AppsFlyer's new report on global app install ad spend forecasts that app developers will invest $94.9 billion in acquiring new users in 2025, representing a 20% increase from 2023.

Several reasons contribute to this projected growth. The market is recovering from the normalization following the easing of lockdown restrictions, as consumers spent less time on their phones after the initial surge in mobile usage during lockdowns.

The report also highlights an uptick in investment in iOS after an initial decline during the release of iOS 14.5 and App Tracking Transparency (ATT), which presented challenges in user acquisition. Apps and media sources have adapted to Apple's SKAdNetwork, and its adoption is expected to reach critical mass, leading to continued upgrades and enhancements, culminating in SKAN 5.0.

Both Apple and Google are emphasizing user privacy. Google will launch Privacy Sandbox for Android in 2024, offering marketers enhanced visibility into campaign performance in compliance with user privacy.

The past year has seen increased use of data clean rooms (DCR), which enable marketers to process sensitive data in a privacy-compliant manner, allowing them to join first-party data with conversion data to regain visibility.

Furthermore, the rise of AI is enabling more measurement and campaign optimization solutions, which will play a significant role in the changing user acquisition landscape.

The growth is also attributed to the increasing mobile penetration in developing nations, with the number of smartphones expected to rise 13% worldwide from 2022 to 2025. Marketers will need to target these new users effectively to capitalize on this expansion, which will necessitate an increase in ad spending.

The report emphasizes the importance of adapting to privacy changes and targeting new users in developing nations to succeed in the evolving mobile app market.

Earlier this year, AppsFlyer also reported that consumers were exposed to $5.4 billion in app fraud in the past year.

Source: Lewis Rees, Staff Writer at PocketGamer