In-app purchases dwarf ad revenues, as iOS App Store exceeds $71 billion

In-app purchases dwarf ad revenues, as iOS App Store exceeds $71 billion

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US mobile ad revenue in 2015 was approximately 35 percent total digital revenue or $20.8 billion. However, revenue from in-app ads is dwarfed by in-app purchase revenue and paid apps according to the AppsFlyer State of In-App Spending report.

The AppsFlyer study looked at “over 100 million users across over 1,000 apps that have in-app purchase activity.” The chart below shows the breakdown of mobile app revenue by category: ads vs. in-app purchases vs. paid apps. These models aren’t mutually exclusive; however, non-advertising monetization dominates on a global basis.

AppsFlyer

AppsFlyer calculated that “the average global paying user spends $9.60 a month per app, which is 20 times more than the average user.” Yet only about 5 percent of app users make purchases.

Apple users spend 2.5X more than Android users on in-app purchases and the number of in-app purchasers on iOS is also 50 percent greater than the number of Android users making in-app purchases. Average in-app purchase value for iOS is about 2X vs. Android.

appsflyer in-app purchases

Geographically, Asia leads all other regions with over $10 in monthly spending per user. North America was second with $8.68.

As indicated, on a global basis, only 5.2 percent of users are making in-app purchases. In Asia the number is 5.9 percent; in North America it’s 5.8 percent. In other regions it’s less. There’s obviously huge revenue opportunity in more deeply penetrating existing markets.

appsflyer in-app purchases

Separately, Sensor Tower calculated that Apple has generated more than $71 billion in app-related revenue to date. Apple previously announced that it had paid more than $50 billion to developers, which represents the net after Apple’s 30 percent cut.

The AppsFlyer data above don’t reflect mobile-web advertising. Nonetheless it’s interesting how, as usage migrates to mobile and most time is spent in apps, the advertising model is losing to subscriptions and in-app consumer spending.




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