Mobile apps are everywhere today. Sure they’re on your phone, but we also hear about them on commercials and at routine locations like school or the doctor’s office. It seems like there truly is an app for everything.
Just so we’re all on the same page before diving into the data: mobile apps are software applications designed for small devices, such as smartphones and tablets, rather than desktop or laptop computers.
In addition to being appropriate for the smaller screens of mobile devices, mobile apps often take advantage of those devices’ capabilities, such as GPS. They might be web-based and available to anyone, or created for specific platforms, like iOS or Android.
As advertisers, we should be paying attention to mobile apps, especially as in-app advertising develops. This is a way to target the right audience at the right time, and get in on a growing trend of big spending—in-app mobile ad spend is projected to reach $16.9 billion by 2018.
For some insight, we looked at the comScore 2016 Mobile App Report. Following are some highlights, and how they relate to advertising.
Trends in Mobile Apps and Devices
According to comScore, the mobile device claims 67 percent of the share of time spent on digital. Mobile apps aren’t far behind with 58 percent of digital time share. Meanwhile, desktop is losing share at a rapid rate.
Keep in mind that mobile apps are separate from the mobile web, which is actually growing faster than mobile apps, according to the report. However, the average time spent on mobile web is in decline. And mobile apps are seeing growing audiences in the millions.
Still, digital infrastructure makes it harder to reach large audiences on apps, unlike the more open environment of the mobile web, where the top properties have 4.5 times the occurrence of 5 million unique visitors that mobile apps do.
Again though, once you have that mobile app audience, they stick around, unlike the mobile web audience. The top 1,000 mobile apps enjoy 20 times the hours that mobile web properties do.
Something to wonder, though—have we reached a “peak” with app downloading? More than half of all download activity in a month is concentrated among only 13 percent of smartphone owners, with 49 percent of smartphone owners downloading no apps in a given month.
That might seem odd, until we realize that most users spend the majority of time in just a few apps. Tablet users spend 61 percent of their mobile time in their top app, and 87 percent of it in their top three apps. Smartphone users spend almost 75 percent of their time with their top three apps.
Mobile usage in general is on the rise, with Millennials spending the most time on devices and 55-64-year-olds demonstrating the largest (37 percent!) use-time increase in a year. Adults under 44 years do spend the majority of their time with smartphone apps, and it seems that all but the oldest users (65 and up) are also headed in that direction.
Those frequent app downloaders we mentioned? They’re likely to be male, between 18 and 44, Hispanic and into gaming. They also live in urban areas including New York, San Francisco, Dallas and Miami.
Finally, let’s look at the devices themselves. Tablets app use is declining, especially among ages 35-44. Interestingly, the youngest users use them more often for gaming and school, while the oldest users like them for news and reading.
Mobile Apps and the Future of Advertising
Similarly to the days before the dot-com bubble’s burst, today’s advertisers are putting a lot of money into an exciting new technology (mobile apps), but not quite driving optimal sustainability (yet).
However, just as the internet came roaring back within a few years, mobile apps will undoubtedly become a top channel for advertising. The idea is to not be a single-channel-dependent advertiser. Apps can be integrated into more traditional channels, turning existing user behavior into app ad revenue.
Case in point: While app stores used to be the primary puller of new app downloads, it seems that traditional and digital ads are now pushing users to download apps. Advertisers need to maintain a presence in both channels, and find a balance.
So which apps are most popular, and where should advertisers be? You guessed it—Facebook and Google apps. In fact, Facebook and Google own most of the Top 10 mobile apps. And advertising plays a role in this success on both sides. The vast majority of Facebook’s advertising revenue is from mobile (see previous link).
Most recently, the mobile world has been taken by the phenomenon of the Pokémon Go app, which may eventually tie into in-app advertising as organizations pay to get their name into the location-based game. So this is one to watch.
It’s been suggested that in-app ads are the future of advertising. Obviously, the targeting would be much better than in mobile web, thanks to location data, consumer behavior data and the context of the app itself.
And that future looks bright, according to a study from Medialets. Ads on apps have a 0.58 percent click-through rate, compared with mobile web ad click-through-rates of 0.23 percent.
What do we do in the meantime? It’s early days still, but takeaways from comScore’s report tell us to keep in mind the following:
- Smartphone apps are getting more time, though most of that time is with the top apps owned by the largest companies.
- App downloading is slowing, and it’s going to be harder for publishers to be seen.
- Publishers have to get strategic about integrating mobile web with mobile apps.
For advertisers, this means paying attention to popular apps like Facebook and up-and-comers like Pokémon Go, and watch for opportunities to integrate traditional advertising, mobile use and mobile app popularity. One thing is for certain: The future of mobile advertising is upon us.