Applications are essential in today’s mobile market and partly because of that ad-supported software will have the potential for creating developer wealth according to data released today from mobile analytics firm Zokem. The study notes that Android (s goog) smartphone users spend an average of 42 minutes per day with third-party mobile apps, which is far greater than owners of Windows Mobile (s msft), BlackBerry (s rimm) and Symbian handsets spend in add-on software. Zokem also reports Android users spending 31 percent of their daily smartphone face time within non-core operating system apps, providing opportunity for more ad impressions in smartphone apps.
Zokem’s research findings are derived from a wide sample across two-dozen countries, but notably absent are numbers about Apple iPhone (s aapl) users. It’s a safe bet, however, to expect iOS device owners use third-party apps at least as much as Android owners, if not more, based on the total apps installed. Recent studies show that the average iPhone owner, for example, installs 40 apps. Android owners, by comparison install roughly 25 apps, while BlackBerry users lag with 14 third-party apps on their smartphones. RIM is trying to boost that number with an web-based app store for smartphone apps, which will make it easier for consumers to find and install software on their BlackBerry device.
Clearly, Apple’s iTunes App Store is proof that developers can reap financial rewards in a paid smartphone software model. A few months, ago Apple reported that it had paid out a cumulative $1 billion to developers. Although the focus of such news was on developer benefits, don’t lose sight of the fact that Apple earned several hundred million dollars for its share of paid apps sold through the iTunes ecosystem.
But Apple has seen Google earn billions through targeted ads, so there’s proof enough that ad-supported apps can become a secondary revenue stream. And with $3.8 billion expected to be spent on mobile ads this year, it’s a difficult opportunity to ignore. As a result, Apple purchased mobile add firm Quattro in January, which it later parlayed into the iAds platform for iOS apps. Research In Motion, too, is going down the mobile ad network path with the BlackBerry Advertising Service announced last month. And both appear to be following Nokia’s (s nok) lead: the company purchased Enpocket for mobile ad expertise in 2007 and launched its own mobile ad network in February of 2008.
What do all of these ad networks add up to in light of the recent Zokem study? Increased potential for mobile ad revenues to supplement paid app sales, both for developers and the companies that provide smartphone platforms. Simply put: longer user engagement in apps with ads leads to more impressions and greater brand awareness for advertisers.
Click-through rates on ads aren’t a constant, but one way to gain advertising revenue is to increase the ad impressions. Advertisers can purchase more ad spots or a higher number of impressions, but consumers on Android devices are doing their part: by spending more time in third-party apps, smartphone owners are providing more opportunities for ad interaction. It doesn’t hurt that Android owners are click-happy either: ad network Chitika claims Android owners are 80 percent more valuable than iOS owners for now.
Note that data suggesting that consumers are using smartphones more for applications isn’t exactly new. Indeed, Zokem reported last month that smartphone users are no longer relying on their device’s browser as heavily as they used to: third-party apps are commanding 87 percent of user’s attention as compared to just 13 percent of time spent in a browser. That’s affecting the data used by devices too: mobile broadband data is no longer used more by the browser; it is now split evenly between third-party apps the browser, which could add developer constraints in a future with tiered data plans, as I noted in a GigaOM Pro report earlier this month (subscription required).
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