By 2018, spending on mobile in-app advertising alone will be greater than spending on online search advertising, today's digital advertising juggernaut, according to a joint report from App Annie and IDC.

The report, ?Mobile App Advertising and Monetization Trends 2013-2018: Freemium and In-App Ads Expand Their Lead,? said publishers have hit their stride with mobile in-app revenue growing 1.7 times in 2014. The finding offers hope for traditional publishers who have seen revenue dwindle to a fraction of what it was in the early days of the World Wide Web and more so compared with the heyday of print publishing.

?Mobile app developers can rely on the fact that they can make money with their apps, if the apps are popular,? said Karsten Weide, program vice president for digital media and entertainment at IDC. ?And there?s more money to come.? 

Researchers explored various trends to help publishers and others in the app ecosystem understand the consequences they may have on tomorrow's business decisions.

One of the report?s key takeaways was that the freemium business model drives mobile app revenue growth. Revenue from freemium apps, which give the core product away from free to a large group of users and sell premium products to a smaller fraction of the user base, surged more than 70 percent.

By contrast, paid revenue declined 19 percent, while paidmium app revenue fell 24 percent.

The maturity and general success of the freemium model are evident in its dominance of direct app revenue models. 

Mobile app revenue per device, including advertising, is projected to grow 2.5 times by 2018.

In another takeaway, mobile in-app advertising is set to overtake online search advertising.

Mobile in-app advertising revenue also grew by 70 percent, outpacing both mobile and PC browser-based ads. 

The report also drew attention to geography?s importance. Revenue generated through app stores versus in-app ads widely varies across countries. India brings in 70 percent of its app revenue through in-app ads while Japan makes more money from app stores (81 percent). 

The United States and Japan are the largest markets for mobile app revenue, but emerging markets such as Brazil, India and Russia are projected to quickly grow through 2018.

The report?s findings point to how freemium and in-app advertising both will continue to offer opportunities for developers to make money out of their apps.

In the 10 key markets the report examined, it found that in-app ads will grow by a factor of 3 times by 2018, and app store sales by a factor of 2 times.

The report is a bright spot in businesses? struggles with a lack of knowledge about how to monetize engagement over mobile.

While the most compelling reason for creating an app is real-time customer engagement, developing an app is expensive. If mobile cannot be made profitable, the business will not continue to invest in providing a good customer experience.

?Both freemium fees and in-app advertising grew by over 70 percent last year across all key markets,? Ms. Weide said. ?And that growth is not going to slow down any time soon.?