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Home Social Media

Ads represent more than two-thirds of $500B mobile app economy, report finds

May 18, 2023
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  • Total mobile app spending surpassed $500 billion globally in 2022, in line with the most recent State of App Revenue report from Data.ai, formerly often known as App Annie. Of that total, $336 billion (67%) got here from promoting and $167 billion (33%) got here from in-app purchases. 
  • Within promoting spend, 65% of the entire went to non-game apps, like TikTok and Instagram, while gaming apps made up 35% of spend. Among in-app purchases, games account for almost all of consumer spending (66%), while non-game apps account for 34%.
  • The top-performing app globally (excluding China) by total revenue was Facebook, followed by Instagram, YouTube, TikTok and Snapchat. Data.ai calculates total revenue as ad revenue and app store revenue combined. A single gaming app ranked in the highest 10, Candy Crush Saga, which placed ninth.

 

Despite regulatory restrictions and tightening budgets, the mobile promoting market stays strong, with ad spending driving $2 out of every $3 spent on mobile, in line with Data.ai’s latest findings. Furthermore, mobile ad spending grew 14% year-over-year in 2022. However, app store purchases dipped 2% YoY, indicating a slowdown by consumers as economic headwinds persist.

Breaking down global mobile promoting spend, North America was the top-ranking region, accounting for nearly half of ad revenue. Asia, excluding China, ranked second at 23%, followed by Europe at 19%.

As competition within the mobile space builds, a multifaceted monetization strategy is growing paramount. In the report, Data.ai notes that of the highest 20 apps — including TikTok, Snap and Instagram — 65% utilize each in-app purchases and promoting revenue streams. Games like PUBG Mobile and Candy Crush, alongside streamers like Disney+, have increasingly looked to similar strategies. With YouTube, as an example, 90% of its revenue comes from promoting while 10% comes from app store purchases to remove such ads, per the report. 

Within in-app purchases, nearly 30% of spend on iOS devices got here from subscriptions in the primary quarter of 2023, up from 27.6% through the same period the yr prior. Subscriptions were also a serious driver for non-game apps on iOS, contributing to 70% of in-app purchase revenue with the top-ranking app by subscription spending being YouTube, followed by dating app Tinder and Disney+.

Additionally, over 98% of in-app purchase spend for games got here from one-time purchases. One-time purchases are also gaining traction amongst non-game apps, a hit largely credited to TikTok’s creator economy model, per the report. As such, TikTok ranked because the primary app for one-time purchase revenue within the U.S., followed by nine mobile games.

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