Mobile App Advertising and Monetization Trends 2013-2018 ...
[Pages:25]? 2015 App Annie & IDC | Do Not Distribute
Mobile App Advertising and Monetization Trends 2013-2018: Freemium and In-App Ads Expand Their Lead March 2015
? 2015 App Annie & IDC | Do Not Distribute
1. Assessing the Current Opportunity for Apps 2. Selecting the Right Business Model for Your Apps
a. Freemium b. In-App Advertising 3. Choosing Which Markets to Target 4. Planning for the Future 5. Key Takeaways
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? 2015 App Annie & IDC | Do Not Distribute
Mobile apps continue to outpace both PC web and mobile web advertising
? Mobile in-app advertising is expected to continue taking revenue share from 3 PC advertising as advertisers allocate their budgets for maximum return
? 2015 App Annie & IDC | Do Not Distribute
Mobile app revenue opportunity is rapidly expanding due to gains in device adoption and revenue per device
Worldwide Combined iOS and Android Smartphone and Tablet Installed Base
3B Source: IDC
Worldwide Combined App Store and InApp Advertising Revenue per Device* 150 Source: App Annie & IDC
2B
1B
1.4x
100
1.2x 50
Device Installed Base Indexed Revenue
0
2013
2014
0
2013
2014
*In-app advertising across all app stores; app store revenue across iOS App Store and Google Play
? Massive growth in the number of smart mobile devices dramatically expands
the potential app audience ? Increasing revenue per mobile device magnifies the impact of growing device 4
adoption, accelerating the growth of the overall monetization opportunity
? 2015 App Annie & IDC | Do Not Distribute
1. Assessing the Current Opportunity for Apps 2. Selecting the Right Business Model for Your Apps
a. Freemium b. In-App Advertising 3. Choosing Which Markets to Target 4. Planning for the Future 5. Key Takeaways
5
? 2015 App Annie & IDC | Do Not Distribute
Apps can achieve a variety of goals for publishers, though earning revenue is the clear favorite
What are your company's goals for its apps (select all that apply)?
Earn revenue within the app store (e.g., in-app purchases, paid downloads)
Earn revenue through in-app advertising
Drive branding and marketing initiatives for your company
Provide your company's online services and functionality via mobile (e.g., Netflix, Bank of America)
Generate mobile transactions that are processed outside of an app store (e.g., eBay, Uber)
Drive shoppers to your company's brick-and-mortar stores (e.g., Walgreens)
Source: App Annie Survey March 2015 (n = 2962)
0% 10% 20% 30% 40% 50% 60% 70% Percent of Respondents
? In addition to generating revenue, driving corporate branding and
marketing initiatives is an objective for many app publishers
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? 2015 App Annie & IDC | Do Not Distribute
Choosing the business model that is best suited for each app and its target audience is critical for success
Business Model
How does it work?
Freemium
Free download with in-app purchases.
Top 3 Apps by iOS and Google Play Revenue in 2014*
Clash of Clans Puzzle & Dragons Candy Crush Saga
Paid
Paid download with no in-app purchases.
Minecraft ? Pocket Edition Grand Theft Auto: San Andreas Terraria**
Paidmium
Paid download with in-app purchases.
Card Wars Order & Chaos Online** Plague Inc**
In-App Advertising Contains ads (banner ads, video ads, etc.).
N/A
Dynamic
Business model shifts depending on certain
factors (app shifts to an ad-supported model if
N/A
the user does not make in-app purchases, etc.).
*Based on App Annie Intelligence estimates **If an app used multiple business models or switched business models during 2014, the app's ranking for any particular business model was solely based on the portion of its revenue that was generated by that business model
? 2015 App Annie & IDC | Do Not Distribute
Freemium and In-App Advertising expand their massive lead over other app business models
Indexed Revenue
Mobile App Revenue* in Key Countries**
200
+71%
150
+72%
2013
2014
* In-app advertising across all app stores; app store revenue across iOS App Store and Google Play
100
Source: App Annie & IDC ** Brazil, Canada, France, Germany, India, Japan, Russia,
South Korea, United Kingdom &
50
-19%
-24%
United States
0
In-App
Freemium
Paid
Paidmium
Advertising
iOS App Store & Google Play
? Freemium and In-App Advertising appeal to a broader user base by
eliminating up-front costs and create ongoing revenue streams for publishers
? Paid and Paidmium revenue both continue to substantially decline, though
they can still be successful for the right apps
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