US in-app ad spend set to soar, outpacing in-app purchases -report

In the United States, in-app ad spending is poised to reach an impressive $159.24 billion in 2023, dwarfing in-app purchases, which are projected to amount to $42.37 billion, according to Insider Intelligence’s forecast. This stark contrast highlights the dominant role of in-app advertising in the mobile ecosystem.

While in-app advertising remains the primary revenue driver, in-app purchases are on the ascent. In particular, the gaming sector has been a significant contributor to this growth, with gamers increasingly making purchases within mobile apps. Unsurprisingly, a recent report indicates that 77% of players make in-app purchases within the first two weeks of downloading a game. 

Gaming experienced robust growth during the pandemic, attracting a surge in engagement and in-app spending. However, in 2022, a dip in gaming activity resulted in a corresponding decline in virtual goods spending. 

In-app advertising is set to maintain its healthy growth trajectory, with a projected increase of 14.8% in 2023. This surge equates to an additional $20.52 billion in ad sales compared to 2022, underscoring the sustained appeal and effectiveness of in-app advertising. A report that analyzed data between H2 2022 and H1 2023 showed that in-app purchases increased by 24% while eCPMs decreased by 26%. Also, global in-app consumer spend was up %5 in H1 2023, hitting $67.5 billion. 

In addition, a recent report shed light on monthly mobile subscription costs that are ticking up by 1.29% on average. Annual subscription fees have climbed by 2.3%, going from an average of $31 in January 2022 to $45 in 2023. It’s noteworthy that the United States accounts for 51% of all mobile app subscriptions. This finding emphasizes the dominant role of the US in the realm of mobile app subscriptions, solidifying its status as the primary and most financially rewarding market for services based on subscriptions.

In summary, in the US mobile market, in-app advertising is anticipated to maintain its dominance, with substantial ad spend outpacing in-app purchases. While in-app purchases, particularly in gaming, continue to gain traction, the advertising ecosystem remains a pivotal revenue source for mobile apps.