Rapid development of smart phone has led a tendency for users to switch to mobile devices instead of personal computers.  Especially when the cost of development is reduced hugely, apps are popping up and becoming the main access for mobile users to content nowadays. According to comScore, 88% of consumer mobile internet time is spent in apps, while 12% is spent browsing the mobile web. 

But when talking about mobile things, the inherit limitations of mobile phones must be taken into consideration. To name a few:

- Most importantly, the screen of mobile phone is relatively smaller, not only leaving less space for advertising, but the formats of advertising will also be limited, as multimedia like audio and video is not that available.

- There's a "digital gap" among smart phone users, which means the usage differs in terms of ages, income levels, educational levels as well as occupations. Some audiences may be difficult to target, for example, elder people who are less familiar with digital devices.

- Users fragment their time on mobile devices, also multitask when using. It is becoming harder to draw their attention, while attention actually brings monetization.

Considering these limitations, the business value of mobile devices advertising is thought lower than pc internet advertising, however in my opinion, the mobile advertising has huge potential especially in the case of in-app advertising.

Firstly, the benefit of small screens means more �concentration, users focus on the limited space when looking at the screen.In contrast people can totally ignore ads when browsing websites on pc, it is more likely for ads to be seen on mobile phones.

Secondly, the �fragmentation of time consuming may bring long-tail effect. According to previous research, people nowadays use phones every 6 minutes, we use phone to communicate, to access information, to entertain, etc. So mobile phone is a good way for advertisers constantly reach their audiences.

Lastly, personally I think mobile phone, especially app, is a great place for advertising:

- App themselves, can be good format of native ads, for instance, some brand has develop their apps as tools to reach publics, as well as convey brand image and updating brand information, like Nike+, Starbucks, etc. 

- As mobile devices are much more private, content can be more customized, regarding to different preferences. Thus companies can develop targeted ads, making them part of the content.

- Most people have their social networks and instant messaging apps on their mobile phones, so it would be more convenient for them to communicate and share information of products. Making well use of users' social network may create good word-of-mouth.

There are some thoughts based on observation about how to create in-app advertisements.

Relate the ads to the ongoing events.

Yesterday when I search for my favorable band on Xiami app, I was so surprised to find that the app informed me that it is on tour, and led me directly to the ticket-booking website (the advertiser). I used to ignore and hate ads, however this one is exactly what I want, and I even started searching and exploring in the app -- how about other bands, are they on tour too? 

A smart way to advertise, right? And it may create high conversion rate, moreover, when it relate to the functions such as “ like”, "subscribe", apps can push notifications to their consumers, attracting them to click on.

Geo-Targeted Advertising

 A few days ago when I hung out with my friends in Mongkok, I received a push notification informing me that there is a shopping mall on sale, I found it interesting and discussed with my friend. 

Thanks to the GPS, ads can target users by their specific location, displaying ads that are geographic and contextually optimized. Businesses can make on-the-fly tweaks to campaigns based on the demographic and personal preferences of users, and what works in that particular geographic location. Effective ads including sending coupons, other users' comments, and helping users find the location, etc.

Becoming part of the app

Sometimes ad may not occupy the screen space, trying to trick you to click on it. Instead, it can be part of the app, and I think it is the really useful way because you see it constantly, the image of the brand has been implanted in your mind without your awareness. I used a weather-forecasting app before, everyday I open the app, I could see the app mascot on the first screen with a bottle of drink in its hand. After a long period of time, when I think about the app and the character, that bottle of drink pops into my mind. This kind of advertising may be costing and limited in resource, however it is somewhat effective, cause it successfully implant the brand image without disturbing the users. 

For mobile games, this kind of advertising is actually not a new thing. But for other kind of apps, content and ads are still separated. Nowadays many apps are trying to personate their brand and create brand mascot. And this can be a start for ads becoming part of apps. However, apps should be really cautious about the advertiser selection and choose the brand that are most related to the app.

Right placement

1. Avoiding creating false floors that inaccurately signal the end of content and cause users to miss helpful information. 

Some apps, especially these display information in a stream flow, usually place ads on a false floor, creating the “illusion of completeness”. A wrong-placed advertisement can signal to users that they have reached the end of the page's relevant content. For example, when I use Openrice to search for restaurants nearby, the big ad just occupies the bottom of my screen and I feel like I've finished my searching, however, under the ad there is a lot information that was hidden. 

2. Avoiding placement that user constantly click on 

I have seen an report, saying that Ads on mobile apps perform better Click-Through Rate (CTR) than other devices. Thus In-app advertising does works. However I was pretty doubtful about this data: Does clicks really mean anything? How to identify that users click ads because they are attractive, or, just because they are placed on somewhere frequently clicked on?

Taking Openrice as an example again, when I scroll the page trying to find a restaurant, the ad often appear on where I swipe my finger, leading me to the website. However, as they always automatically open my browser, thus, I have to switch between my browser and the Openrice app. And as a consequence, every time I finish using the app, I have to open my browser, close all the pages opened before, to avoid using extra memory. 

Because of the smaller screens of mobile phones, users' actions are often limited in some specific areas, for example, the right side when scrolling the page, the upper-left corner of the screen when going back to former page. So, when placing an ad and measuring its effect (such as Click-Through Rate), take the frequently touched areas into consideration. If ads are placed on these areas, accidentally clicking may bother users, cause bad feelings of being interrupted and distrusting.

Right time

Time is another important attribute that needs to be taken into account. For most of the time, users use apps for certain reasons and to fulfill specific goals. If ads appear when users are focusing on their clear goals, ads will be much more intrusive than ever. 

Take pop-up ads as an example, Nielsen Norman Group has proved that it is the most annoying and hated ads, with 95% of users rating it as "Very Negatively" or "Negatively". However, pop-up ads are still one of the main advertising formats, especially when opening an app, or switching back to an app.

In my opinion, the time for advertising is the point whether it is disturbing or not. If the ads are not native and somewhat distracting, they should avoid appearing during the process of the key functions. Better time would be the loading time, when users have to wait for content and relatively concentrated; or after they finish their tasks, when they have more time and interest in exploring the app.

In summary, as apps may be the main access for users to obtain content, in-app advertising may become the main stream of mobile advertising. The balance between business achievements and user experience is still the main problem of this kind of advertising. However, as it may be easier to access users' characteristics and personalized preference (as many apps should be logged in), it is more feasible to target audiences, to release better format of ads, along with more costumed content.