Direct-to-consumer (D2C) brands have had game-changing success in recent years, making strategic use of the internet to become top of mind with consumers globally. Think about pureplay brands like Peloton, AllBirds, and Warby Parker - these are relatively new logos that gained incredible traction with their online presence. Marketers in this segment have relied heavily on social media and search engine marketing (SEM) to amplify their messages and reach eager shoppers. As these channels grow more and more crowded, expensive, and challenging to scale, brands need to think outside the feed to find innovative and cost-effective ways to connect with their target audiences.

In-app advertising could be the answer for D2C brands, enabling them to engage consumers right where they spend a significant portion of their day: within mobile apps.

Why in-app matters

In-app advertising opens up new touchpoints across the customer journey, from discovery to purchase. With consumers dedicating a good quarter of their day to apps beyond social media, in-app ads provide a unique avenue for brands to connect with potential customers in a more engaging (and less competitive) environment.

For years, social media and SEM have served as the go-to channels for D2C marketers, enabling precise audience targeting and brand awareness building. But both of these channels are seeing rising costs and lower conversion rates for advertisers, thanks to heightened competition and limited inventory. Beyond that, algorithm changes on social media make reach more elusive, forcing brands to rely on paid advertising just to be seen. Changes to search engine results pages haven't helped marketers much, either.

It's not that these channels don't work: They do, of course. It's just becoming more challenging for marketers to get the results they need from these two channels alone.

If you haven't considered in-app advertising as a potential avenue for your marketing, it might be time. By reaching audiences within apps, brands can connect with consumers who are active on social media but spend as much or more time engaging with other mobile experiences. In-app ads allow brands to engage users when they are most receptive-away from the noise of social feeds.

So it's not that in-app advertising replaces search or social media. It creates a new touchpoint for the customers who've probably seen your social media ads, but in an environment where it's more likely to capture - and hold - their attention.

How in-app advertising works for D2C

In-app advertising is designed to integrate seamlessly into an app's environment, blending naturally into the user experience. The same video ads that get lost in social media feeds can appear at convenient breaks in an app's UX-for example, between lessons in a language-learning app or after completing a level in a mobile game.

Research shows that users engage more deeply with in-app ads, particularly video formats that offer immersive experiences. (Case in point: In-app video ads boast a clickthrough rate 7.5x higher than display banner ads.) Given that users spend nearly four hours daily on mobile devices-over 90% of which is spent within apps-this makes in-app advertising a natural fit for D2C brands aiming for consistent outreach.

Jumping back into the customer journey with new touchpoints

D2C marketers can use in-app advertising to create touchpoints throughout the customer journey-from awareness to purchase. Here are some examples of how those opportunities might unfold.

• Awareness: In-app ads can be a powerful tool for introducing consumers to a new brand or product. "Tiktok-style" video ads within popular apps can build brand recognition without being intrusive. These ads give brands the whole screen as a canvas without adjacent content, and sometimes without the ability to skip past. And with the precise targeting available in the mobile universe,

• Consideration: As users become more familiar with the brand, in-app ads can help transition them into the consideration phase. Playable ads, once reserved for gaming apps, can be successful here. As an example, an e-commerce fashion brand has a successful playable ad where users can create outfits from a selection of clothing articles. Gamified ads like this help drive both memorability and interaction.

• Conversion: In-app ads are designed for performance. Engaging creative ads, particularly those featuring end caps with strong calls to action, drive the high conversions that are the hallmarks of this channel, which has historically been dominated by user acquisition ads for mobile apps. Clickthrough rates on in-app ads tend to double those of traditional display ads. The features that have facilitated the growth of the mobile ecosystem can work as well for D2C brands as they do for apps.

Targeting, analytics, and attribution
One of the standout advantages of in-app advertising is its ability to use advanced AI to target customer behavior based on down-funnel events, ensuring ads are seen by users who are more likely to make a purchase.ific audience groups, brands can improve relevance and resonance-and, consequently, results.

Of course, in-app advertising also delivers important performance metrics like Return on Ad Spend (ROAS), conversion rate (CVR), and Customer Acquisition Cost (CAC). These insights help marketers gauge campaign effectiveness and understand what resonates with their audience, allowing for real-time optimization. While this advantage isn't unique to in-app, it does empower marketers to refine targeting strategies, adjust creative content, and allocate budgets more strategically to maximize results.

As attribution models and technologies evolve, tracking the impact of in-app ads throughout the customer journey-from initial engagement to final sale and beyond-is becoming increasingly feasible.

In-app advertising can be a powerful addition to the mix for D2C brands that want to sustainably diversify their channel strategy. By establishing touchpoints outside social media and SEM, these brands can reach consumers where they are most engaged, ultimately increasing brand exposure and driving sales.

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