• Google is fighting back against apps' mobile dominance with new ways to enhance the mobile web.
  • This is important for Google because mobile search advertising is its main revenue driver.
  • The pushback against traditional apps will give brands and publishers important new ways to reach audiences and overcome declining app engagement.

Apps dominate time spent on mobile devices, but Google wants to change that. It needs to succeed for two main reasons: First, advertising accounts for most of Google’s revenue, and ads displayed alongside mobile search results provide the largest share of this income. That places Google in direct competition with apps for users’ attention. And second, though downloads from its Google Play store outstrip those from Apple’s App Store by 274%, Google earns half as much revenue from app sales, according to App Annie. So peddling apps to users of its Android mobile operating system isn’t a winning strategy, either.

bii global app revenue by vendorBI Intelligence

Fortunately for Google, there are signs that apps are losing their grip on mobile users’ attention. App retention and engagement remains low. Across all industries, 80% of all app users churn within 90 days, according to the most recent data from Localytics. And while the clear majority of time spent on mobile is in apps, the mobile web’s audience is growing — the average monthly audience on the mobile web was up 82% in the two years ended July 2016, compared to a 45% increase for apps, according to Google.

bii app retention 2015BI Intelligence

Google aims to seize this opportunity with Instant Apps and Progressive Web Apps (PWA). Discussed in depth at its annual I/O conference in May, these two emerging technologies are the focus of Google’s bid to make the mobile web more relevant to smartphone and tablet users — an effort that, if successful, could help spell the end of apps’ mobile dominance. This note will explain how [...]