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App Store, Google Play Spending Topped $50B in the First Half of 2020

An increase in app use this year drove a surge in mobile ad placements, even as the ad sector declined as a whole.
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Perhaps unsurprisingly, people are spending far more time in apps these days.

Between Google Play  (GOOGL) - Get Alphabet Inc. Class A Report and Apple's  (AAPL) - Get Apple Inc. Report App Store, consumer spending on apps reached $50 billion in the first half of 2020, according to a new report from mobile analytics provider App Annie. And as the COVID-19 pandemic hit, consumers spent a staggering number of hours in apps -- amounting to 27% of their waking hours during April, and 1.6 trillion hours cumulatively in the first half of the year. 

Apps spanning entertainment, finance and payments, work productivity and ecommerce all notched unprecedented growth in the first half of this year, with PayPal's  (PYPL) - Get PayPal Holdings, Inc. Report Venmo, DoorDash, Zoom  (ZM) - Get Zoom Video Communications, Inc. Class A Report, Netflix  (NFLX) - Get Netflix, Inc. Report and TikTok each showing notable increases in usage compared to the same period last year. 

Mobile shopping surpassed holiday levels in the first half of this year, amounting to ecommerce growth that would have otherwise taken years.

"E-commerce boomed in H1 2020, achieving growth that normally would have taken between 4 and 6 years — and mobile was central to this growth," said Lexi Sydow, market insights manager at App Annie. 

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Together, the growth in app downloads, spending and engagement drove a major boom in mobile ad spending, even as marketing budgets shrunk on the whole. 

A major ad network saw its volume of U.S. iPhone ad placements grow by 70% between January and June 2020, with interstitial ads as the biggest driver. Interstitial ads grew by 205% during the January to June period, and represented 54% of all ad formats at the close of that period, according to App Annie. 

The mobile ad growth bucks an overall historically bad year for advertising, as the COVID-19 pandemic closes businesses and hampers marketing spend. 

According to eMarketer, worldwide digital ad spending is on pace to grow by just 2.4% in 2020, the lowest rate of growth on record. Overall ad spending worldwide is projected to decline by 4.9%.