Mobile Monday: Partnerships Drive App UA, Mobile Monetization Growth, and Purchasing Virtual Goods
Digital Turbine is constantly keeping tabs on the mobile world, and every week, we’re sharing the most interesting and important need-to-know stories and articles. In this edition of Mobile Monday, we’re covering methods that can increase app user acquisition, the latest data on consumer preferences for mobile apps, in-app advertising, and in-app ads, and mobile gamers leaning into purchasing virtual goods. Learn all about these stories in this week’s Mobile Monday!
I Don’t Mean to BRAG, but Yes We (peli)Can!
We were excited to see a mention of our BRAG report in a recent AdExchanger story about an Israeli gaming company, Gliding Deer, and their unlikely partnership with a minor league baseball team, the Myrtle Beach Pelicans. The BRAG report reference is in the fourth paragraph: “brands that strike offline partnerships, such as aligning themselves with a sports team, athlete or musician (anyone or anything with an already established fan base), have lately been found to outperform more well-known competitors, according to a recent report from Digital Turbine and Apptopia.”
Our BRAG report highlighted how in the era of consumer privacy, smaller brands are using three tactics to boost their brand strength and app growth over traditional performance marketing: 1) Offline Partnerships, 2) On-Device Integrations, and 3) Product Innovation. Within the report, we profiled several companies who have used offline partnerships with sports teams, including Chick-fil-A whose partnership with hockey teams like the reigning Stanley Cup champion Tampa Bay Lightning (Apptopia spotlighted this story in a recent blog) helped them reach Transcender status on our BRAG index.
While the story says that it’s still too early to fully quantify the results of this partnership, we can appreciate the out of the box thinking by Gliding Deer. Since one of the characters in the game is a pelican, the quid pro quo deal with a team named the Pelicans makes sense. And since games have a high viral capability, any new users (even located in one market) have the potential to organically drive growth through word of mouth and brand strength. It’s also why on-device integrations drive growth since it lets your brand strength work for you by letting your app icon simply be there on the phone. In the post-IDFA world, it’s creative thinking like this that will separate winners from losers.
Mobile Revenue and Monetization Trends
eMarketer just released their latest report breaking down mobile app usage, monetization trends, and where the industry is headed in the next couple of years. Highlights from the report include the growth in in-app purchases and in-app ads, gaming, shopping, retail, and dating apps seeing more downloads, and mobile advertising revenue reaching nearly $170 billion in 2022.
After going through an app download frenzy in the past couple of years, consumers are now comfortable using apps to perform many functions and will be loyal to the apps with which they find value. Currently, the most popular apps for U.S. consumers include weather, map/navigation, and shopping and retail apps. These apps provide convenience, ease, functionality, and fun, and consumers have now made a habit of going to their mobile devices to provide for their everyday needs. In addition, grocery delivery apps are continuing to see major growth with almost 50 million adults expected to be using that type of app by 2026, up from 22.9 million users in 2019.
With growth on mobile and app usage, revenue from mobile advertising is also continuing to increase. It’s expected that revenue from mobile advertising will hit $169 billion in the U.S. this year, an 18% growth year-over-year, and will continue to climb in years to come.
Despite worries around advertising on mobile due to Apple’s AppTrackingTransparency and increased privacy protection efforts for mobile marketing, in-app advertising has still continued to grow and will account for 82% of all mobile ad spending this year, which is around $138 billion, $5 billion more than eMarketer predicted last December.
In addition to in-app advertising, in-app purchases are also on the rise. eMarketer predicts that IAP will increase 13% in 2022, making their revenue $42.3 billion for the year.
The latest data indicates that mobile will stay as an important channel for brands and advertisers to utilize as this is a space in which consumers are continuing to spend time and money. Optimizing campaigns for mobile and in-app can only boost conversion for brands as they will reach a massive audience on a channel that is the go-to device for users everywhere.
Mobile Gamers are Spending Big on Virtual Goods
While U.S. mobile gamers are projected to spend $1 billion on subscriptions this year, they are also leaning into virtual goods. Insider Intelligence / eMarketer compared spending on virtual goods vs. subscriptions, showing mobile gamers will spend $18.83 billion on virtual goods this year. With big brands like Nike and Chipotle entering the metaverse, the intangible assets industry is showing momentum in the gaming industry.
Total in-app spending in the U.S. will reach over $42 billion this year — with gaming and non-gaming apps at a tie. According to eMarketer, more than half of this spending will go to virtual goods — indicating users’ willingness to spend on products that don’t entail physical manufacturing and supply chain considerations.