Mobile game spending continues to grow, and publishers are getting more effective at generating revenue from their games. IDC and App Annie recently published a report that breaks down the revenue trends in the mobile market, titled “Mobile App Advertising and Monetization Trends 2013-2018: Freemium and In-App Ads Expand Their Lead.”

According to Native Mobile, the report title says it all, indicating that freemium-based apps and ads featured within these apps lead to the most revenue, although it also points out how mobile app revenues have displaced other forms of monetization. This includes mobile browser and PC-based advertising, with more powerful freemium and in-app advertising leading.

“App Annie has tracked the growth of the mobile economy since its infancy, and we’re really starting to see publishers hit their stride with mobile in-app revenue growing 1.7x last year,” said Bertrand Schmitt, the CEO and co-founder of App Annie. “The continued innovation in mobile apps, monetization models and mobile advertising have driven significant growth in freemium and in-app advertising revenues. The space has matured significantly and publishers have the required ‘know-how’ to monetize off the significant app usage they’re generating.”

There were other points revealed in the report, including the following…

– Freemium app revenues grew by over 70 percent, while paid and paidmium app revenues declined by 19 percent and 24 percent, respectively

– Mobile in-app advertising is set to overtake online search advertising: Mobile in-app advertising revenue also grew by 70 percent, outpacing both mobile and PC browser-based ads.

– Geography matters and it’s not one-size-fits-all across countries: Revenue generated through app stores versus in-app ads widely varies across countries – India brings in 70 percent of its app revenues via in-app ads while Japan makes more money via app stores (81 percent). The U.S. and Japan are the largest markets for mobile app revenue.

“Both freemium and in-app advertising will continue to be great opportunities for developers to make money out of their apps,” said Karsten Weide, IDC’s Vice President of Media & Entertainment. “In the ten key markets we looked at, in-app ads will grow by a factor of 3x by 2018, and app store sales by a factor of 2x.”

Those interested in the full report can find it here, on App Annie’s blog page.