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Digital Content and Advertising Key Revenue Generators for Messaging Apps

2018 is expected to be another landmark year for mobile messaging apps

November 19, 2015 | Mobile

More than 1.4 billion consumers worldwide are expected to use a mobile messaging app this year. In 2018, that number will reach 2 billion, according to estimates from eMarketer’s first global report on the apps’ reach. Double-digit growth in the number of mobile messaging users is projected through 2018, as more consumers gain mobile internet access worldwide and flock to messaging apps as cheaper alternatives to SMS, MMS and voice calls.

Mobile Phone Messaging App Users and Penetration Worldwide, 2014-2019 (billions, % change and % of mobile phone internet users)

As outlined in a new eMarketer report, “Mobile Messaging Apps: Global User Forecast, Leaderboard and Outlook on Monetization,” by the end of 2015, 75% of smartphone users worldwide will use an over-the-top (OTT) mobile messaging app at least once a month. Such a large share is not surprising, considering smartphones are communication devices at their core and "messaging" has consistently been among the most popular mobile activities, albeit one traditionally done via SMS/MMS. For reasons ranging from cost savings to creative expression, OTT messaging apps have grown incredibly popular with mobile users the world over.

With the popularity of mobile messaging apps continuing to grow, the volume of instant messages (IMs) sent annually is expected to eclipse other forms of digital messages. According to a July 2015 press release from Juniper Research, more than 94 trillion digital messages will be sent worldwide this year, a total that includes email, IM, MMS, SMS and social media. Email is expected to generate the largest share of messages, but Juniper contends that the scales will tip in favor of IM next year. The research firm projects the volume of IM will exceed email for the first time by mid-2016 and generate the largest share of digital messages sent annually.

Revenue and Usage Metrics for Select Mobile Messaging Apps Worldwide, 2015 & 2020

Looking ahead, 2018 is expected to be another landmark year for mobile app messaging. At that point, eMarketer projects the number of chat app users will reach 2 billion and represent more than 80% of smartphone users worldwide.

It’s premature to rank the leading messaging apps by revenue, as the apps vary widely in their stage of development—some have not even attempted to monetize their audience yet—and their philosophies on monetization differ. WeChat and Line are often held up as role models for successfully tapping into a combination of these sources to generate revenue. Digital content sales—the sale of games and emoji/sticker packs in particular—have been important drivers of revenue for both companies. Stickers alone provide two streams of revenue: one through the retail sale of sticker packs sold by the app itself, and the other from “branded stickers,” a form of brand-sponsored content.

Indeed, digital content and advertising are key revenue generators for messaging apps. But WeChat’s ability to become a shopping hub has some believing that commerce and fees for other services will be more lucrative.

eMarketer corporate subscription clients can view the full report here.

Get more on this topic with the full eMarketer report, “Mobile Messaging Apps: Global User Forecast, Leaderboard and Outlook on Monetization.”

eMarketer releases over 200 analyst reports per year, which are only available to eMarketer corporate subscribers.

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