Mobile Ad Growth Rate Predicted to Decline by 7.5% in 2023 / Digital Information World
As 2022 draws to a close, many pundits are trying to make predictions for 2023. Economic turmoil has led to very disturbed balances in most industries, and it appears that the mobile advertising industry is no different with all things considered and considered. The FIFA World Cup together with the upcoming Winter Olympics could boost ad spending in the next year, but despite that being the case, a slowdown is still predicted.
With all that said and now out of the way, it’s important to note that the slowdown still doesn’t mean the overall industry will go down. There will still be some growth that will bring the total value of mobile ad spending to $362 billion, compared to the $336 billion seen in 2022. Much of this growth will be a result of investments in short-form video, spurred in no small part by TikTok as well as YouTube, as reported by DataAI.
Mobile ad spending has seen a declining growth rate over the past five years. After seeing a growth rate of 26.3% as recently as 2020, this growth rate dropped to 22.9% in the following year of 2021. 2022 saw a further decline, with growth rates hovering around the 14% mark. This growth rate has now almost halved to just 7.5% for 2023, and it will be interesting to see if this trend continues which could lead to the industry stagnating by 2024 or 2025.
Another decline is seen in the world of consumer spending on gaming applications. Consumer gaming spending on apps is forecast to decline 5% this year to $110 billion due to dire economic conditions putting a huge strain on consumer wallets. This is in contrast to the recent trend which suggested a high level of resilience within this sector against economic headwinds. New privacy policies on the Apple App Store and the Google Play Store likely played a role in the slowdown in revenue, and this could shift the delicate balance of the industry.
Yet gaming apps still dominate app store charts across the board. 14 app titles managed to exceed $2 billion in annual revenue from the App Store, and 11 of them were gaming apps. Meanwhile, streaming apps are leading the charge in terms of consumer spending. Shows like Netflix, TikTok, YouTube and Disney+ have all managed to cross the $3 billion dollar mark. New entries like HBO Max and iQIYI portend a robust future for the industry, and indicate that streaming may continue to capture audience attention for the foreseeable future.
Meanwhile, the world of mobile shopping has reached unprecedented heights. Despite a subdued start to the Black Friday shopping season, mobile shopping has managed to boost performance at this critical time. Physical shopping didn’t grow much, but 50% of Black Friday sales came from mobile shoppers. Smaller merchants and businesses were even more dependent on mobile shopping, with 73% of their sales coming from that source. This reveals that mobile shopping will be a mainstay of the holiday shopping season moving forward.
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