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Shifting to native ads and reduced reliance on banners could push more users to ditching ad blocking tools and eventually engage with sponsor messages

The rumors of the demise of banner ads have been greatly exaggerated. According to a report published by China based ad tech company Vpon, mobile advertising in the Asia Pacific region still overwhelmingly relies on banner ads. In a report published earlier this month, Vpon claims that nearly 77 per cent of all mobile ads in APAC are banners. Native ads come a distant second at 11 per cent while interstitial and video ads record a share of 10 and 2 per cent respectively. Video ads on Youtube were not included in the survey.

The report has a number of interesting takeaways about the internet consumption patterns among various countries in APAC. Across APAC, the mobile advertising inventory is shared almost equally between mobile apps (51 per cent) and the mobile web (49 per cent). However, the difference between the two is quite stark in individual countries. In Indonesia for instance, nearly 91 per cent of all ads were over mobile apps while in India, this figure stood at 70 per cent. At the other end of the spectrum is Japan where only 18 per cent of ads were served over mobile apps. China and Taiwan are diametrically opposite to each other in this aspect. 61 per cent of Chinese mobile ads were served on the mobile apps where an equal percent of ads were served on the mobile web in Taiwan.

Also read: 10 trends that will shape up the future of mobile ads and marketing

Not surprisingly, India, Japan and China were the top three mobile ad markets. What’s interesting however is the China’s share of overall biddable inventory is just over a third of the inventory from India. India’s share of the inventory stood at 27.3 per cent while those of Japan and China were 23.3 and 10.4 per cent respectively.

The study also shows the dominance of Android over iOS in emerging markets like India and Indonesia where Android’s share was measured at close to 93%. In contrast, iOS was dominant in China, Australia and New Zealand and the share of the mobile OS market here stood at 56, 65 and 65 per cent, respectively.

Banners are data guzzlers

The fact that banners are still the predominant medium to advertise is bad news for the digital marketing ecosystem. Unlike traditional desktop internet where users view banner and interstitial ads are mere annoyances, they are seen as data-guzzlers and are hence extremely detested among mobile subscribers.

According to one study, nearly 122 million users in India today use mobile browsers with in-built ad-blocking software. For perspective, an IAMAI study pegged the total number of mobile internet users in the country at 371 million. Across APAC, close to 36 per cent of mobile browsing came with native ad blockers. One study in March 2016 found that APAC had 55 per cent of the global smartphone users while contributing to nearly 93 per cent of mobile ad-blocking software usage.

Also read: Advertising, content and the future of the internet

Advertisers desperately need returns from their advertising investments in order for the ecosystem to sustain. That can only happen if advertisers shift to alternate channels of advertising. The Vpon report pegs the share of native ads at 11 per cent. This includes the likes of promoted tweets and sponsored messages on Facebook and Instagram.

Native ads are more engaging

Unlike banner ads that could potentially guzzle expensive mobile data, native ads are integrated within these social networking platforms and only consume as much data as those posts from your friends and family consume. Additionally, advertisers, at least those in established markets like the US, report a vastly higher engagement from their native ads on these platforms. On Instagram for instance, studies have shown that nearly 75 per centof users take action after viewing a post. A sustained focus on native ads combined with a drop in reliance on banners could push more users to ditching ad blocking tools and eventually engage with sponsor messages.

Asia Pacific is expected to see an 8 per cent annual growth in mobile internet users over the next several years. That translates into millions of new users. For the ecosystem to sustain, it is important for advertisers to take a long-term view and shift to expensive, but more profitable channels that these users won’t mind engaging with. That is the only way advertising will continue to be a profitable marketing and monetization channel for the advertisers and publishers respectively.

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