Key Speaker: Ms. Cathy Boyle (Principal Analyst- Mobile, E-marketer)

Relevant studies have pointed out that while number of mobile apps is increasing at a fast pace, the pace of downloads is barely moving. Also majority of people are interested in only a handful of apps. This is leading to some serious questions on utility of app based marketing. This write-up summarizes the important points discussed during the webinar about customer acquisition and retention by mobile apps.

Existing Trends

At present, it is understood that majority of smartphone users in the USA are app downloaders as well. This is borne out by the fact that the common figure stands at 93.7% for smartphone users and 93.5% for users of tablets. This is the opportune point of the year to debate on such matters as marketing research borne out by Apps-Flyer has clearly demonstrated that app downloads increase exponentially in the last quarter of the calendar year. I Phone apps see a 175% increase in October as opposed to September while Android apps similarly experience an increase of 144% during the same period. Shopping apps are particularly geared up towards leveraging the period around Thanksgiving, Black Friday and Cyber Monday. Gaming apps on the other hand experience hike in downloads due to Halloween, Thanksgiving and Christmas.

Major Dichotomy

One the one hand, the number of apps getting developed is increasing, download trend is barely moving. The figures stand and 33% for the App store on mobile phones and 16% for tablets but only 8% an increase in terms of downloads. Very few apps are in fact being downloaded by majority of the people. It has been observed that there are fourteen apps in total which are most keenly downloaded by users, whether I-Phone or Android. In fact, business consulting firm Localytics has confirmed that about a fourth of total users globally give up on apps after using them just once. The audience in the US is similar with about a fifth discarding any app after using just twice. The most generous users at a minimum of three uses, stands at a little over half the total. The biggest challenge as observed is that while an app maybe attractive enough for a one time download, it needs a lot more to keep the users engaged.

Further research suggests that about another fourth of the users did not return back to the app post download within a period of 24 hours. Very few return after thirty days or about a normal month.

User Acquisition Methods

Majority of companies have realized that instead of running after customers, it is a better strategy to retain the useful ones. Useful include the ones who provide genuine quality to the brand. The realization has been that organic app-store search and word-of-mouth are the top trends through which customers have been acquired. Being featured on top by the app store creates a strong desire to download among smartphone users. A fifth even confirmed that they downloaded an app as the corresponding advertisement was attractive.

App-Marketing

Marketers are increasingly looking at apps as means to do digital marketing. In fact worldwide the figure for ad spend on app-marketing has now gone up to US$ 5.7 billion. This is an extremely large figure, whichever way it is perceived. This is primarily due to increased competition in this field. More than half the budget for app-based marketing is in video and social ads. Social media is proving to be a great leveler. As the scope of this segment has gone up, so app specific ad formats have been developed. Better targeting capabilities have now been developed. This has been possible due to the massive amounts of data available which get processed using business analytics tools. Eventually this helps in segmenting the market so that targeted ads can be sent using customized content.

App Ratings

E-marketer has over a study asked customers to rate apps. Social apps are the best rated on average at. Within this as expected, Facebook has the best average measurement. Even Twitter’s particular Audience Network capability has proven to be a popular hook with users. Video on average got B rating. This is because while videos are catchy and engage audiences, many of them provide frivolous content. Video is at the stage where it will soon be much bigger, but as of now occupies that level below A. Search engines also got B ratings on average. Many marketers are considering paid ads on search browsers. This provides higher quality of web visitors. However, apps need to well integrated with mobile sites to make sure this gets executed. App ads on app stores have got an average score of C. This is due to the relatively low scale of this stream. A major benefit of this otherwise unheralded method is the specific targeting as the ads are highly relevant to the context.

Among media sources, Facebook once again scored the top rating. This was true across Android as well as IOS. Google AdWords on both counts finished second. Business analysis provided by Ad-Search also informs us that app marketers do not exclusively rely on apps alone but also venture into other marketing streams such as television and print media. The figure stood at 25% for television and 9% for print media. Television marketing was rated a lowly C on average as it was realized that this medium only suited well funded app developers or marketers. Radio ads were deemed most ineffective and scored the average D. Only during peak shopping season did this method have some form of success. Print ads similarly weighed in at D. It has been understood that print ads only make sense if the cost involved is negligible.

Related Marketing Streams

Certain strategies are adopted by marketers which complement app-based marketing. They are primarily email marketing, content marketing and influencer marketing. A fifth of marketers use email marketing, content marketing is used up by 29% and 42% use influencer marketing. Influencers includes individuals with a substantial following on social media or YouTube. Connection with influencers is usually routed via third parties. Once this source was tapped fully, marketers moved on to celebrities. Each of these marketing streams improve performance levels of one another.

Marketing Metrics

Measurement of marketing success or not has evolved over the years. Install and click through rates are no longer seen as paramount importance. Instead marketers are looking to attract and then further leverage quality users. In fact researchers are questioning whether the concept of installations itself is redundant. That is why Google as introduced Android Instant Apps so that apps may be test-driven before being installed. This avoids the organizations the false sense of success with apps being installed when they are rarely used. Only genuinely interested users will download post the test- drive. The metrics to measure now are- retention, Lifetime Value (LV) and Return on Ad Spend (ROAS). Such metrics present more holistic success pointers.

It has also been found out that attracting quality customers is more expensive than the mass numbers. This is because more precise business intelligence is required to capture the top end of users who have specific tastes or preferences. There is also greater competition for that most valuable group of users. The ad spend per unit also rises due to the greater sensitivity of the data.

Thus we see that marketing has changed in every way and the same applies to apps. Marketers have moved away from the mass numbers to quality, retainable users.

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