App-install advertising – from non-existent to $118bn in less than a decade

A new report is predicting a huge boom in app-install advertising. The takeaway: Want a successful app? You’ll need an app marketing plan.

Can you believe it’s seven years since the world went crazy for Flappy Bird? The simple – and agruably terrible – game went viral in 2013. By January 2014, it was the most downloaded free game in the App Store for iOS. It was earning $50,000 a day from in-app ads.

Flappy Bird’s creator Dong Nguyen didn’t plan it this way. In fact, he withdrew the game from the app stores after becoming embarrassed and ridden with guilt at its addictive nature.

The Flappy Bird story reveals the power of word of mouth in our hyper-connected era. The truth is, viral hits are accidents. No app developer can design for word of mouth – especially when there are 2.9 million on Google Play.

So the question is: how can any app stand out? There’s only one credible answer: throw money at it! 

Today, there is a huge market for app install advertising. And it’s growing fast.

According to new research by AppsFlyer, 65 percent of installs for small apps in 2019 were ‘non-organic’. The company is now predicting a big surge in annual spend on this specific type of advertising: from $57.8 billion in 2019 to $118 billion in 2022. App install ad spend will account for almost a third of all mobile ad spend by this point.

These are amazing numbers. They reflect the huge scale of the global app economy and the accompanying rise of sophisticated tools through which to reach its billions of consumers.

The app install ad revolution really started when Facebook got into the game in 2012. Facebook saw that its users were going mobile so it launched ads that would link (via a click) directly to the download page of the relevant app store.

It worked brilliantly. Within a couple of years, the new ad format was helping Facebook to earn $1.37 billion a year from mobile advertising.

Today, app install ads are commonplace. But the market is still evolving. According to AppsFlyer, its next phase will almost certainly be driven by developing economies. AppsFlyer says India, China, Indonesia, and a host of countries in Africa will lead the charge, adding hundreds of millions of connected users by 2022.

It predicts APAC alone will grow by 27 percent year-over-year to command more than half of global budget in two years’ time.

AppsFlyer says there are nine trends that are most impacting the evolution of app install advertising. They are:

  1. The native app experience
    Native delivers the most time spent, best user experience and highest ability to foster long term loyalty.
  2. Broken organic app discovery
    The odds of the average app being discovered organically in the app stores is almost non-existent.
  3. Data confidence
    Analytics are constantly improving giving marketers increased confidence to invest in marketing and drive returns.
  4. Gaming explosion
    40 percent of all marketing spend is on games. This is not about to change. 5G will also propel gaming forward.
  5. Competition in developed countries driving up costs
    It’s getting pricier to buy media.
  6. Pressure to meet demand in developing countries
    Millions of more connected users are coming online.
  7. Programmatic on the rise
    Programmatic ad bidding is a very small percentage of the total app install market. But it’s growing.
  8. Fraud protection
    Sadly, the growth in app-install ads has been accompanied by a rise in app-install fraud. Criminals use methods such as presenting installs of fake users to earn ad revenue.
  9. Revenue stream proliferation
    There’s a limit to the number of users prepared to pay for apps/in-app content, so more developers than ever are turning to advertise.

Calldorado is at the center of this booming mobile ad economy.

The award-winning Caller SDK presents your app to users in relation to phone calls. It serves features relevant to ongoing, missed, or finished phone calls, in a way that makes sense, adding value for the user.

Ultimately, the SDK improves engagement with your app. And that means the potential for more sustainable ad revenue.

Want to find out more? Get in touch.