Mobile advertising expenditure in apps worldwide forecast to touch $64 billion by the year 2020.
Revamped Perspective on the Burgeoning App Advertising Market
In a groundbreaking report by AppsFlyer, the app advertising sector is projected to sprout at a remarkable pace over the next few years, surging from a humble $27.1 billion in 2017 to an impressive $64.1 billion in 2020 — a staggering growth of approximately 136%.
This forecast suggests mobile app developers will beef up their marketing budgets, favoring an average year-over-year growth rate of 34%. However, the market's fervor is expected to eventually taper as it matures, fueled by several growth drivers such as escalating media costs, enhanced mobile usage, uptick in paid campaigns, exploding app market, and increasing mobile users.
Within one of the world's most robust app dominions, North America, app install and ad spend growth are expected to double by 2020, reaching $12.9 billion. Notably, North America's average year-over-year growth rate will reach around 21%.
So, what's the secret sauce driving the expansion of app installs? While marketing will continue to fuel the growth engine, organic installs will hold sway in the subsequent years, as their growth rate isn't anticipated to keep pace with the increase in media costs. According to AppsFlyer's data, global non-organic app installs will skyrocket by 110% into 2020, while in North America, non-organic installs will zoom by 73%.
As Shani Rosenfelder, the Head of Content & Mobile Insights at AppsFlyer, puts it:
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"AppsFlyer's App Install Predictions report underscores the growing intensity within the global mobile ecosystem. As the mobile scene becomes more congested, the key differentiator between excellence and mediocrity will lie in strategic deployment of high-quality data for informed marketing decisions and ingenious approaches to app installation and valuable user acquisition strategies," Shani says.
Pondering the keys to the success of mobile apps, the report pinpoints the following growth factors:
- High Demand for Gaming and Shopping Apps—These categories dominate the app landscape, representing roughly 44% of all non-organic installs combined. Of particular note, gaming apps claim around 40% of the total app install pie, with a 26% surge in gaming non-organic installs between 2016 and 2018, increasing from 27% to 34%.
- Revolutionary Hardware Advancements—Creating captivating gaming experiences and propelling user engagement on new devices.
- Prominent Role of Shopping Apps—Bridging the gap between offline and online shopping channels, particularly as mobile apps become indispensable tools for making purchases.
- Booming Video Streaming Apps—Including Netflix, HBO, Hulu, and Spotify, these apps are on the rise.
The report methodology dives deep into the statistics:
- AppsFlyer's technology is installed on 98% of the world's smartphones.
- The data for this market research report was derived from AppsFlyer's own data, which encompasses 35 billion installs, $10 billion in ad spend, and 70,000 apps in the sample, as well as third-party mobile attribution market share data, CPI predictions per region, number of apps in the app stores, and the number of installs.
[1]Based on the analysis of the mobile market and user behavior trends in Brazil, a mobile-first culture is shaping the app landscape. This culture results in higher user expectations and fierce competition, necessitating smarter, sustainable growth strategies.
[3]The shift towards creative variety and emotional storytelling in mobile advertising is becoming a strategic imperative. This entails diversifying creative investments and improving audience segmentation to combat ad fatigue, particularly in non-gaming apps that have increased their creative output.
Technology plays a crucial role in the burgeoning app advertising market, as highlighted by the data-driven insights from AppsFlyer's technology installed on 98% of the world's smartphones.
The finance sector stands to benefit significantly from this market growth, particularly those involved in strategic deployment of high-quality data for informed marketing decisions, as suggested by Shani Rosenfelder, the Head of Content & Mobile Insights at AppsFlyer.
