In-app advertising has evolved from a niche channel into a core driver of digital growth, sitting at the intersection of programmatic buying, omnichannel strategy, and measurable e-commerce outcomes.
As Neil Kettleborough, Global CEO & Co-Founder of AppIQ, explains, its real value lies in delivering scale, relevance, and accountability together, removing the guesswork from performance. This article aims to give decision-makers a clear, practical view of the in-app advertising landscape, focusing on real-world application over theory. Rather than just sharing market data, it’s designed to help readers build smarter, results-led strategies with content that genuinely adds value.
The in-app advertising sector is seeing rapid and sustained global growth. Rising smartphone usage, increased reliance on mobile apps, and the expansion of digital commerce are driving consistent year-on-year increases in in-app ad spend. This growth isn’t a short-term spike—it reflects a long-term shift in how and where consumers engage with digital content.
Key market indicators show strong momentum:
Market growth (2024–2028): USD 338.3 billion, reflecting sustained investment from brands seeking measurable performance and scalable reach across mobile-first environments.
Forecast CAGR: 26.06%, highlighting how quickly in-app advertising is outpacing many other digital channels in terms of adoption and spend growth.
Year-on-year growth (2023–2024): 21.63%, demonstrating that momentum is accelerating rather than slowing.
What Is In-App Advertising?
Mobile apps often place ads directly within the user experience - appearing while people are messaging, gaming, shopping, or consuming content - allowing brands to reach users at moments of high engagement. Compared to mobile web ads, in-app advertising delivers richer data signals and stronger user attention. This makes it a powerful channel for improving brand visibility, measuring ad performance more accurately, and driving deeper brand engagement.
How Does In-App Advertising Work?
In-app advertising is powered by automated technology that delivers ads in real time. Ads are selected and served based on user behaviour, context, and intent signals, forming the backbone of a modern programmatic advertising strategy. This allows brands to react instantly to user actions rather than relying on delayed reporting.
The process typically follows a clear structure:
Advertisers bid for impressions using programmatic platforms, defining goals such as installs, purchases, or engagement.
Ads are matched to users inside apps through real-time bidding, ensuring relevance now of delivery.
Performance is measured using metrics like conversions, retention, and lifetime value to guide optimisation.
Why Is the Market Growing So Fast?
The primary driver of growth is the global rise in smartphone usage. Mobile apps now account for most of the digital time spent, shaping today’s mobile in-app advertising trends. Consumers increasingly rely on apps for communication, entertainment, and shopping.
Additional factors supporting growth include:
The expansion of in-app purchases and subscription-based business models, which create natural moments for advertising.
Improvements in programmatic technology that allow better targeting and real-time optimisation.
Increased demand from brands for privacy-aware, measurable media environments.
This combination of behaviour, technology, and demand explains why in-app advertising continues to attract investment.
How Big Will the In-App Advertising Market Be?
The in-app advertising market is expected to grow by USD 338.3 billion between 2024 and 2028, with a compound annual growth rate of 26.06%. These figures reflect a structural shift rather than a temporary spike. As cookies decline and privacy regulations tighten, brands are reallocating budgets toward app-based environments. This makes in-app advertising one of the most resilient areas of digital media investment over the next five years.
How Is the In-App Advertising Market Segmented?
The market is divided into clear segments that help advertisers align strategy with user behaviour. Understanding these segments is critical for planning budgets and selecting formats.
By Application
Messaging apps, which benefit from high daily usage and repeated engagement throughout the day.
Online shopping apps, where ads can directly influence purchase decisions and basket size.
Gaming and entertainment apps, which deliver strong engagement and rewarded ad opportunities.
By Ad Type
Banner ads, which offer scale but require careful placement and creative discipline.
Interstitial and video ads, which deliver higher impact when timed correctly within the user journey.
Native and rich media ads, designed to blend into the app experience and reduce disruption.
Suggested visual: Segmentation matrix by application and ad format.
Why Are Messaging Apps Growing So Quickly?
In-app advertising is gaining strong momentum within messaging apps, driven by high daily usage and strong user trust in these platforms. When ads feel native to the messaging experience, they typically perform better than more intrusive formats, making messaging apps a highly effective in-app advertising environment.
Key reasons for growth include:
Users open messaging apps multiple times per day, creating repeated exposure opportunities.
Formats such as sponsored messages and chatbots integrate naturally into conversations.
Brands can achieve strong engagement without disrupting the user experience.
The messaging segment alone was valued at USD 19.6 billion and continues to expand steadily.
What Ad Formats Perform Best Inside Apps?
Performance varies by objective, but some formats consistently deliver strong results. The most successful formats respect the user experience while offering clear value.
High-performing formats include:
Rewarded video ads, which exchange value for attention and support retention and engagement.
Native ads, which blend seamlessly into content and build trust over time.
Video and rich media ads, which allow brands to tell stronger stories and drive action.
Banner ads still generate scale, but require careful optimisation to avoid fatigue, supported by ongoing programmatic ad optimisation.
Regional Insight: Why Does North America Lead?
North America accounts for approximately 41% of global in-app advertising growth. This leadership is driven by a mature digital ecosystem and high smartphone penetration.
Key contributing factors include:
Average daily mobile usage of around three hours per user.
Strong adoption of programmatic buying and advanced measurement tools.
Early adoption of new ad formats and privacy-led solutions.
For global brands, North America often serves as a testing ground before international expansion.
What Are the Key Benefits of In-App Advertising?
When executed correctly, in-app advertising delivers clear business value. It allows brands to move beyond awareness and focus on outcomes that matter.
Key benefits include:
Precise audience targeting based on behaviour and context rather than assumptions.
Real-time optimisation and reporting that support faster decision-making.
Strong attribution models that connect media spend to revenue.
Neil Kettleborough regularly stresses that in-app advertising works best when it supports business outcomes, not just impressions, and should sit alongside wider performance marketing strategies.
Pros and Cons of In-App Advertising
Every channel has strengths and limitations. Understanding both sides helps brands plan realistically.
Pros
High engagement driven by frequent app usage and immersive formats.
Scalable reach through automation and programmatic buying.
Strong alignment with performance and growth-focused objectives.
Cons
Poor frequency control can damage user retention and brand trust.
Ad-blocking and privacy controls can limit reach in some environments.
Creative fatigue occurs quickly without testing and refresh cycles.
What Common Mistakes Should Advertisers Avoid?
Many brands fail to unlock full value due to execution mistakes rather than strategy flaws. These errors are avoidable with the right approach.
Common mistakes include:
Overloading users with ads instead of focusing on relevance and timing.
Ignoring creative testing and relying on a single message.
Measuring success by clicks rather than conversions and lifetime value.
In-app advertising should always help users. Visibility without value leads to waste spend.
Tools Used and Measurable Results
Successful in-app advertising relies on a well-integrated technology stack. Tools must support transparency, optimisation, and accurate measurement.
Commonly used tools include:
Demand-side platforms and ad mediation solutions for efficient buying.
Attribution and analytics platforms to measure real outcomes.
Creative testing tools to improve performance over time.
When applied correctly, brands often see conversion rate improvements of over 18% and rapid adoption of automated buying models.
How Are Privacy Rules Shaping the Market?
Privacy regulations such as GDPR, COPPA, and recent iOS updates have reshaped in-app advertising. Data usage is now governed by consent and transparency.
This shift has encouraged:
Greater use of contextual targeting and aggregated data.
Stronger focus on first-party data strategies.
Better alignment between user trust and performance goals.
According to Neil Kettleborough, privacy is not a limitation when strategy and technology are aligned.
Competitive Landscape
The in-app advertising market remains fragmented, with competition driven by innovation and partnerships. No single player dominates every segment.
Key characteristics of the landscape include:
Large platforms offering scale and infrastructure.
Specialist ad tech firms focusing on performance and transparency.
Regional players addressing local market needs.
Success depends on data quality, user experience, and measurable outcomes.
Final Thoughts
In-app advertising is no longer optional for growth-focused brands. It is a foundational channel for modern digital strategy.
For businesses seeking scale, accountability, and long-term performance, the opportunity is clear.
As Neil Kettleborough, Global CEO & Co-Founder of AppIQ, Global consistently demonstrates, success comes from using in-app advertising to solve real business problems rather than chasing rankings alone.