• How can developers, along with content and ad publishers, respond to privacy regulations and Apple’s restrictions for collecting data?
  • Do you work in the Advertising, Media, and Marketing industry? 

As consumers spend more time than ever on their phones, app developers, retailers, and brands face a slew of new challenges in turning that attention into dollars. Changing consumer preferences and a reduced ability to target mobile ads to iOS users will lead to new monetization strategies, such as subscriptions and embedded commerce.

Read on to learn more about these mobile ad market trends.

What is mobile advertising?

Mobile advertising is commercial and promotional messages delivered through mobile devices.

Because consumers have shifted their focus to primarily mobile services, marketers have adapted to serve multichannel strategies to keep up with the demand. The US mobile ad market will reach $168.88 billion in 2022, accounting forthwith 67.9% of total digital ad spend, according to our forecasts. Insider Intelligence estimates that US mobile ad spending will reach $247.68 billion through 2026.

What is Apple’s Identifier for Advertisers (IDFA)?

Apple’s Identifier for Advertisers (IDFA) is a unique tag for tracking users across apps. Previously, users had to opt out of data collection via Settings, but iOS 14.5 requires apps to explicitly prompt users (through the AppTrackingTransparency [ATT] framework) for consent—resulting in far fewer willing to say yes.  

How will ATT affect the mobile ad market?

ATT won’t keep advertisers away from mobile ad spending, which will still grow quicker than desktop this year, at 13.8% compared with 8.1%. But mobile ad dollars will be allocated differently, either to different operating systems like Android or to different formats like contextual advertising.

How apps will shift away from mobile ad dependency

Making money through mobile ads has gotten harder, so many developers will place bets that consumers are ready to sign up for even more subscriptions and to buy things directly through their apps.

The early 2021 arrival of Apple’s AppTrackingTransparency (ATT) framework limited the collection of iOS user data, effectively making the personalized advertising that has driven app economies much less cost-effective. Some app developers—particularly those in the gaming category—have banked on consumers’ increased comfort with subscriptions as a result.

Sensor Tower estimates that 29% of the top 100 games by US App Store revenue monetized via subscriptions in 2020, up from 17% in 2018. Expect to see this trend continue in the coming year with more subscription-based apps in gaming, media, fitness/wellness, and perhaps even social media, where Twitter Blue represents an early tentative effort. Even so, consumers may be nearing a limit on how many subscriptions they’re willing to buy.

Social media apps, meanwhile, will double down on ecommerce. Most social media apps have already introduced some payment options, with Facebook also expanding Facebook Pay for use outside its platform. Facebook, TikTok, Snap, and YouTube are also exploring new ecommerce media that can be accessed via mobile—such as livestream video, clickable images, and influencer stores—many of which can produce direct revenue streams. We expect US social commerce sales to increase 24.9% in 2022 to nearly $46 billion.

Financial companies will try to mitigate mobile ad revenue losses by integrating elements of commerce into their financial services portfolio apps—building what are known as super apps, or all-in-one digital ecosystems of products and services. Klarna and PayPal both revamped their apps in fall 2021 with additional shopping features, but Square, Affirm, Revolut, and others are also making noise about becoming super apps. In the future, these apps will likely add additional shopping, travel, and health marketplace features.