New year, new trends. What does 2023 hold when it comes to mobile ad spend? Read the latest — and greatest — trends on how mobile marketers will be spending their ad budgets in the new year so that you can better spend yours.
But, first, let’s talk about the economy
Any ad spend trend report would not be complete without acknowledging the current state of the economy. In 2022, inflation hit all-time highs and no market was immune to its effects — including the mobile ecosystem. According to data from Apptopia, in 2022, the average price of in-app purchases (IAP) jumped an average 40% year-over-year on the iOS App Store and 9% on the Google Play store in the U.S.
Despite inflation, mobile ad spend will continue to grow in 2023 and beyond. According to recent data from eMarketer, mobile ad spend is projected to reach just under $195 billion in 2023. This represents a 14.5 % year-over-year increase from mobile ad spend in 2022.
Source: eMarketer
As said by YouAppi CEO, Moshe Vaknin: “As inflation rises, so does the value of retargeting.” For marketers planning their budgets for 2023, the increase in IAP costs presents a unique opportunity to invest in mobile app retargeting ad spend to drive additional sales and cut down on acquisition costs.
The TLDR?
Your brand should be investing in retargeting campaigns in 2023 to navigate the current state of the economy.
1. Connected TV and video
Connected TV (CTV) is having a moment. As noted by YouAppi CMO, Nancy Roberts, in Grit Daily, in 2023, CTV will reach a crucial tipping point. While the promise of CTV ad space has been anticipated for years, in 2023, streaming services will finally get more ad-friendly. Consolidation, inflationary pressure, and streaming services’ newfound willingness to experiment with alternative revenue models has poised mobile marketers to see CTV ad inventory scale in the new year.
The consolidation and enhanced measurability of CTV campaigns comes at an ideal time for marketers. According to eMarketer, CTV devices including Roku, Apple TV, Google Chromecast, Amazon Fire TV, and Smart TVs are all projected to grow in new usership from now through 2026. Amazon Fire TV will gain the most, moving from 103.8 million to 120.2 million monthly users.
Furthermore, while CTV and mobile currently account for 50.8% and 33.3% shares of daily digital video time, over the next two years, this ratio is expected to change to 52.8% and 32.9%. This indicates that CTV is not only growing but absorbing mobile market share.
The TLDR?
In 2023, look into diversifying your retargeting ad spend on CTV. If CTV ads are still out of reach for your brand, then focus more budget on video ads. According to eMarketer, US video ad spending on mobile devices is predicted to increase from $48.18 billion in 2022 to $73.14 billion by 2026. Predictions hold that the percentage of total video ad spending will likely decrease, however, as connected TV assumes more and more market share.
2. Mobile commerce
As consumers increasingly prefer to shop wherever and whenever they want from their mobile devices, mobile commerce has emerged as a powerful channel of revenue. According to Square, 98% of consumers want to connect with businesses through their mobile devices. There are currently 182.5 million mobile buyers in the US according to eMarketer. And, this number will grow: 30% of consumers reported that they expect to shop more through their mobile devices over the next 12 months. Smartphones are projected to capture 87.2% of mcommerce sales in 2023 and 92.0% by 2026. Finally, retail mcommerce sales are expected to hit $470.97 billion in the US. This represents 40% of all retail ecommerce sales.
The TLDR?
For all apps, mobile commerce apps present a key opportunity to capture and re-engage users across the mobile ecosystem. For retail apps, it’s time to double down on building relationships with consumers via mobile media.
3. Mobile gaming
Mobile gaming continues to be a growing and profitable segment of the mobile economy. As reported by VentureBeat, in 2023, the global number of mobile gamers is expected to surpass the three-billion mark for the first time in history. Given this continued growth in adoption, mobile gaming ad spend will increase. Worldwide mobile ad spend is projected to rise from $61.6 billion in 2022 to $130.9 billion in 2025 according to Statista. Notably, according to Tapjoy, half of today’s mobile gamers say they prefer an ad-supported model over pay-to-play games or those based primarily on in-app purchases.
The TLDR?
Given the preference for ad-supported models, game developers should consider monetizing their apps through ads if they don’t already do so. This will open up even more high quality ad inventory as the mobile gaming user count continues to grow. For all app marketers, in-app advertising (IAA) in mobile games is a valuable channel.
Takeaways
What does 2023 hold when it comes to mobile ad spend? Despite inflation, mobile ad spend will continue to grow in 2023 to just under $195 billion. This represents a 14.5 % year-over-year increase from mobile ad spend in 2022. Furthermore, app marketers should consider investing their retargeting ad spend dollars in the following categories:
- Connected TV and video: In 2023, streaming services will get more ad-friendly and viewership will continue to increase across services. App marketers should diversify their retargeting ad spend to CTV. If CTV ads are still out of reach, then focus more budget on video ads.
- Mobile commerce: Smartphones will capture 87.2% of mcommerce sales in 2023 and 92.0% by 2026. For all apps, mobile commerce apps present a key opportunity to capture and re-engage users across the mobile ecosystem. For retail apps, it’s time to double down on building relationships with consumers via mobile media.
- Mobile gaming: In 2023, the global number of mobile gamers is expected to surpass the three-billion mark and worldwide mobile ad spend is projected to rise from $61.6 billion in 2022 to $130.9 billion in 2025. Given users’ preference for ad-supported models, game developers should consider monetizing their apps through ads if they don’t already do so. For all app marketers, in-app advertising (IAA) in mobile games is a key, valuable channel.
Optimize your retargeting ad spend in 2023
YouAppi’s team of retargeting experts can help identify key channels for your brand’s advertising campaigns based on the latest trends. Reach out to us to get started today.
