App Annie and IDC's App Monetization Trends Report

App Annie and IDC just released a joint report highlighting app monetization trends and predictions for the future. The report provides a current macro view of app monetization and dives deep into specific monetization models such as freemium, paid, paidmium and in-app advertising. Mobile in-app advertising revenue is said to continue taking share from PC advertising revenue according to the report.

App Developer Magazine / Google

The report shows the United States will remain the leading source of mobile app-related revenue, with 3.5x growth from 2013 to 2017. Remarkable 8.7x revenue growth from 2013 to 2017 is expected for India’s mobile app-related revenue, driven largely by rapid smartphone adoption. Publishers should consider different business model strategies depending on the geographic region; India skews toward in-app advertising, while Japan skews toward app store revenue. Ad networks offer a simple way for publishers to fill ad inventory without the resources needed for media on platforms or real-8me bidding exchanges.

Revenue opportunity for publishers:

• Mobile in-app advertising grew from 2012 to 2013; PC online search

• Display advertising grew 1.1x during the same period

• Worldwide combined iOS and Android devices installed base grew 1.7x from 2012 to 2013

App revenue from in-app advertising grew from 2012 to 2013 while revenue from freemium grew 211%. Freemium is very successful even with the small proportion of users making IAPs. There is still opportunity for monetization of users following a paid download. Opportunities for app store and monetization are reported to be driven by strategies such as monetization of metrics, subscriber content streams for mobile, ecoupons, social media, augmented reality and home automation. Freemium drives a disproportionate volume of app revenue across both stores and Freemium apps are even more common on Google Play than on iOS App Store.

The latest report indicates mobile app revenue growth is still being driven by device adoption and revenue per device. Although more prevalent in games, the freemium business model has successfully expanded into other categories such as messaging, music, news, and dating. This is partially driven by “gamification” of apps, but may also reflect natural limits to what consumers will pay for upfront. Massive growth areas were also cited in areas such as smart mobile devices expanding reach for consumers. Revenue per mobile device is also increasing.