The frenzy for smartphones and tablets is creating a skyrocketing market for mobile apps. According to Gartner, revenue from mobile apps will top $15 billion in 2011, and surpass $58 billion within three years. The dramatic growth of the mobile apps market brings with it a sharp increase for the mobile ads market as well.
Above and beyond the general growth of smartphones and tablets, there are also some specific events occurring that will fuel the demand for apps. First, Apple is incorporating the apps culture into the next release of Mac OS X, and emerging platforms like Google’s Chrome OS will utilize apps as well. Basically, apps are not just for smartphones and tablets any more.
Mobile app developers favour Android over iOS
The second factor that will drive mobile apps–and, therefore, mobile ads–is the Verizon iPhone. Michael Chang, CEO of Greystripe volunteered this insight. “Analysts estimate 9 million to 12 million Verizon iPhones will be sold in 2011, most of which will be to new iPhone users. For advertisers, this means that they will be able to reach 50 to 70 per cent more of their target customers,” adding, “For iPhone app developers and mobile web publishers, the Verizon iPhone presents an opportunity for at least doubling ad revenue in 2011 alone.”
With an eye on the exploding apps market and the opportunities for mobile ad revenue, Greystripe teamed up with Media Networks Inc. (MNI). MNI–which is a Time Inc. company–is a leader in targeted marketing based on specific demographics and geolocation.
A Greystripe press release about the partnership quotes Greg Sterling, senior analyst with Opus Research. “Location is the ‘killer app’ for mobile advertising. Being able to deliver visually rich, engaging ads to mobile consumers creates a great opportunity to influence both their immediate and longer-term purchase decisions.”
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The press release also includes this analysis from Mike Boland of BIA/Kelsey. “We project mobile advertising to be a $1 billion market in 2011, and locally targeted ads will be the fastest growing segment of that pie. Greystripe’s mobile ad platform will mobilize MNI’s client campaigns, and let them reach target audiences where they are.”
Obviously, an explosion in the mobile advertising market is good for companies like Greystripe and MNI, as well as providing advertisers with an effective marketing platform to reach potential customers. However, mobile ad revenue is also a huge benefit for mobile app developers–enabling even free apps to generate residual income through ad placement.
In effect, the explosion of the mobile apps market creates opportunities for the mobile ads market, which in turn drives revenue for the mobile apps market–creating a self-feeding circle to help the mobile apps market hit the kind of numbers Gartner is predicting.