The Outlook for Mobile App Growth

A recent report from App Annie dives into growth trends in mobile app space, and offers some valuable insights into the flourishing industry.  Mobile app revenue growth as surpassed mobile and PC browser-based ads (advertising growth stands at 1.6x for in-app advertising vs. 1.1x for PC’s), a trend largely being driven by gains in device adoption and increased revenue per device.

Thus far, freemium and in-app advertising have seen the greatest revenue growth, at 211% and 56%, YoY respectively.  Conversely, paid and paidmium apps have seen their revenues decline 29% and 23%.  It is worth noting that the freemium model is particularly dominant in the games category, and offers a unique value proposition with the ability to monetize functionality, usage, and user experience in particular. In-app advertising revenue is largely dependent on finding the right format for users and striking an appropriate balance between monetizing through app stores and monetizing through in-app advertising.

Looking ahead, the U.S. should remain the leading source of mobile app-related revenue with 3.5x growth from 2013-2017. App downloads are expected to increase from 111.2 billion in 2015 to a whopping 284.3 billion in 2020. As app downloads and usage grows, advertising should reap the benefits, closing a gap between time spent in media and overall ad spends (24% vs. 8%, respectively).

Source: App Annie Report, Mobile App Advertising and Monetization Trends 2012-2017: The Economics of Free

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