BizReport May 4, 2012
by Kristina Knight

The case for in-app advertising

In-app advertising has been around for a few years now, but a funding announcement from one leader in the space may have more advertisers taking note. This week Nautic Partners invested $66 million in LifeStreet Media, a leader for in-app advertising for brands like Facebook and developers using Apple and Android systems.

According to company information LifeStreet Media has more than 200 million social and mobile app installations and has paid out more than $100 million in ad revenue to mobile and social developers. Are apps the wave of the future? I recently had the chance to chat with LifeStreet Media's CEO, Michell Weisman, about the future of apps.

Kristina: There has been an app vs. browser debate for a couple of years now. Consumers seem divided - about 40% browse the web about 40% use apps. Is one 'better' or is there room for both browser and app advertising?

Mitchell Weisman, Founder and CEO, LifeStreet Media: I'm firmly in 'the app will ultimately win' camp, whether we're talking about Facebook apps or mobile apps. In mobile, apps are easier to use because the developers optimize for those devices, whereas web developers think 'computer screen first.' Same goes for social networking sites. Facebook apps can be better than similar websites because they're socially networked. So in the very long run, while web surfing will exist in some form, it feels like a matter of time until more consumers 'replace' many websites with great social and mobile apps doing the same thing, only better.

Kristina: As 4G comes online in more areas, do you see mobile content consumption and advertising changing?

Mitchell: 4G will increase time spent on mobile devices. This means that advertising has the potential to become truly dynamic, continually improving in performance and relevance. Advertisers will be able to engage in what we call 'Iterative High Velocity Testing' of ads to continually improve them, so ads will be constantly changing and improving almost in real time. The test panel will be a thing of the past; we'll all be sample groups, by our actions and inactions with an ad informing advertisers how to reach us and resonate with us with unparalleled effectiveness.

Kristina: What trends are you seeing in in-app advertising?

Mitchell: Growth. Growing numbers of app developers are launching growing numbers of apps being used by growing numbers of consumers installing growing numbers of apps. We believe apps will become the next great advertising medium. In-app advertising can help publishers monetize their apps, and it can help generate massive numbers of new customers for advertisers. LifeStreet's focus is on in-app display-based performance advertising (which means that advertisers pay based on acquired customers, not impressions or clicks), but there are countless other opportunities, from in-app branding to commerce.