The digital economy in 2024 is confirmed as a runaway train that shows no signs of slowing down; in fact, it seems to have shifted into high gear, shattering record after record and hinting at a future of exponential growth. Consumers, now inseparable from their smartphones, spent more than $100 billion on mobile apps in less than 250 days, a milestone achieved with impressive speed compared to previous years. This figure testifies to the centrality of mobile in daily life and the unstoppable rise of the app market. Digital advertising is also riding this growth wave, registering a double-digit increase and confirming its effectiveness in reaching an increasingly large and connected audience. In the United States, ad spending exceeded $30 billion, a 10% increase over the previous year. A clear signal that the digital ecosystem, despite global economic uncertainties, is in excellent health and continues to attract investment.
Consumer spending
Analysis of the third quarter of 2024, conducted by Sensor Tower, reveals a further acceleration of growth. Global spending on iOS and Google Play exceeded $38 billion, a 12.4 per cent increase over the same period in 2023. This is surprising, considering that the $100 billion spending milestone was reached almost a month earlier than a year earlier. But what is driving consumers to spend more and more on apps?
Certainly, there is a growing supply of high-quality apps, ranging from productivity to entertainment to innovative tools such as artificial intelligence apps. Apps, excluding games, are experiencing 25 per cent annual growth, demonstrating their ability to meet the most diverse needs of users. Mobile games, while remaining the most lucrative sector with spending of more than $20 billion, are seeing a narrowing gap with apps. This may indicate a shift in user preferences, which seem increasingly interested in exploring new types of apps.
Europe drives growth in mobile spending
Geographically, Europe stood out as the fastest-growing market in the third quarter of 2024, up 25 per cent year-on-year. This is far higher than the 13 per cent growth recorded in North America and 6 per cent in Asia. Of course, the United States remains a key market for app developers, contributing $1.54 billion in annual growth, which is more than all of Europe combined. Starting on the other side of the world, namely China, TikTok continues to dominate the mobile monetization scene; just over a year after a record $1 billion in quarterly spending, the app set a record with $1.5 billion in consumer spending in Q3 2024. The figure includes in-app purchases and subscriptions but excludes advertising revenue.
The other top apps by overall spending remain stable from the previous quarter, with Google, YouTube, Disney+, and Tinder rounding out the top 5 with TikTok in first place. However, on the download front, Instagram surpassed TikTok, returning to lead the ranking in the quarter. Another Meta app, Threads, entered the top 10 for the first time, while ChatGPT climbed four positions, itself ranking in the top 10. Other AI-related apps also gained ground, with Google Gemini posting one of the largest quarterly download growths. Overall, AI chatbot and AI art generation apps exceeded 360 million downloads and generated $315 million in spending in Q3, with quarterly increases of 15 per cent and 26 per cent, respectively.
How advertising grows
Digital advertising spending continued its strong growth in Q3 2024, with the US market leading the charge. Total spending across mobile, desktop, and OTT (over-the-top) platforms nearly reached a staggering $30 billion, driven by a 17% increase in ad impressions. This represents a 10% year-over-year growth, suggesting that Q4 could shatter records during the holiday season.
Other markets also demonstrated robust performance. The UK saw a 10% year-over-year increase in digital ad spending, while Germany and Canada experienced 7% and 6% growth, respectively. Furthermore, the report expanded to include Japan and South Korea, highlighting the continued growth of digital advertising in Asia.
In terms of app categories, Productivity, Entertainment, and Photo/Video apps stood out with impressive spending growth rates exceeding 30%. Honor of Kings maintained its dominance in the gaming world, but six titles surpassed $400 million in quarterly spending. My Supermarket Simulator 3D made a noteworthy debut, becoming the only new entry in the top 10 downloads for the quarter.
