SensorTowerQ1 2025 Digital Market Index: The Digital Economy Starts 2025 with Strong Growth Across Advertising and Mobile
Summary
Sensor Tower's Q1 2025 report highlights strong momentum in mobile and digital advertising. Global mobile IAP revenue surpassed $40B for the first time (+11% YoY), driven by non-game apps (+24% YoY) which are on track to overtake gaming revenue. Generative AI apps like ChatGPT (#6 IAP, $330M) and short drama apps (e.g., DramaBox, ReelShort) are key growth drivers.
US digital ad spend grew 12% YoY to $31B with 3.9T impressions. Video ads outperformed other formats, with 18% growth vs. 6% decline.
European markets (France, Italy, Spain, UK) saw strong ad spend growth (15-17% YoY), while APAC markets like Japan and South Korea also grew. Retail media ad impressions in the US climbed 31% YoY to 56B. For ad ops decision-makers, actionable takeaways include: (1) shift budget toward video and OTT channels, (2) invest in AI-related app advertising for high engagement, (3) explore short drama apps as emerging inventory, (4) target high-growth European and APAC markets, and (5) leverage retail media for incremental reach.
The report also notes new ad channels (TikTok, YouTube in South Korea; LINE in Japan) becoming available, offering early-mover advantages.
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