AppsFlyer: App ad market to grow 136% to $64.1 billion from 2017 to 2020

The app advertising market is expected to grow 136 percent from $27.1 billion in 2017 to $64.1 billion in 2020, according to a new market research study by AppsFlyer, a mobile attribution company.

The report projects that marketing spending will grow at an average year-over-year rate of 34 percent. Growth will gradually decrease as the market matures, but it will be sustained by substantial increases in media costs and mobile usage, as well as the number of paid campaigns, apps available, and mobile users overall, AppsFlyer said.

“AppsFlyer’s App Install Predictions report underscores the growing competition in the global mobile ecosystem,” said Shani Rosenfelder, head of content and mobile Insights at AppsFlyer, in a statement. “In the increasingly crowded mobile landscape, what will separate the best from the rest is intelligent use of high-quality data to inform marketing decisions, and innovative approaches to measuring and enhancing campaigns that drive installs and valuable users.”

In North America, one of the biggest app markets, spending on as for installing apps is projected to double by 2020 and hit $12.9 billion. Similar to the global projections, the average year-over-year change in this region will reach around 21 percent.

While growth of marketing for app installs will be big, the growth rate will not match the expected rise in media costs. AppsFlyer’s data shows global non-organic (paid advertising) app installs will grow by 110 percent into 2020, while North American non-organic installs will increase by 73 percent. With both the ad spend and growth rates of non-organic installs expected to maintain the same ratio through 2020, marketers will have to be increasingly efficient in their marketing efforts amid rising media costs.

“To seize the competitive edge, marketers will need to become more data-savvy, but it’s no less essential to be threat-savvy,” said Rosenfelder. “Fraudsters are vying for billions of dollars in revenue and securing the app economy will demand ongoing monitoring and protection.”

The numbers for the forecast came from AppsFlyer’s own data, which included 35 billion installs, $10 billion in ad spend, and 70,000 apps in the sample. The company also used other parameters, such as third-party mobile attribution market share data, CPI prediction per region, number of apps in the app stores, and the number of installs.