Revenues from mobile app installs ads are booming and the global app opportunity is getting much harder to ignore. Until recently, a large portion of the app marketing business was driven by the players at the forefront of marketing and advertising technologies, namely the larger game publishers. This phenomenon was mainly due to the category’s attractiveness to consumers and the high revenue potential of free-to-play micropayment-based business models.However, today we’re seeing an increasing market opportunity for apps outside of the gaming vertical. Transaction-based business models such as eCommerce and classifieds are skyrocketing on mobile and sometimes even leapfrogging desktop in certain mobile-first economies. According to an xAd study, more than 60% of all purchases made in a digital environment are already triggered by a mobile first event. A recent study by Digi-Capital predicts that the share of revenue from non gaming apps will double to 51% by 2017. Players in the field need to consequentially think through their marketing channels and invest accordingly to capitalize on the opportunity.
Here are the reasons behind this massive global app opportunity.
The Two Key Growth Drivers in the Global App Opportunity
Two key factors are specifically driving the non-gaming opportunity. First, there is a massive shift of media usage from online to mobile in general. All sorts of media consumption as well as other activities are indeed increasingly happening on mobile first. All established business models such as travel, e-commerce, classifieds or dating see increasing adoption on mobile.
Secondly, we’re witnessing a rapidly-increasing smartphone penetration in large emerging economies like India, Brazil, China but also to a lesser extent the Middle East. These markets are very strong in mobile or are even mobile first markets which is due to a lack in fixed-line broadband infrastructure. A disadvantage of previous years is therefore turning into a massive market opportunity. Smartphone adoption and penetration of business models will continue to grow over the next couple of years with a need to increase marketing spend accordingly. Overall, the a huge portion of the underlying growth will likely come from the larger emerging markets.The chart below represents the split of users accessing internet from mobile and desktop. A stronger orange means a higher share of users accessing internet from a mobile device. In the countries in full orange, more than half of users access through mobile. (for more details, see source: statscounter).And, yes, Greenland is strong on mobile!
Having said that, the app opportunity in performance marketing is no free lunch. Specific challenges include often longer conversion funnels than those which can be observed in gaming. Indeed, transactions or subscriptions often see higher volumes, which tends to lead to longer conversion funnels. A good understanding and a full integration of this conversion funnel with user acquisition efforts is key in order to invest into the right app installs. Advertisers also need to work with a partner than can support their global business models with the right inventory, know-how and potential to scale mobile performance campaigns in a profitable way.What are your strategies when it comes to leverage the global app opportunity? Let us know in the comments!