Mobile ads today make up less than one percent of all money spent on media advertising, and a poll just out from Harris Interactive, commissioned by Pontiflex, could go some way to explain why at least some mobile formats are not inspiring much confidence among those buying ads.
According to the poll, incentive-based ads — those that offer users in-game credits or other rewards when they download the app or another piece of content being advertised in the ad — are giving little in the way of consumer use or loyalty.
Among those interacting with incentive apps, only three percent of those who have downloaded apps via the ads use those apps often. Some 37 percent said they uninstalled the apps after getting incentive, and 25 percent who kept the apps never used them again.
Equally problematic were the prospects for video ads. The survey found that among smartphone users, only seven percent of respondents said they liked video takeover ads — those that occupy your screen and require you to watch a video to continue in an app. Among tablet owners the number was a bit higher: 15 percent said they liked video takeovers.
Video ads also seem to raise other issues: some 35 percent of smartphone users and 34 percent of tablet users worried that mobile video ads were eating into their data service plans too much (regardless of whether that was actually the case). This might come as worrying news or companies like Yahoo (NSDQ: YHOO) and others which have turned attention to rich media ads in the wake of Google (NSDQ: GOOG) virtually dominating the area of mobile search ads.
However, despite these knocks, mobile ads continue to be a key revenue driver for publishers who want to offer their apps for free — especially since paid content is not proving to be popular with a majority of users: only 12 percent of smartphone owners and 24 percent of tablet owners say they would pay for apps if it meant no ads, the survey found.
For incentive ads, this is not the first bit of bad news this year: Apps that contained incentive-based ads were earlier this year banned by Apple (NSDQ: AAPL) when it emerged that such formats artificially boosted the popularity rankings of apps offered as in-ad downloads. In App Stores like Apple’s, which contain hundreds and thousands of apps, rankings really count for visibility.
Tapjoy, one of the bigger companies in the incentive ad space, is reportedly looking to sell itself to a social games player like Zynga, DeNA or Gree, according to the blog Inside Social Games. If true that could be a sign of some of the consolidation in that space.
But while the findings of the survey shed some light on what the user experience is like for some forms of mobile ads, it is slightly frustrating that Pontiflex, which commissioned the survey, did not directly ask the survey respondents about how they felt about the ad format Pontiflex sells itself.
AppLeads, as the format is called, keeps users on the app but asks them to sign up to receive further information from advertisers. It’s a format that is offered on iOS and Android platforms — CEO Zephrin Lasker says Android is “by far” the company’s biggest platform at the moment — and will likely come to Windows Phones next year.
Like incentive apps and rich-media formats like video takeovers, Pontiflex’s “cost per lead” format is also an interactive format, and if you’re going to poll user response to ads, you should ask about all the formats, not just the ones that compete with your own.
The one area that Harris polled that did touch on Pontiflex’s own business is the question of whether users prefer ads that keep them in apps or take them to websites. But in that case opinion seemed evenly split: half of tablet users chose to say in apps, while the other half like websites; 57 percent of smartphone users preferred to stay in apps.
The Harris/Pontiflex survey polled 2,800 adults in the U.S. in the month of November.