MobileAppInstallAdvertisingRevenue(US)BI Intelligence

KEY POINTS

  • Mobile app-install ads are becoming extremely popular ad units among different types of app publishers, not just game-app developers. We estimate 30% of total US mobile ad revenue was generated by app-install ads in 2014. App marketers — including e-commerce companies and a few brands — like these ads because they result in significant downloads and measurable ROI. Social networks and ad exchanges that sell them are able to do so at significantly higher prices than other ad units.
  • Spending on mobile app-install ads is steadily increasing. US app-install ad revenue will reach nearly $6.8 billion by year-end 2019, rising by a compound annual growth rate (CAGR) of 14%, from $3.6 billion in 2014, according to BI Intelligence estimates.
  • Easy-to-measure ROI drives demand. In many cases, once an app-install ad generates a download, everything a customer does in the app — that is, "lifetime customer value" — can be attributed to that specific ad. ROI will always be positive if the customer spends more than the price of the app-install ad used to acquire that user.
  • They aren't only used to generate downloads. They can be used to boost engagement among customers who already have an app downloaded. In this case, the app-install ad prompts the user to open the app instead of asking them to download it; but the mechanics are similar, and ROI is also measurable.
  • On Facebook, mobile app-install ads cost significantly more than standard units because of performance and targeting capabilities. These ads had an average cost per 1,000 impressions (CPM) of $4.10 globally on Facebook at the beginning of 2014, compared to an average CPM of $1.25 across all Facebook ad types. Mobile app-install ads had an average CTR of 0.98% during the first quarter of 2014, compared to an average CTR of 0.24% for all Facebook ad types.
  • We expect prices to hold relatively steady as supply and demand rise in tandem: The mobile install ad is a fairly mature ad unit at this [...]