Report

State of the Market 2023: An Annual Analysis of App Market and Advertising Activities

1 March 202440 pages5,819 words

Summary

The 2023 market analysis evaluates global mobile advertising performance, concentrating on the two dominant operating systems, iOS and Android, and the leading social platforms that drive ad spend. Facebook and Instagram continue to command the largest share of the social advertising ecosystem, reinforcing their status as primary channels for marketers seeking broad reach and engagement across diverse audiences. Video advertising emerged as the pre‑eminent format throughout the year, registering a 16 % increase on iOS and a markedly higher 37 % rise on Android. This divergence underscores Android’s accelerating momentum in video consumption and ad adoption, while iOS maintains steady growth. Interactive ad formats also showed modest gains, with a 2.7 % uplift on iOS, indicating a gradual shift toward more engaging user experiences, though the expansion remains limited compared with video. Overall, the findings suggest that mobile video continues to dominate revenue generation, with Android delivering the strongest growth trajectory. The incremental rise in interactive formats points to emerging opportunities for richer creative solutions, yet video’s dominance will likely shape strategic allocations for the coming year. These trends highlight the importance of platform‑specific optimization and the need for advertisers to balance high‑impact video placements with exploratory interactive formats to maximize reach and performance across the mobile landscape.

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The global mobile landscape in 2022 was defined by a 17.5% year-on-year increase in quarterly advertisers despite a 16% decline in total creative volume. This shift indicates a transition toward more dynamic, high-frequency marketing strategies, with over 90% of advertisers launching new creatives each quarter. While North America maintained the largest advertiser base, markets in Hong Kong, Macao, and Taiwan exhibited the highest creative output per advertiser. Android remained the dominant platform for volume, often doubling the creative output of iOS, though iOS advertisers grew to represent 40% of the market by year-end. The gaming sector experienced a notable decoupling of engagement and monetization. Genres such as strategy, simulation, and casual games saw year-over-year download growth ranging from 8% to 10%, yet simultaneously faced revenue declines between 9% and 16%. To combat rising user acquisition costs and falling revenues, developers increasingly adopted "Casual + X" strategies. This trend involved integrating hyper-casual mini-games—such as "save the dog" puzzles or line-drawing mechanics—into the marketing funnels of complex RPG and strategy titles to lower costs and broaden appeal. Hybrid-casual titles also emerged as a significant force, utilizing Roguelike mechanics and high-volume video ads to bridge the gap between traditional casual play and deeper monetization. In the non-game sector, advertising activity peaked in the fourth quarter, driven largely by utility tools, shopping, and educational applications. Video content remained the primary medium, accounting for over 70% of creatives across most global regions. Major players like TikTok and Duolingo maintained market leadership through exceptionally high creative refresh rates, often exceeding 95% new content. Regionally, Southeast Asia and Turkey showed a heavy reliance on Android and localized "big hit" formulas, while the United States and Japan remained the primary drivers of global revenue. Looking forward, the industry is shifting toward story-centric strategies and user-generated content to navigate a privacy-first environment. With the implementation of SKAdNetwork 4.0 and the impending Android Privacy Sandbox, marketers are moving away from granular user-level targeting in favor of Media Mix Modeling. The prevailing conclusion is that long-term lifetime value and diversified monetization models are now essential to offset rising platform costs and tightening media budgets.

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State of the Market 2023: An Annual Analysis of App Market and Advertising Activities

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