Why App Install Ads Are Flooding Your Phone: It's a $3 Billion Business

When you’re scrolling through apps and websites on a mobile browser, chances are you’re seeing a lot more video, pop-up and banner ads prompting you to install an app. That’s no accident, according to the latest data from eMarketer published on Tuesday.

U.S. spending on promotions for mobile app installs made up $1.67 billion in digital ad dollars in 2014, according to the market research firm. And it is expected to grow 80 percent to a $3 billion business in 2015, accounting for over 10 percent of mobile ad spending. Overall the attention to mobile has continued to increase, taking away digital ad dollars from the desktop. In 2014, total mobile ad spending in the U.S. was $19.2 billion and is expected to increase 50 percent to $28.7 billion this year.

While desktop spending is expected to maintain a slight lead in 2015 and remain flat at about $25 billion in the coming years, mobile ad spending is predicted to hit $40.5 in 2016.

Catching the attention of advertisers is consumer obsession with apps. Over half of U.S. digital media consumption is now spent on mobile apps, with desktop accounting for only 40 percent, according to a comScore study from 2014. In that same year, U.S. adults spent an average of two hours and 51 minutes on a mobile device daily, according to eMarketer.

It’s a trend that has benefited Facebook and other companies that have a dedicated app user base. But it also has hurt traditional digital ad companies such as Google -- whose ad business is largely based in browser and search advertising. That relationship is not expected to change much in the coming years. Mobile ad spending also is expected to skew higher toward in-app ads vs. mobile Web spending, accounting for $20.8 billion and $7.9 billion, respectively.