Ad fraud is expected to cost brands over $16 billion this year. The industry is on edge, and brand safety is a top concern. This is especially true after Fortune 500 advertisers discovered their ads appearing next to inappropriate content on Google’s Youtube.

The industry has been working on solutions to curb ad fraud and increase brand safety, and yet the problem grows each year. In 2017, ad fraud may grow by 30%. All this has made in-app inventory valuable real estate because it protects brands from ad fraud while providing the direct access to their customers.

The Wild Wild West

Bots are a big source of ad fraud, having plagued digital advertising since its inception. These applications perform automated tasks out of plain sight and can spread like a virus. Malicious bots are created to mimic people navigating web and mobile web content, e.g. visiting websites, clicking on links, watching videos, and downloading content. Recently, a bot attack was used to falsify around 300 million video ad views per day, costing advertisers millions of dollars.

A Brand-Friendly Solution

Brands are chasing their audiences into your apps. Consumers spend over 90% of their mobile time using applications, and it is a perfect environment for brands to build meaningful relationships. People are also less reluctant to share location information (one of the most important data points for brands) in-app because the “value exchange” equation is favorable to them. For example, you are likely to share location information when you want to know the weather, find a restaurant in your area, call an Uber, or receive local news.

More importantly, apps are safe. Anyone can launch a website, but not everyone can launch or keep an app in the Google Play or Apple App Stores. In fact, some 46% of App Store submissions are rejected. Apple reviews each and every app submission before it goes live. And while Google doesn’t review apps before they launch, apps are quickly removed for violating Google’s content policies. In fact in May 2017, Google, with one click of a button, removed over 40 apps from the Google Play store for perpetrating ad fraud including forcing users to click on ads. Apple and Google also control how data is collected and used for advertising. This all adds up to an extra layer of brand security.

What’s even better for developers is that in-app revenue is 13X higher than mobile web ads, and it produces 2x the CTR. There’s also a wide variety of app inventory from gaming to news, social networking, and entertainment. And news and information apps produce the largest volume of ad impressions with nearly one in four impression served in this category.

App developers are embracing branded content and building their apps to better support more engaging placements. Best-in-class apps are also integrating SDKs (3rd party “software development kits” providing advanced functionality), which provide brands with additional insight into users and can be used to personalize ads. SDKs can also give brands greater creative flexibility in selecting interactive ad formats like VPAID and MRAID.

Before adding a plethora of ad formats to your app, consider that not all ads are created equal. 71% of people say at least half of the ads they see disrupt their mobile experiences. Enter rewarded video. Consumers prefer it almost 2 to 1 to other digital formats, and a staggering 80% of people opt-in to interact with them. Not to mention, rewarded video can increase user retention and lead to in-app purchases. Brands like them because they are non-interruptive, full-screen, resistant to ad fraud, and provide greater engagement potential.

The App Payoff

App developers, get ready for a multi-billion dollar brand windfall. In-app ad revenue is expected to top $53.4bn by 2020. Brands are heavily investing in reaching consumers through in-app inventory because these environments provide brand safety, high engagement, and because consumers are spending more of their leisure time in-app than ever before.

In order to maximize your revenue potential, consider implementing rewarded video placements to attract brand ads, and not solely relying on CPI user-acquisition offers that send your users away. These units are available on iOS and Android and will open you up to a new revenue stream from the biggest brands in the world.

Also read:  The Do’s and Don’t of Spam