Mobile apps

Ad-funded app model gaining ground

by Emarildo BANI

Social and communication apps are still the most popular mobile applications, and those belonging to the Internet giants continue to top the global rankings. In terms of revenue, and thanks in large part to these flagship apps, mobile advertising is now a major money-maker for mobile apps.

Rise of advertising on mobile apps

The global mobile apps market is expected to continue to enjoy steady growth, going from 263 billion EUR in 2019 to more than 430 billion EUR in 2023. This forecast includes total revenue for paid and advertising services.

Pressure from users for free apps altered the strategies of developers who now earn the bulk of their income (86% of total mobile app revenue by 2023) from advertising for mobile app services, including social media sites, video and search. As a result, more than 95% of today’s mobile apps are free and, of the remaining 5%, half cost less than 1 EUR.

Advertising the main source of income for apps

Progression of mobile apps' regional ad revenue

Source : IDATE DigiWorld in "World OTT markets"

Internet heavyweights going head to head to secure a bigger share of this growing market

The Android (Google) and iOS (Apple) operating systems continue to dominate the mobile apps landscape, in terms of active monthly users. Google Play generated the largest number of app downloads worldwide in 2019, as its users downloaded more than 85 billion applications from the store.

Apple’s App Store is still number one in terms of consumer spending: accounting for 64% of consumer spending on apps worldwide. Excluding the most popular pre-installed apps on Android and iOS, topping the bill are social and communication apps (Facebook, WhatsApp WeChat and Instagram), rivalled only by mobile gaming and on-demand service apps (Uber, Uber Eats, Deliveroo…). While the number of apps available to consumers is booming, tech giants have begun to focus more on developing their existing apps, rather than expanding their portfolio. Which could explain why, in 2019, six Google apps (including YouTube, Gmail and Google Maps) were among the 20 most downloaded worldwide.

Market dominated by two tech giants

Progression of mobile app downloads worlwide

Source : Statista

BaaS could rapidly take hold in the apps market

Global mobile Backend-as-a-service (BaaS) solutions revenue

Source : Market Research

Expected rise of on-demand services

The on-demand services industry is booming, and now covers virtually every area of activity. The most popular today are multimodal transport apps, thanks to applications like Uber, followed by food delivery applications.

Uber has already announced that it would be merging its Uber Eats food delivery app with its main ride sharing app, while adding a series of new forms of transport (bicycles, scooters…) to create an all-in-one solution.

With more than 22.4 million users a year, the on-demand mobile app economy boasts 23 of the 310 listed private companies with a market cap of at least 1 billion USD in 2019.

Mobility apps will stimulate the on-demand apps economy

Breakdown of user spending on on-demand mobile apps in the US, in 2019

Source : Magento

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