Study: App marketing drives 80% jump in sales since 2016
- Revenue from app marketing has jumped 80% since 2016, but developers face greater challenges in boosting user loyalty, retention and profitability, according to a report that measurement platform AppsFlyer shared with Mobile Marketer. Apps need to overcome monetization challenges by maximizing revenue from purchases, subscriptions, in-app purchases (IAP) and in-app advertising (IAA).
- For shopping apps, the average iOS user spends 70% more than an Android user even as the rate of buyers for the platforms is about the same. Organic users of shopping apps, who install an app without directly responding to a mobile advertising campaign, demonstrate their loyalty by spending an average of $21 during a 90-day period, or triple the $7.1 spending by non-organic app users.
- The United Kingdom has the best metrics of any country for in-app shopping with 90-day average revenue per user of $9.50, compared with $9.23 for the United States. The U.K. also has the highest share of paying users and the biggest number of consumers making more than three purchases in 90 days.
As consumers become more dependent on apps to shop, plan and play, AppsFlyer's research highlights the challenges for app developers in a variety of categories, particularly gaming, shopping and travel. Each category has its own dynamics, with gaming apps particularly dependent on in-app purchases and advertising for revenue. Less than 4% of gamers make in-app purchases, but they are a key target for gaming app marketers, which is why Facebook and Google has both touted new ad opportunities in mobile games on their platforms. The report noted that gaming, like travel, also needs to take better advantage of data to decrease the gap between organic and nonorganic performance.
For shopping apps, iOS users are higher-value customers but that doesn't mean marketers should completely ignore Android users given the massive scale of the platform. Android users are active shoppers as their share of paying consumers indicates, almost the same as iOS at 9.6%. Marketers can increase the lifetime value from this platform by targeting high-end Android devices, per AppsFlyer. However, mobile shopping growth has stalled as technology has lagged.
A key step in promoting customer loyalty with shopping apps is urging mobile users to make their first purchase, AppsFlyer recommends. About one in two paying consumers become multi-purchase shoppers, which means that focusing on generating the first conversion with a significant discount offer on the first purchase can propel active consumer shopping over time.
Even though each category struggles in different areas, the report showed that all of them can generate more consistent revenue by creating reengagement campaigns, targeting consumers a week after their initial interaction.