3 Mobile Advertising stats from KPCB’s Internet Trends’14 All App Developers Should See

Renowned VC firm, Kleiner Perkins, recently released their famous annual “Internet Trends of 2014”. The report has become a bible of sorts for all things digital, including mobile advertising. Here are the 3 major takeaways all app developers should be paying attention to:

1) App revenues are still coming mostly from in-app purchases and paid downloads…

Screen Shot 2014-06-18 at 9.53.43 AM

  • Advertising only accounts for 32% of the revenue generated by mobile apps. The rest is mostly coming from in-app purchases (including paid features) and getting users to pay to download your app (which certainly isn’t an easy road these days). Considering that the average app developer makes less than $500/mo (per app), there’s a lot of room for improvement (see http://adadapted.com/the-average-app-developer-makes-what/)
  • How did we get here? Banner ads don’t pay much and selling premium inventory directly to advertisers is still really hard: Basically, the majority of app developers still aren’t finding great choices when it comes to monetizing through ads.

2) Ad spend will shift to mobile: Still a huge gap between app usage, and in-app advertising…

Screen Shot 2014-06-18 at 9.54.46 AM

  • Mobile consumption continues to grow significantly but advertising spend hasn’t caught up.
  • In 2013, of the overall time consumers spend interacting with media, 20% was spent on a mobile device. In comparison, TV held strong at 38% and print continued to fall with only a 5% stake. In a perfect world, advertising spend would correlate closely with the average time spent (so 38% of advertising $ would go to TV, 20% to mobile channels, etc).
  • It looks like advertisers didn’t get the memo:  Only 4% of ad dollars are going into mobile while print still commands a whopping 19%.  Even TV is getting more than its fair share with 45% of ad budgets (compared to 38% of time spent).
  • What does this mean for app developers? The discrepancy between time spent and ad spend is not sustainable. Brands will find ways to reach their audiences and its clear that those audiences are on mobile. Kleiner Perkins’ Mary Meeker calls the gap a “$30B opportunity in the US” and app developers have to make sure they’re in-line to take their share.

3) Mobile spend increased by 47% last year and is not slowing down…

Screen Shot 2014-06-18 at 9.54.58 AM

  • Remember 5 years ago when analysts started talking about huge growth in mobile advertising? Well its finally happening. In fact, between 2012 and 2013, mobile advertising increased by almost 50%. That’s compared to 11% growth across all Internet advertising.

What this all means is rather simple: the mobile industry is growing and there are great opportunities out there for you to make money! With more and more people turning to mobile apps for the various aspects of their daily life, it is only a matter of time before advertisers catch up and figure out how best to integrate their content into your apps!

Leave a Reply

Your email address will not be published. Required fields are marked *