Enabled by faster mobile internet connections, a richer mobility experience is available -- with the possibility to leverage a cloud-based applications (apps) back-end.
According to the latest market study by Juniper Research, they now forecast that the mobile context and location services market will reach $43.3 billion in revenue by 2019 -- that's rising from an estimated $12.2 billion in revenue during 2014.
Their study highlighted that over two-thirds of revenues will be driven through highly targeted and contextually aware ad-supported apps by the end of the forecast period.
Online Digital Marketing Leads the Way
According to the Juniper study findings, social apps are forecast to be the primary driver behind app ad-supported revenues. Apps such as Facebook enable marketers to focus on specific audience segments using location and other user-generated contexts.
Local search apps will follow in terms of ad-spend, and although these will not generate the equivalent of mobile web search, Google opening its deep linking API (application programming interface) to developers will undoubtedly close that gap.
Why Smartphone Users Prefer In-App Purchases
Additionally, the Juniper market analysis found that the IAP (in-app purchase) model will grow on average over three times as rapidly per annum as the classic pay-to-download model.
IAP will be particularly prevalent in Navigation, Social and Tracking apps, with consumers preferring the low- to zero-entry cost and developers leveraging lifetime value rather than one-off sales.
"Even in the case of navigation apps where paid-for apps have remained popular, large brands such as Garmin are beginning to emphasize this revenue model," said Steffen Sorrell, research analyst at Juniper Research.
Other key findings from the study include:
- Mobile ad presentation and delivery must still mature before the success of other media forms can be replicated, with a failure to connect at the correct emotional level with the consumer cited as a limiting factor.
- The manner by which mobile apps are accessed is set to be transformed due to the rise of persistent search, deep linking and the birth of mobile ambient intelligence.