Mobile in-app advertising revenue will overtake PC and mobile web-based advertising by 2018, according to a report from App Annie and IDC.
The category is set to expand by over 3 times between 2014 and 2018, while PC web advertising, the next largest category, will remain largely static.
The report also found that revenues from freemium models and in-app advertising had shown the largest growth in the last year, of 72 and 71 percent respectively, and now accounted for the majority of revenues.
However, the research added that currently less than 15 percent of publishers surveyed make $10K per month or more from in-app advertising.
Of all the markets surveyed, UK app publishers derived the second highest proportion of their revenues from in-app advertising at 67 percent. This was ahead of the US at 63 percent, Germany at 32 percent and Japan at 19 percent.
70 percent of respondents revealed that they wanted their company app to drive revenue through the app store, compared to around 50 percent who aimed to do so through in-app advertising.
In addition, the survey found that the most popular option for monetising freemium apps was selling functionality such as content and virtual items, with almost 60 percent naming this as a source of revenue. This was followed by user experience at just over 40 percent, with users for example paying to remove ads.
App publishers were also found to be increasingly willing to display paid advertising within the app, with 49 percent now doing so compared to 42 percent the previous year.
"The emergence of wearables and Internet of Things provide even more upside in the opportunity for app revenue; this coupled with new applications across mobile will drive revenues even higher," commented the report.
"Publishers should consider different business model strategies depending on the geographic region."
The report was based on surveys in March 2015 of 11293 respondents.
