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Analysis: Mobile Games Draw Less Ad Revenue Per User Than Other Apps
Analysis: Mobile Games Draw Less Ad Revenue Per User Than Other Apps
February 14, 2011 | By Kyle Orland

February 14, 2011 | By Kyle Orland
More: Console/PC

An analysis of popular smartphone apps shows that games bring in less revenue per user than utility and entertainment apps, with iPhone revenues outpacing Android revenues in all categories.

A study by mobile ad exchange Mobclix looked at free apps with over 500,000 downloads and 75,000 active users, defined as people using the app for at least five minutes three times a week. These popular apps averaged two weeks in the top ten list of their respective app store categories.

In the gaming category, the 50 apps studied generated an average of $4 per user on iOS, but only $1.90 on the Android platform, suggesting advertisers may be placing a premium on users of Apple devices.

On both platforms, however, games generated less revenue per active user than apps in the utilities and entertainment categories. Regularly used iPhone utilities, for instance, generated an average of $9.50 in monthly advertising revenue per user, and even Android entertainment apps averaged $4.90 per user.

Mobclix's data doesn't take into account specific usage time or ad impression data for the included apps, so its unclear whether these differences represent different ad rates or simply varied usage patterns among app types and platforms.

The study also doesn't take into account revenue from virtual goods, which an October study from analysis firm Flurry suggests are becoming an overwhelmingly important part of mobile game revenues.

Last month, Juniper Research predicted current mobile game ad spending would increase tenfold by 2015, to an annual mark of $894 million across the industry.

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Mike Lopez
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I wonder if the revenue per user is a function of how long/frequent ads are displayed (which makes sense to me). If that was the case I can see games generating less since the main live gameplay loop would never have ads displayed and that would reduce the frequency and length of ads. Utilities on the other hand can almost always have ads displayed.