Soon you will be witnessing how mobile advertisers will be automating content with the help of AI. Mobile advertisers would program their content in a way which would be more humane in nature. With AI, the power is in your hands to create rich advertising content that interacts with minimum human intervention. AI would take CX to the next level where you offer engaging interactive content, rather than a ‘one size fit all’ experience.

Native ads are likely to continue to grow as a driver of total app revenue, which will exceed $100 billion in three years. As mobile-first becomes normative in parts of the world, in-app advertising will continue to expand its reach and potential for marketers.

AI will help by 'learning' the user’s behavior to all ads, comparing it to the user’s behavior to your ad, and then help you define your target demographics with a better focus. What’s more, there are various ways today for in-app advertising to deliver user data and audience targeting back to its advertisers. Also with mobile continuing to influence and shape consumer behaviour across the generations, expectations for seamless digital experiences will also continue to increase. As its functionality evolves, we’ll likely see even more adoption of in-app advertising.