Mobile ad spend leapt 23% in 2021, on track to hit $350B this year

Dive Brief:

Mobile ad spending saw 23% year-over-year growth in 2021, reaching $295 billion, according to App Annie's State of Mobile 2022 report out this week. The analytics company predicts mobile ad spending will notch $350 billion by the end of this year, spurred by a continuation of pandemic-induced changes to users' habits.
Consumers globally spent 3.8 trillion hours on mobile in 2021, with 70% of that on social and photo or video apps. Buzzy social video platform TikTok and Facebook led the pack in terms of average monthly hours per user, with each totaling 19.6 hours last year.
Meanwhile, consumer spending across app stores grew 19% in 2021, hitting $170 billion. Downloads were also up last year, growing 5% over 2020 levels as mobile users downloaded 230 billion apps worldwide. TikTok ranked the No. 1 most-downloaded app globally, followed by Instagram and Facebook.

Dive Insight:

People are spending more time than ever before on mobile apps, reaching 4.8 hours per day in the top mobile-first markets, such as Brazil, Indonesia and South Korea. As consumers continue to migrate both their attention and wallets to mobile devices and platforms, a mobile-first strategy is vital for many marketers to thrive in a quickly changing society driven by pandemic-fueled transformation.

Advertisers are taking note of the broad reach and engagement apps can offer, investing in mobile ads at a 23% higher level compared with 2020, despite concerns around Apple's privacy changes and mobile addressability. App Annie predicts this year will continue on a similar trajectory, blowing past records in mobile ad spending, downloads and time spent on apps.

Consumers are interacting with apps at a higher level than previous years, and even topping the time they spend watching TV in some cases, the analytics company found. The average American watches 3.1 hours of TV per day, per App Annie, but over the course of 2021, they spent 4.1 hours on a mobile device on sites ranging from streaming to social media. The report's findings mirror a recent statistic showing TikTok overtaking Google as the most-visited website in the world, suggesting it may sustain its momentum as consumers shift their media preferences to shorter-form vertical content.

"Mobile is ... the go-to device of the future. The big screen is slowly dying as mobile continues to break records in virtually every category — time spent, downloads and revenue," App Annie CEO Theodore Krantz said in the report.

The increased time spent in apps directly impacted consumers spending, the report suggests. In the U.S. and elsewhere, the enduring pandemic continues to force many people to shop, work, stream, game and connect from home, steering significant growth in downloads and mobile spending.

Meanwhile, interest in the metaverse has propelled top avatar apps with 160% YoY growth, per App Annie. It's a trendy but nascent topic that brands like Procter & Gamble, Nike and Coca-Cola have raced to explore — though just 38% of global consumers are familiar with the tech, according to a September report from Wunderman Thompson Intelligence.

"Mobile brings us closer together whether virtual or in person," Krantz said. "The future will be based on an immersive entertainment experience you create. You won't watch movies, you'll star in them."