For many years, ecommerce companies prioritized advertising on the web because it provided significant control over ad targeting, and it was relatively easy to place ads alongside content likely to attract their target audience.
Meanwhile, mobile apps have historically had some problems. High ad exchange rates (around 20%) and higher funnel goals — around cost per mille (CPM) and cost per click (CPC), instead of lower funnel conversion metrics like cost per acquisition (CPA). As a result, a CPM- or CPC-based mobile app campaign might generate hundreds of thousands of impressions or clicks but provide no conversion guarantees.
Thankfully, times have changed. Now, there are several tailwinds that are making the mobile environment much more enticing for those ecommerce companies, leading many today to invest in in-app advertising. Here’s why:
The Explosion of Ecommerce Apps
Ecommerce apps have grown in importance for consumers and the companies they buy from. For those companies that have launched ecommerce apps, there’s a stronger pull to use mobile advertising over the web because of the ease of installing the app directly on the mobile device. The top 1000 retailers that had dedicated apps experienced a 7.4% sales increase in 2024, while those retailers without apps only grew 4.2%, according to DigitalCommerce360.
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The Expansion of Gaming Audiences
Though gaming once seemed niche, its audiences are now diverse and massive — spanning all ages and interests. According to the Electronic Software Association, the average video game player is 36 years old. 60% of adults, nearly half of Boomers, and 36% of the Silent Generation all play video games every week. In addition, 47% of women play video games. Wherever you look, you will find a gamer.
For almost any target demographic, there’s a high probability that someone can be reached through in-app game advertising, a fertile ground for ecommerce brands eager to connect with fresh customer segments.
Better Ad Formats and Targeting
One big advantage mobile developers have over their web colleagues is the breadth of ad formats, creating many appealing ways to present high-impact in-app ads — many of which are unavailable on the web.
For example, game developers can offer 100% full-screen ads with dynamic creative optimization that can target different users with slightly different versions of an ad. Meanwhile, a web ad typically takes the form of a banner, which occupies maybe 5% of the screen at best.
In the ecommerce space, advertisers can incentivize users with a rewarded video followed by a dynamic end card featuring some of the products the user has shown an interest in. Furthermore, advertisers can layer a promotion code on top within the endcard for users to claim and spend.
Considering how prevalently ads for other mobile games feature in in-app spots, the novelty of an ecommerce advertisement can cut through in a saturated environment.
Performance-Driven, Advertiser-Friendly Models
In-app marketing economics also have become more appealing from an advertiser’s perspective. Now, advertisers can work directly with companies to access premium inventory more cost-effectively than was once possible.
Better Buying Models
Most in-app ad networks have shifted from fixed CPM and CPC buying models toward performance-driven ones like cost per event (CPE) and return on ad spend (ROAS). These models reassure advertisers that they only pay for desired outcomes rather than impressions or clicks.
Using a restaurant as an analogy, CPM merely means people are aware of your restaurant, CPC means they know where it is, CPE means they’ve shown up to eat, and ROAS means they have ordered your tasting menu. Which of these would you rather pay for to guarantee a result?
Mobile ad networks’ algorithms are now designed to be as efficient as possible in achieving the KPI, whether that be a Target CPE (for example, $25 per conversion) or Target ROAS (for example, $3 returned for every $1 spent).
Advertisers pay for performance and outcomes in this new way of cooperation. This is why in-app advertising is highly appealing to e-commerce companies.
A Win-Win Opportunity
As early adopters see success, the migration from web-based to in-app advertising is poised to accelerate, heralding a new era when mobile apps — especially games — play a central role in ecommerce growth strategies. Emarketer has said that mobile commerce made up nearly 45% of all U.S. ecommerce in 2024.
For ecommerce advertisers, in-app channels offer powerful new avenues to acquire and re-engage customers, underpinned by better formats, deeper targeting and predictable returns. For developers, the influx of these ad dollars represents a lucrative opportunity and can also help retain customers. Deloitte found that 72% of gamers are likely to keep playing if they’re exposed to high-quality ads. Ultimately, the in-app ecosystem is a boon to ecommerce advertisers, which have a wider array of units to choose from and can pay for actual conversions, all while making it easier for consumers to download their apps and get the products they want, all from their mobile device.
Jeff Sue is the General Manager, Americas at Mintegral, a leading advertising platform dedicated to helping businesses grow globally. In his role, he brings over 15 years of business development experience, scaling existing businesses as well as going from 0 to 1, creating a brand presence, and attracting early customers. Before joining Mintegral, Sue held business development roles at Fyber, FusePowered and HyprMX. These businesses had great teams and leadership and were all ultimately acquired.
