Mobile ad spending hits record high
By Ibidunni Banjoko
Global mobile ad spending surged to a remarkable $362 billion in 2023, marking an 8% increase from the previous year, according to insights from Data.ai’s State of Mobile 2024 report. The growth was primarily driven by revenue generated from short-form video and video-sharing apps. Projections indicate that this upward trend will continue, with mobile ad spending projected to reach $402 billion in 2024, representing an 11% year-over-year increase.
In tandem with the rise in ad spending, mobile consumer spending also witnessed a significant uptick, reaching $171 billion in 2023, marking a 3% year-over-year increase. The report highlights the growing attention towards social apps and the creator economy, which are emerging as new avenues for monetization beyond traditional advertisements.
Moreover, generative AI experienced explosive growth in 2023, with innovations such as AI chatbots and art generators fueling the integration of new features across various mobile sectors.
However, despite these positive trends, the mobile app marketing ecosystem faced unprecedented challenges in recent years. Apple’s introduction of the App Tracking Transparency (ATT) framework in April 2021 significantly impacted marketers’ ability to measure and optimize their campaigns, shifting the focus from user-level data optimization to aggregate data. Although alternative measurement solutions have emerged, confidence levels among marketers have yet to return to pre-ATT levels.
The Covid-19 pandemic further disrupted the mobile landscape, leading to rapid digital acceleration worldwide due to lockdowns and social distancing measures. While mobile apps capitalized on aggressive user acquisition campaigns during this period, a post-Covid digital cooldown ensued, with digital usage returning to pre-pandemic levels.
Adding to the complexity, the global economic downturn and rising inflation rates in 2022 had a profound impact on mobile businesses. Many consumer-facing mobile apps responded by reducing marketing budgets and staff, further compounded by the shock to the global economy caused by the war in Ukraine.
These developments contributed to significant volatility in the mobile advertising market. Between 2020 and 2021, Covid-19 and ATT shaped ad spend trends. Despite industry adaptations, the market saw a 5% drop in 2022 following a 40% leap in 2021.
Overall, while mobile ad spending has reached record highs, challenges such as regulatory changes, economic uncertainty, and evolving consumer behaviour continue to shape the landscape, necessitating adaptive strategies and resilience within the industry.
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