App developers shift from paid apps to advertising and in-app purchase business models

Andy Boxall | January 28, 2015

App Business

millennialmedia

According to a report published by Millennial Media, the amount of app developers and publishers monetizing their apps and sites grew by 12% in 2014, reaching 85% overall. The use of in-app mobile advertising to achieve this grew by 9%, taking the total to 82%. The use of paid app downloads have fallen to 34% from 45%, while the use of in-app payments for virtual goods increased from 33% in 2013 to 40%.

Millennial Media’s State of the Apps 2015 reveals monetization trends for 2014

MMGraph

Furthermore, 69% of developers saw an increase in revenue by using programmatic advertising platforms. Additionally, 33% use video ads inside their apps, a figure which is up by 5% over 2013, and finally, 16% turn to native advertising.The report, titled State of the Apps 2015, states developers are targeting growth in 2015, whether it’s financially, through further development, or by expanding products out on to new operating systems or devices.

Matt Gillis, the president of platform at Millennial Media, said:

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“From new app creation to new hires, developers and publishers around the world are citing “more” as their 2015 goal. Our developer and publisher partners are recognizing the vast opportunities in supporting additional ad formats – such as video and native – and making inventory available through programmatic channels. This growing and healthy state of the app economy means significant benefits for advertisers.”

Other data collected for the report highlights the most popular categories inside mobile app stores. Gaming led by a considerable margin at 86%, followed by productivity and tools at 35%. In 2015, the company expects further success from games, particularly RPG and strategy titles, followed by a rise in the popularity of health and fitness apps.

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