In-app advertising plays a crucial role in app monetization. According to most recent market data, it brings in two-thirds of global mobile app revenues and provides a lifeline for many media and games publishers.
was estimated at 315 billion U.S. dollars in 2023 and is expected to enjoy a double-digit growth rate until 2027. By a wide margin, China and the United States are the
, accounting for more than a third of the segment value each. The top three are rounded up by the United Kingdom, which only comes to less than five percent of the total.
A necessary evil
Games are arguably the most controversial platform for advertising. Gamers cannot decide if they are
happy with the ads because they make sure the games they enjoy stay free of charge or hate them for disrupting the gameplay or distracting users. Players pick intrinsic ads – those blending brand messages into game environments – as the
most effective and brand interstitial ads – full-screen displays that cover the app interface – as the
most disruptive. Regardless, the mobile gaming industry is, to a great extent, dependent on advertising. Publishers readily admit that video and display ads are
leading gaming app monetization methods, beating in-app purchases and subscriptions as the most popular non-advertising techniques. In total,
advertising brought the mobile gaming industry approximately 3.5 billion dollars in revenue in 2023. Nearly two-thirds of this sum was invested in Asia, followed by under 30 percent in the U.S. and Canada.
A profitable side hustle
In times of raging
inflation and a cost-of-living crisis, when brands need to fight even harder for a share of the shrinking consumer spending, adding a revenue stream in the form of advertising services have begun attracting companies from industries other than gaming and media. Retailers with online platforms, whether desktop or mobile, increasingly incorporate not only banner ads but also sponsored products and brands. Shopping apps attracted 30 billion dollars in ad spending in 2023, making them the third most invested-in app category behind
social media and mobile games.
Amazon, a pioneer of this practice, now accounts for a third of the global retail media market value but faces growing competition as other retailers, such as
Walmart,
Zalando, or
Carrefour, grab the opportunity and build up ad businesses.
Tapping into new markets
Ride-hailing and food delivery companies have also started allowing brands to advertise in their apps.
Uber Technologies launched its ad division in 2022 and, as of mid-2023, attracted over 400 thousand advertisers across all its platforms, including Uber, Uber Eats, and Drizly. The company will work with
Omnicom Media Group to support advertising efforts. According to projections, Uber is expected to generate a billion dollars with its
retail media offering in 2024. European giant
Delivery Hero was already there in 2022, reporting 920 million euros in
sponsored placements revenue. Deliveroo is also making its first positive experiences, writing 40 million British pounds in
ad revenue in 2022 and stating in its mid-2023 earnings presentation that its ad business was one of the main reasons for growth in the first half of the year.
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