$8 Billion Spend Predicted For In-App Mobile Advertising
$8 Billion Spend Predicted For In-App Mobile AdvertisingSep 22 2010 - Mobile - Farhad Divecha
The number of mobile apps available is increasing rapidly, and so is the amount of money being spent on the delivery of in-app mobile ads.
According to Borrell Associates, in the U.S. alone, the spend on advertising within mobile apps will be over $305 million this year and will more than double to an estimated $685 million in 2011.
Analysts at Borell predict that the figure will rise to over $8 billion by the year 2015, with local advertisers accounting for $1.2 billion of the total.
Since Apple opened their App store in 2008, about 5 million apps have been downloaded on mobiles. While the vast majority of these apps are for free, users have still ended up spending $1.5 billion on applications that are not free.
It is believed that only about one-fifth of the total number of computing devices in the U.S.A. can currently receive mobile ad messages, but by 2015 that figure should almost triple. This should encourage advertisers to pay more attention to mobile advertising.
Another interesting statistic revealed through research is the turnover rate of smartphone apps. Today, on average a single smart phone will have about 22 applications. However, it is estimated that within about 6 months time, only 5% of these apps will be retained. Since the turnover rate is very high, developers often do not even recover the amount invested in developing these apps.
Popular brands introduce new apps rapidly, but the offers they provide are not very attractive and hence their download rate tends to be very low.
Kip Cassino, Executive Vice President of Research at Borrell Associates says, “I think the app developers had better find out what is working for folks and what is most useful to people buying these apps. They need to concentrate their efforts and realise there is a bigger world out there than just Apple.”