Mobile is taking over the share of advertising wallet as more time than ever before is spent in apps, but the growth of ad spend will slow in the face of economic headwinds, says a report by Data.ai.
It stated that spending on brand advertising will help bolster the effects of dipping spend on performance marketing in the face of tightened marketing budgets. Mobile ad spending in 2022 grew 14 percent, while app store purchases declined 2 percent indicating a slowdown by consumers due to economic headwinds.
In regards to social media apps, as per the report, of the top 20 apps that include TikTok, Snap, and Instagram, 65 percent utilize both in-app purchases and advertising revenue streams. Moreover, games like Candy Crush and PUBG Mobile, as well as Disney+ have been looking at similar strategies. About 90 percent of YouTube’s revenue comes from advertising, while 10 percent comes from app store purchases to remove such ads.
For iOS devices, about 30 percent of spend within in-app purchases came from subscriptions in the first quarter of 2023. This is a noted increase from 27.6 percent during the same period last year. According to the report, subscriptions were also a major driver for non-game apps on iOS, it contributed 70 percent of in-app purchase revenue with the top-ranking app by subscription spending being YouTube, followed by dating app Tinder and Disney+. And more than 98 percent of in-app purchase spend for gamers came from one-time purchases.
The report acknowledged that consumer time and transactions in apps, from gaming to retail, to food and ride-hailing, fintech, travel, and telco, continue to hypercharge different verticals. It is critical for brands to proactively invest in developing robust app-based insights and app capabilities to make the most of the surge in user attention and time.
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