We've all been watching the impact of the end of COVID lockdowns and Apple's privacy changes on app development and marketing efforts this year. While in-app spending fell slightly, users spent more time in their favorite apps, and downloads remained flat or increased slightly.
So, what can we expect in 2023? Here are some predictions from industry professionals.
1. Global Mobile Ad Spend will reach $362 billion in 2023
As more time is spent in apps than ever before, mobile will take over the advertising wallet, with total hours on the track to exceed 4 trillion on Android phones alone by 2022. However, ad spending growth will slow due to economic headwinds.
Midterm elections and marquee sporting events — the Beijing Winter Olympics and the FIFA World Cup — are expected to drive high spending in 2022.
Spending on brand advertising will help to mitigate the effects of reduced spending on performance marketing as marketing budgets tighten.
2. Retail Dollars Will Migrate to Experiences in 2023: Travel, Events, Sports, and Meditation
On Black Friday 2022, mobile shopping reached an all-time high, accounting for nearly 50% of all sales among the top 100 internet retailers in the United States. According to Shopify, mobile accounted for 73% of global sales for smaller merchants and direct-to-consumer (DTC) brands.
With mobile commerce paving the way, consumers will shift their wallet share from goods to consumables and experiences as discretionary income is squeezed due to layoffs and rising living costs.
In the 'post-covid' normalization, travel will continue to command a share of the wallet. Live events, such as concerts and shows, will take precedence over in-home purchases. Live sports will captivate audiences both in person and on-screen.
The use of meditation apps is expected to increase in 2023, as consumers prioritize an experience of calm and stress reduction amid a stressful economy.
3. Economic headwinds and privacy regulations are expected to reduce mobile gaming spending in 2022 and 2023
Consumer spending on mobile gaming is expected to fall -5% to $110 billion in 2022 as a result of the economic downturn. Spending in 2023F is expected to fall 3% year on year to $107 billion.
Historically, spending on games has been resilient during economic downturns. However, IDFA, Google's upcoming privacy changes, and a crackdown on fingerprinting are expected to have an impact on UA in 2023, making it more difficult to target spending 'whales' and thus more difficult to monetize through in-app purchases.
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4. Tik Tok and BeReal your way into 2023
Despite the challenges that social networking sites are facing, Short Video apps are expected to drive ad spending.
For years, marketers have been told that "video will become the number one content format brands must leverage." This will still be the case in 2023, but fortunately for brands, audiences will want more of the scrappy, unpolished clips. Instead of high-budget celebrity campaigns, pick up a cell phone and start recording and editing in-app. Brands are not only publishing more Reels, but it is paying off. According to a recent study, Reels had nearly 40% more interactions than traditional videos.
The use of social channels and platforms is an essential and ongoing component of any company's marketing strategy. However, keep in mind that consumer activity on these platforms is extremely fluid. Marketers must be aware of this and adjust their activities accordingly. Many of the popular social media platforms from the early 2000s, such as Friendster and Bebo, no longer exist. Despite having a sizable user base at the time, users shifted to newer platforms such as Facebook, Instagram, and Snapchat in the 2010s. With the rapid rise in popularity of platforms such as Tik Tok and BeReal, this churn has certainly not slowed in recent years.
These platforms represent a new generation and way of thinking. Brands must work harder to retain customers who are increasingly demanding more from the businesses with which they interact. Consumers are increasingly looking for brands that have a purpose. Those who are concerned with more than just their bottom line and who demonstrate authenticity in their approach. In 2023 and beyond, marketers can expect to continue to use established social platforms in their campaigns while also increasing their focus on TikTok and BeReal to drive creative flex and the attention of the hard-to-reach Gen Z. One thing to keep an eye on is BeReal's next step toward maturity and the monetization model it chooses.
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5. Gamification Is More Than a Buzzword
Who doesn't like being rewarded for their efforts? Especially if it is something they already do. Walking, meditation, fitness, and water-drinking apps have seen an increase in engagement. Sweatcoin, WeWard, and CashWalk apps provide users with rewarded video ads that encourage them to walk, earn coins, and redeem them for Amazon vouchers.
We will see an increase in app gamification in 2023 and beyond. It's something we started seeing in 2022 and will continue to see in the coming year.
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