It’s the beginning of a new year, which means everyone is making trends and predictions reports for what’s in store for 2024. Companies, big and small alike, are rushing to take a stab at prophesying the good, the bad, the ugly, and the beautiful that await the mobile app industry in the next eleven months.
Of course, there’s no denying that it makes for fairly interesting and informative reads, and it’s simply good business, after all.
But, all jokes aside, it’s vital that you get ready for 2024. We are still just in the third week of January (at least, at the time of publishing 😃), and things haven’t really started picking up steam yet, but we all know that’s going to happen sooner or later, and you’d better be ready.
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So, I decided to make the ultimate sacrifice—with great dignity and valor, I’ve braved the treacherous seas of the Internet for you, I’ve searched far and wide, climbing the highest digital mountains, traversing the most perilous of online rivers, crunching data, reviewing and comparing countless speculations, opinions, and conjectures… I’ve even run out of synonyms.
From reports, whitepapers, and guides to blog posts and social media, I’ve read it all and I can finally say that I’ve done it—I’ve produced the ultimate trends and predictions guide for 2024, replete with data, backed up by graphs, supported by testimonies, chock-full of ideas, hopes, and expectations, filled to the brim with useful resources for you to check out and further reading to dive into once you’re done here.
So, without further ado, let’s dive into Business Of Apps’ app market trends and predictions for 2024.
1. Hope is in the air: Return to growth
I like to start on a positive note, no point killing the mood from the get-go, so here goes: 2023 saw a record $533 billion spent on mobile across app stores and advertising, according to data.ai’s State of Mobile 2024 (always a solid read, go check it out for sure).
The mobile app economy is now a half-a-trillion-dollar market, with nearly $1.5 billion in spending per day, 257 billion total downloads (+1% YoY), and an impressive 5.1 trillion in-app hours (+6% YoY). Across revenue, downloads, and time spent, the app economy showed resilience and a strong capacity for growth and expansion despite the economic fluctuations and geopolitical turbulence of the last year.
2023 Mobile landscape at a glance
For a quick breakdown, consumer spending peaked at $171 billion (+3% YoY) following a 2% YoY dip in 2022. Mobile ad spend, for its part, hit $362 billion, representing an 8% YoY increase. Overall, apps outpaced games, driving the rebound in consumer spend at 11% YoY to $64 billion.
As our friends at data.ai note, the upward trend in app store spend is particularly encouraging given the unprecedented decline we witnessed back in 2022.
Consumer spend breakdown
So, relax, it’s not all doom and gloom. The app economy is looking stronger than ever going into 2024, with plenty of venues for (further) growth and opportunities for expansion as we will see just a few paragraphs down, so keep reading. ⬇️
2. New monetization trends and the social apps boom
So, things are looking up, right? But what do you do with that information? Where do you go from here? How can you dip your hands in this proverbial honeypot of potential mobile growth and expansion? What proactive strategies should or could you implement to win more users and retain them long-term in 2024?
First off, that’s a lot of questions. Second, I am glad you asked and will happily oblige by answering them all…
Let’s start with social media. 2023 was a year of great changes for the creator economy, with many new pathways to monetization beyond good old-fashioned advertising seeing the light of day.
Current and future spending on social media
Source: Insider Intelligence | eMarketer
Unsurprisingly, TikTok laid the groundwork, pioneering the content creator “tipping” mechanism. This ingenious move on the part of the social media giant propelled the platform to $10 billion in lifetime spend.
As competition to find new ways to entice people to spend their hard-earned buck accelerates, direct consumer monetization in social apps through in-app purchases is set to grow to 150% to $1.3 billion in 2024. Of course, this is not isolated to just one sector, with genres including entertainment, social media, health and fitness, and generative AI, to name a few, all set to see rapid growth in 2024.
As more and more AI tools are released on the market and their capabilities grow increasingly more sophisticated, the use of AI for content generation is also set to ramp up, but more on that below.
3. AI, AI, AI, AI, AI (ChatGPT wrote this heading for me 😃)
Now then, onto the real juicy stuff. Time to talk AI.
It’s been on everyone’s lips, mouths, minds, souls, and hearts for well over a year now, and it’s highly unlikely that this will change anytime soon. Just a hunch on my part here, but AI was probably the most discussed topic of 2024.
2024 is likely to be AI’s breakthrough year, with leading mobile brands expected to push the bounds of user engagement performance and results by embracing innovative applications of predictive AI and generative AI, according to Sharon Panelo, Senior Director, Strategic Consulting at Braze.
As we’ve noted above, user engagement and content generation (think video, images, copy, etc.) are first in line for a complete makeover. But that’s just the beginning. Automating your marketing stack, streamlining idea generation and ideation processes, boosting teams’ efficiency and effectiveness, making data analysis and visualization easier than ever before, producing emails, push notifications, or ad creatives faster than we’ve ever thought possible, I can keep going, but you can tell already that the sky is the limit.
AI tools are being produced at breakneck spread, improvements and enhancements are coming in constantly—everything you need to succeed is already out there or about to be. Things are definitely looking up for the app industry in 2024, but don’t leave anything to chance. Stay lean, stay agile, and make the most of the newest technologies to guarantee your success.
But enough of me yapping about AI, you’ve probably heard… read it all before, so let’s move on to something different, something more interesting, something spicier, something… you get the idea!
Research by McKinsey shows that personalization is going to be your litmus test of success going into 2024. Users are demanding personalized interactions, with 71% of consumers expecting tailored experiences and 76% getting frustrated when they don’t get the personalization they are looking for.
So, while acquiring new users is still going to be crucial moving into 2024, achieving sustainable growth by prioritizing long-term engagement and retention, fostering user loyalty to prevent churn, and combatting the effects of fewer user data points (more on that in a second) will be even more important. To put it in other words, personalization to enrich the user experience and story-based creatives, delivered in a way that captures users’ attention, will carry far more weight now than ever before.
Offering an exceptional user experience (UX) is quickly becoming a top priority for brands in 2023 as a way of fortifying their existing user base. After all, why neglect the very users you’ve spent countless dollars acquiring? You should also consider that acquiring a new user is 5-25x more expensive than retaining an existing one while increasing retention by 5% can increase profits from 25-95%.
As we move into 2024, the crucial element for effective app strategies will lie in the ability to deliver personalized experiences from ad to purchase, as noted by our friends at Phiture. Investing in user experience and raising your app’s retention rate can have a major impact on your bottom line, especially in light of the ongoing economic slowdown. And what better way to increase retention and offer better UX than through personalization and by optimizing the user journey?
In 2024, marketers should focus on uncovering obstacles and pain points in their user journeys that cause users to churn. By leveraging customer engagement technology, first-party data, and understanding communication channel preferences, marketers can then optimize and improve the mobile experience using additional touchpoints and/or reminders where necessary. Interacting with users on their terms and listening to their feedback will allow you to cultivate critical relationships and have a substantial impact on your user lifetime value (LTV) and long-term loyalty.
Go further and beyond: Check out this post for a case study on personalization done right!
5. Channel diversification will be more important than ever
Going hand-in-hand with personalization, channel diversification is another key way to ensure long-term brand loyalty and user retention. Users are omnichannel these days, so you should be too. Brands that take a cross-channel approach and blend in-app and out-of-app (e.g., in-app messages, email, SMS, push notifications, etc.) communication combined with audience segmentation also see more installs, more purchases, higher retention, engagement, and user loyalty as well as better LTV and user value.
Diversifying your channel mix will also allow you to expand your reach, attract as many new users as possible, and engage your existing ones across multiple platforms. Worthy channel diversification tactics to consider coming into 2024 include web-to-app, loyalty programs, AI- and VR-driven mobile marketing, and CTV (connected TV).
6. User privacy will be front, right, and centre: SKAN and the Privacy Sandbox
I’ve said it before, others have noted it, and you probably know it yourself too, but 2024 will be the year of user privacy… I think someone said the same about 2023… or was it 2022…
Many big companies have recently found themselves fined over breaches of privacy regulations, especially in the EU. From TikTok, Meta, and Microsoft to Alphabet (Google’s parent company), Apple, and Amazon, everyone has got caught in the regulators’ crossfire in 2023.
Go further and beyond: Check out this post (after you are done here, of course!) for a comprehensive overview of all the recent court cases against big tech.
Combine that with the increasing demand for transparency on the part of users, Apple’s upcoming SKAN 5, and Google’s Privacy Sandbox, and you can easily see why there will be no more deterministic data points for the entire funnel in 2024.
Instead, app marketers will have to rely more on bottom-up measurement methodologies (e.g., SKAN). Additionally, having an MMP (mobile measurement partner) will become more important than ever to help app marketers and developers alike navigate the treacherous seas of UA, ROAS, and campaign attribution. In other words, bringing privacy and measurement together should be your top priority going into 2024.
7. Third-party app stores are coming to Apple
In compliance with the EU’s Digital Markets Act (DMA), Apple will be required to give up its tight control of software on the iPhone and iPad. The tech giant is, of course, going to keep resisting government pressure to open up its devices to third parties, but this precedent is certainly going to embolden other governments around the world to push similar mandates.
Apple still has an ace up its sleeve, though—most consumers are unlikely to switch from the official App Store unless they are given a very good reason to. However, upcoming app stores may well offer developers special perks and deals to persuade them to jump ship, so Apple better prepare. The tech giant’s biggest priority over the next couple of months will be to keep its developers loyal and satisfied—perks for App Store developers are definitely on their way, so keep an eye out for those. (Let me get you started: see ‘contingent pricing’ or outside payment methods.)
Of course, there is still a threat from big developers like Epic Games. Epic could potentially make their apps exclusive to their own app store, leaving users with no other option but to buy from them. But we will cross that bridge when we get to it.
Key takeaways: Get ready for 2024!
Well, we’ve done it—we’ve just covered everything you need to get ready for the year ahead… now, what’s left is for you to heed my advice, amend your marketing strategy accordingly, be consistent and meticulous in the implementation, and stay agile to quickly and easily adapt to whatever 2024 throws at us.
Yeah, maybe the toughest part is still ahead of us… well, you… I don’t have an app but will make sure to keep an eye on how you’re all doing.
Best of luck out there. And for those of you who didn’t have ten minutes to read the whole post, here’s a TL;DR.
- Privacy changes and the economic slowdown are all going to reshape the mobile marketing world going into 2024. But there’s still hope. The app industry showed resilience and capacity to adapt in 2023, and there are plenty of opportunities for growth and expansion for those creative and bold enough to seize them.
- Implementing existing and emerging AI tools into your marketing stack will help teams stay efficient, consistent, lean, and adaptable, allowing them to deliver quickly and at scale.
- Creating a new measurement framework that combines top-down and bottom-up methodologies should be a key goal for mobile marketing teams in 2024.
- Boosting the user experience through personalization should be a top priority for any mobile marketer worth their mettle.
- Resourcefulness and efficiency are going to be the name of the game in 2024. Focusing on long-term retention and engagement, providing strong user value, and diversifying your channel mix through lifecycle efforts that span across email, SMS, push notifications, etc. will grow in importance.