Source: Fool Editorial.
The typical smartphone user spends about 37 hours in apps every single month (yikes!), but recently Forrester Research dug a little deeper to find out exactly which apps we use most. The research group surveyed 2,000 U.S. smartphone users at the end of 2014 and found that 12% of their time was spent in Google (GOOG 2.27%) (GOOGL 2.01%) apps and 13% in Facebook (FB 2.11%) apps -- far outpacing any other company's programs.
The research firm also noted that those percentages only account for apps that users have specifically downloaded, so if your phone came preloaded with YouTube, Google Maps, etc., then Google's percentages are technically higher.
While it's unsurprising that these two companies dominate our time spent in apps, the importance of all that usage on their businesses can't be understated.
Turning app usage into ad dollars
Both Google and Facebook make the majority of their revenue by showing ads to users, which is a very lucrative business. eMarketer forecast that this year advertisers will spend $20.79 billion in mobile apps, compared to just $7.93 billion for mobile Web browser ads.
According to Forrester, Google still has a clear leadership position in the space because its Android platform is so pervasive, but it noted that Facebook might have a growing advantage.
"Though nascent as a platform, Facebook owns a large global audience and has a clear sense of purpose, centered on consumers' inherent desire and need to communicate and a solid plan for how to enhance that experience by integrating services in context," the report said.
That is already paying off for Facebook. In the first quarter of this year, the company increased revenue by 42% year over year (though Wall Street wanted more), from $2.5 billion to $3.54 billion. On top of that, Facebook increased its mobile daily active users by 31% and monthly active users by 24%.
But there's also a few ways Facebook could improve. Forrester suggested Facebook has had its share of failed app attempts, including Poke and Paper, and that the company must grow its user base, particularly in China. The research firm said it believes Facebook needs to better monetize WhatsApp, bring in more revenue from its Oculus purchase, and expand its revenue streams outside of advertising.
No one's in trouble here
A few months ago I wrote that Google wants users to spend more time on the Web and less time in apps, in part because the company's share of the mobile ad market has fallen from 50% in 2013 to about 46.8% right now. And while that might be true, I should have been more specific about Google's growing advantage with its apps. As long as the company can get people to use its smartphone applications, it will find ways to monetize them.
So no matter which company comes out ahead in mobile app usage, both companies are successfully getting the attention of smartphone users and effectively serving up mobile ads. I wouldn't bet against either company's ability to continue dominating this space.
