1 Comment

Summary:

Mobile virtual goods accounted for 80 percent of revenue from iOS apps in September, far outpacing advertising, according to new data from analytics firm Flurry. January was the last month advertising revenue was greater than revenue from virtual goods.

Farm_Iphone_02

Mobile virtual goods accounted for 80 percent of revenue from iOS apps in September, far outpacing advertising, according to new data from analytics firm Flurry.

January 2010 was the last month that advertising revenue was greater than virtual goods. Since then, it’s been nothing but micro-transactions of toys, coins, weapons and levels. Flurry conducted the research using data from social networks and social gaming applications with a combined reach of 2.2 million daily active users. The study didn’t look at Android because the platform doesn’t currently support in-app purchases.

This shouldn’t be a complete surprise. Virtual goods are a major source of revenue these days that’s expected to jump to $2.1 billion next year from $1.6 billion this year, up 31 percent, according to a report from Inside Network.

The report says a lot about the growth of virtual goods, and underscores the point that mobile social gaming, like social gaming on Facebook, is set to be very lucrative. It helps put DeNA’s purchase earlier this week of Ngmoco into better perspective. Ngmoco said earlier this year it makes 40 percent of its revenue from virtual goods purchased in-game.

It also suggests there’s a lot of missed opportunity in mobile advertising. Programs like iAd and Google’s Admob hold the promise of generating more revenue for app makers. And Android ads seem to get significantly more clicks, according to one research study.

The latest figures suggest that advertising agencies are still not quite sold on the overall viability of mobile ads, said Peter Farago, VP of Flurry. He believes as mobile social gaming gains even more momentum, advertisers will grow more enamored with mobile advertising. As a result, ad revenues will start to catch up to virtual goods again over the next couple years, he said.

Related research from GigaOM Pro (subscription req’d):

  1. [...] analytics firm Flurry reported a few months ago that virtual goods sales have grown to 4 times that of mobile ad spending on iOS. At the time, Peter Farago, VP of Flurry predicted that ad spending would eventually catch up to [...]

    Share

Comments have been disabled for this post