Mobile ad spend to top $360bn but growth to slow in 2023

Growth in mobile ad spend dropped to 14% year-on-year in 2022, while short video apps expected to drive ad spend this year.

Ad spend in mobile is predicted to grow by 7.5% this year to reach $362bn, compared to a 14% growth rate in 2022.

The spend on advertising in mobile hit a five-year annual compound growth rate of 18.5%, according to latest figures from data.ai (formerly App Annie), while remaining on an upward trend in terms of spend, the year-on-year rate of growth has been slowing since its 26.3% peak in 2020.

Growth in mobile spend dipped slightly to 22.9% in 2021, before dropping more starkly in 2022, at a 14% rate, though spend hit $336bn last year.

The data.ai State of Mobile 2023 report reveals that short video apps are expected to drive ad spend, at the expense of social network platforms, which are experiencing the decline.

“It's the brands that matter. Spend on brand advertising will help bolster the effects of dipping spend on performance marketing in the face of tightened marketing budgets,” the report advised.

Social and video take lion’s share of time spent in-app

Communication and entertainment apps held the monopoly of time spent in apps across the world in 2022, with social and video dominating.

The data.ai figures recorded that communication – specifically social media – apps and short video and video sharing apps accounted for more than 50% of time spent in apps globally.

Entertainment and over the top apps were the top apps by category for both downloads and consumer spend last year – taking a 16% share of dollars spent on subscriptions and 4% of downloads.

But the report noted: “Mobile web browsers accounted for only 8% of time spent. While the web is important for your marketing and user acquisition funnel, apps command attention and meaningful engagement.”

2022 saw a buoyant year for mobile across the globe – with the top 10 markets for mobile analysed by data.ai spending an average 5 hours, 2 minutes daily in apps – with users in Indonesia, Brazil, Saudi Arabia, Singapore and South Korea surpassing this.

UK users spent an average 4.2 hours a day in apps last year and worldwide time spent in apps grew by 9% compared to 2021.

More than 255 billion new app downloads happened in 2022, and $167bn was spent in app stores across the world. But consumer spending had slipped 2% in apps year-on-year, as the economic uncertainty impacted discretionary spending.

Short-form video apps dominate attention

The figures report that short-form video apps – led by TikTok – dominated consumer attention in 2022, with users of these apps streaming 3.2 billion hours of user-generated content daily, a growth of 25% year-on-year. Almost $6bn was spent in these apps – a sharp rise of 60%.

Consumers spent nearly 110 billion hours in shopping apps last year, with data.ai citing the top markets for growth as India and Indonesia, as well as countries in LATAM including Brazil, Mexico, and Argentina.

Mobile shopping saw rapid growth in 2020 prompted by COVID-19, with retailer apps seeing a 43% download growth that year. Fast-forward to 2022 and mobile apps became cost-cutting tools, with downloads for coupons and reward apps up 27% on 2021. Buy-now-pay-later apps saw strong growth across the world in 2022.

TikTok saw more than $3bn in consumer spend in 2022

TikTok became the second non-gaming app to surpass $6bn in consumer spend over the past 10 years – lagging only behind dating app Tinder.

In 2022 there was more than $3bn in spend on the app, and over the past 10 years, it has had twice as many downloads as the next closest streaming app – YouTube – according to data.ai.

“TikTok made us reimagine how high consumer spending in apps-especially outside of mobile games-could reach,” the report noted. Despite not even ranking among the top 100 apps by consumer spending in any year until 2020, TikTok has since exploded onto the scene, reaching the top spot in 2022 with more than $3 billion in consumer spending.”


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