Flurry: Mobile advertising inventory looks to surpass web advertising

by Phil Hornshaw

There are a whole lot of people using mobile apps, and a whole lot of mobile apps available. There's so many, in fact, that mobile market analyst Flurry Analytics expects that mobile advertising inventory is on pace to surpass that of online web advertising, despite the web ad business being about five times older.

A new set of data posted on Flurry’s blog finds that there are more than 600,000 apps available across various mobile platforms, mostly Google’s Android and Apple’s iOS. The average mobile device has around 65 apps downloaded to it, and the average session spent with a mobile app is around 4.2 minutes, with 4.3 ads shown to the user during each session. In short, there are a whole lot of potential eyeballs on ads when it comes to mobile apps. That average traffic is known as ad inventory.

Flurry took those numbers and tried to extrapolate to the total number of app sessions going on in a given amount of time. The Flurry network tracks something like 100,000 Android and iOS apps for these kinds of studies, and has access to about 20 percent of all mobile app sessions going on, so it expanded its numbers accordingly to get an estimate for the entire app market.

The findings are pretty interesting. Flurry assumes that advertisers have to pay about $2.50 per ad impression on a mobile app, which it considers conservative. Compare that with your average ad impression on Hulu, which costs between $15 and $20.

Flurry finds that mobile advertising is exploding, with a whole lot of money to be made. The firm expects mobile advertising to surpass the much older and more mature web advertising market by January 2012 and to basically skyrocket after that. For some context, while mobile app users average about four minutes with an app, users spend less than a minute on average on any given website.

By the end of 2012, Flurry expects the mobile advertising market to be worth about $4.5 billion. That’s halfway to the $8 billion that Media Daily News predicted it would take five years to achieve.

The findings also state that more than 1 million smartphones are being activated daily around the world, and that the households of smartphone owners tend to make more money than their non-smartphone-owning counterparts – $66,000 per year versus $44,000 per year. Here’s a quote from the blog:

In 1994, Hotwired.com was the first company to start selling display advertising in large quantities on the Internet. Back then, it took over six years for advertisers to embrace this model.  For mobile apps, less than four years into their growth cycle, a critical mass of highly attractive consumers has been achieved. With growing awareness by brands and advertising agencies, we now expect digital advertising on mobile to take off in earnest.

You know what that means: probably more growth in the app market as more developers try to make some money by creating the next Angry Birds, both through downloads, and now, advertising. That’s good news all around.