Global App Market Ad Spend Prediction

Where will the global app market go in the following years, after it already surpassed traditional media like television? Data tells us that it will only continue to grow. With our mobile phones becoming “smarter” with every new release, there is less need to use our desktops – we can order a ride with our phone, pay the bills or even chat with Google Assistant. 

With the total number of mobile devices in the world increasing by the day, the same is predicted for the number of mobile game downloads. 

The install base of mobile devices (smartphones, tablets, wearable tech) is predicted to expand from 3.9 billion at the end of 2017 to 6.1 billion in 2022.

According to App Annie’s forecast, the number of mobile app installs is going to reach 258 billion by 2022. In comparison, in 2019, the total was 204 billion downloads. That is a 45% increase! 

Additionally, this forecast predicts the further growth of global consumer spends in app stores reaching $156.5 billion in 2022. This is up 92% from $81.7 billion in 2017. 

When it comes to advertising, forecasts by Statista predict that by 2022, 59% of total ad spending will come from mobile devices.

Consequently, the consumer spends growth will come as a result of a growing install base in developing markets and increasing spend per device in already mature markets.

We bring key insights from App Flyer’s yearly Global App Install Ad Spend projections for 2022. These forecasts are calculated based on 2019 data. 

Ad Spend for App Installs

Global

Total ad spends for app installs is predicted to grow with a yearly 27% rate up to 2022, according to Appsflyer. In 2019, the number of installs reached 58.8 billion, and with this growth rate, it is expected to reach $118.4 billion by 2022.

There are different challenges in the mobile app market world – fierce competition for organic discovery in app stores and the ability to discover high-value users at a scale that won’t stop using your app after a day or two.

APAC 

This region that includes several major markets will drive nearly 50% of the worldwide ads budget by 2022. During this period, China, India and Indonesia are projected to add more than 220 million mobile internet users to the global app market. 

Since Google Play is not used in China, app installs come from different third-party sources. For this reason, it is not as simple to measure ad spend in this market. According to available estimates, the ad spend in 2019 was $15 billion and will reach $22 billion by 2022. 

Some APAC markets will not have a high impact on the total ad spend due to low media costs. One of those markets is India, with an estimated $0.25 – $0.28 cost per install.

Japan is the most expensive in terms of media costs with an average of $3.2 –  $3.5 cost per install. This market, however, comes with a large and engaged app user base.

North America

North America is the second region by ad spend when it comes to app installs. It is also a region with traditionally higher CPIs. Since this region already has an active user base, it is predicted to increase at a slower pace, about 5% by 2022. 

Significant growth is expected in longer periods of time, even though year-over-year growth is decreasing. By 2022, this region’s app install spend is projected to grow up to $27 billion. 

EMEA

Another interesting market, EMEA (Europe, Middle East, and Africa) is predicted to grow up to 116% by 2022, in comparison to 2019. With this growth trend, the region will reach $22.9 billion in total app install ad spend. 

Have in mind that this region is highly diverse, with significant differences between Europe, MENA (the Middle East and North Africa), and the rest of Africa. 

Since Africa and MENA are still experiencing a growth in mobile users, these are the markets that will attract most app marketers in the following years. 

LATAM

Brazil is driving this region’s growth, accounting for more than 50% of app install ad spend. In 2019, the ad spend was $1.8 billion. The projections for 2022 are that this number will reach $7 billion. It is important to note that install costs in this country are relatively low – averaging at $0.75.

Trends in the Mobile App Market That Will Drive the Growth

Gaming

Gaming apps are currently the most popular app category in both Google Play and Apple Store, followed by education and business apps. 

In 2020, there were a total of 80 billion mobile game downloads. This is an 18% increase from the year before (App Annie).

According to AdColony’s demographic data on committed gamers, there is no visible gender gap in mobile gaming – 49% of them are female, and 51% are male. 

Just like with genders, age stereotypes about gamers are disappearing by the year. One of them is that only teenagers and children play mobile games. Today, the average mobile gamer’s age is 36 (MoPub). In fact, the majority of mobile gamers are older than 34 (Mediakix). Moreover, people over 45 make up almost one-third of mobile gamers (MoPub). 

Check out some other intriguing mobile gaming statistics that show this market is rapidly changing and growing. 

With all of these trends, it comes as no surprise that app developers and marketers are becoming more focused on the mobile gaming industry.

Devices

Today’s mobile phones have more RAM, better processors and more storage than computers had 10 years ago. That kind of device offers a better and immersive gaming experience, as much as more affordable. You can use your phone for VR gaming, connect it to a bigger screen, all when playing a game on your phone!

App Commerce

There is a growing use of mobile apps in making purchases – connecting users between offline (in-store) and online (web, mobile web, and apps) channels. Users are making more and more purchases using mobile apps in comparison to desktop check-out.

2020 was the biggest year for mobile commerce ever. According to App Annie, in 2020, the time spent in shopping apps rose by 30%. People didn’t just spend a lot of time using shopping apps, they also spent a lot of money. In the U.S., people spent more than $53.2 billion on mobile. This is 55% more than the year before.

This trend is expected to continue in the years that follow. App Annie’s prediction is that time spent in shopping apps will increase even further – by 40% by 2025. 

Streaming Services

Streaming services like Netflix, HBO, Spotify, Twitch, and other streaming platforms are rapidly growing. 

They especially grew in popularity in 2020, due to the pandemic and lockdowns. 

According to App Annie, in 2020, the number of hours streamed on mobile increased by 40% in comparison to 2019. Moreover, in 2021, the average U.S. user has 9.5 streaming apps installed on a mobile device. This has increased by 85% in comparison to the year before (Social Media Week).

Millennials are spending less time consuming traditional media and more time online and on their phones. Better internet infrastructures like 4G or 5G can support a higher bandwidth needed for streaming in full HD or 4K.

Conclusion on the App Market

The mobile app market is more and more adopted by marketers. Ad spends on app installs will constantly grow by 2022. This market is becoming increasingly competitive. It is essential to be more data-reliant. From this data, increased ad spend resulted from higher cost, more paid campaigns, more apps on the market and overall more users.

Major marketing opportunities are to be expected going into 2020. Better infrastructure (5G) will offer more opportunities for creative marketing.