Report: Freemium and In App Advertising See Massive Revenue Gains

Thursday, April 3, 2014

Lets face it, at the end of the day, anyone who creates a mobile app is doing so to generate revenue (most of the time). The largest enterprises all the way to small indie developers don’t spend all the time, energy and cost to develop an app just for grins and giggles, revenue is always the bottom line.

From an app monetization and marketing standpoint, mobile still represents a huge potential revenue opportunity, as the mobile app industry surpasses 102 billion annual app store downloads and $26 billion in revenues.

To provide more insight, App Annie and IDC have recently released a report that provides insight into the current and upcoming mobile advertising and monetization trends that will shape the industry.

Highlights of the report include:

Mobile Apps Capture More Eyes… and More Advertising Budget

Mobile device install base worldwide is skyrocketing, with a 49% jump in key countries from 2012 to 2013. Revenue per mobile device is also on the rise. These two trends are key factors in making mobile an extremely lucrative way to monetize.

Freemium is a Revenue-Generating Juggernaut

Freemium’s low-friction adoption model lets publishers get their apps on phones with ease, casting a wide net for monetizing users. From 2012 to 2013, freemium saw 211% revenue growth, while paid and paidmium declined. Developers took note, and in 2013 most games (and increasingly non-games) incorporated a freemium business model with in-app purchases.

The Importance of Matching Your Monetization Strategy to Your Market

One size doesn’t fit all, and our research showed that users in different countries can skew towards app store purchases or in-app purchases. When deciding your monetization model, you’ll need to think about not just where you are, but what country you want to sell in.

Developer and Publisher Monetization Strategies

We surveyed our developer community asking them to explain how they advertise and monetize their apps, and we got a great response. This report contains current and actionable charts outlining freemium value propositions, in-app purchase targeting, popular in-app advertising formats, how developers are selling their ads, and more.

Advertising, Monetization and Individual Country Performance Projections

They say what’s true today may not be true tomorrow, but our research showed that for mobile apps, what’s true today will be magnified tomorrow. We outline the key points you need to consider so you can position yourself for future success.

The 38-page report provides these and other insights and is available as a free download. The report is available in English today, with additional languages coming soon.