More apps mean more competition for users. This dynamic is driving user acquisition costs into the stratosphere. Companies have a choice: They can pay higher prices to acquire app users, or they can invest more effort in retaining high-value customers. Reams of recent research reveal a seismic shift to the latter as more app marketers sharpen their focus on approaches that emphasize “quality over quantity.”
It’s all about keeping users loyal. App marketers are beginning to understand that the customer-centric rules of online, digital and physical marketing also apply in the App Economy. For example, online a single-digit increase in retention can mean a double- or even triple-digit increase in profits. When it comes to marketing and monetizing apps, the advantages of identifying and inspiring quality users can be just as massive.
AppsFlyer is a platform for mobile attribution and marketing analytics whose tracking technology is found on 98% of the world’s mobile devices. The company regularly undertakes research to analyze best practices and trends. The State Of App Engagement, AppsFlyer’s most comprehensive and ambitious report to date, draws on billions of data points across the second half of 2016 to help app marketers identify quality users who will engage with their app over time.
The report offers marketers a breakdown of key engagement benchmarks by platform, category and region:
- Retention rates
- Average sessions per daily active user
- Cross-funnel conversion rates
- Lifetime engagement
The report focuses on Shopping, Games and Travel apps. However, the overarching observations and trends offer valuable guidance to all app marketers as they seek to optimize their campaigns and target audiences highly likely to engage with their apps over time.
The research confirms that app retention is an elusive goal to reach (findings show only 10-12% of users remain active 7 days after downloading an app, and only 4-5% are still active after 30 days). Yet it also points to positive results that show marketers using data to drive results. Based on a year-over-year comparison the report shows how overall retention has improved in some regions and across some app categories. “The good news for marketers is that retention has mostly improved – especially among non-organic users on both platforms,” observes report author Shani Rosenfelder.
Organic traffic – that is, people who download your app without you having to invest in paid or social promotion to get their attention – is great to have but not the way to drive serious growth. In a marketplace brimming with apps, and where app store search is fatally flawed, marketers can’t rely on WOM to take their app from good to great. For that they need to target non-organic traffic. To do so, they must harness data that will allow them to target audiences that promise high engagement and low wastage of their ad spend.
Among the findings:
Small gap, big opportunities: Average sessions, the number of times a daily active user will engage with your app, used to be vastly different between organic and non-organic users. However, the gap between these two groups of users across platforms is closing fast. Globally, Android organic users come in at 3.81 sessions compared with 3.56 sessions for non-organic users on the platform. That’s a mere 7% difference. On iOS, the gap is slightly wider with organic users outperforming non-organic users by 9%. The report reads this to mean there is “substantial quality to be found among non-organic users.”
Retention rates rocket: When it comes to retention North America has the best Android score across all regions. For organic users the breakdown is 35.8% for Day 1 Retention and 4.1% for Day 30 Retention. Retention rates among non-organic users on Android is 27.3% for Day 1 and 3.5% for Day 30. On iOS retention rates for organic users comes in at 30.6% for Day 1 (26.3% for non-organic users) and 5.1% for Day 30 (3.1% for non-organic users). The report also lists the cities across the U.S. where marketers are highly likely to find high-quality users for their app.
Engagement is encouraging: Overall, organic users of Shopping apps on Android engage in 41.94 content views (for the period studied). Non-organic users engaged in 26.14 content views. (In the case of iOS the content views are 29.46 for organics and 12.14 for non-organics.) Draw a completely plausible parallel between Content Views for shoppers and “News Views” for consumers, and the report gives app marketers at content and media companies good reason to be positive about the results they can achieve. One audience looks at products, the other looks at articles. In both cases, more views mean more chances to engage and retain (or monetize) your audience.
User acquisition campaigns that focus on driving installs are passé. The next wave of activity and excitement is all about finding ways to identify audiences that will interact with your app repeatedly. Marketers need to approach this challenge armed with the critical data they need to optimize their investments. It is essential to understand the key characteristics that separate loyal and quality users from everyone else and target non-organic users who measure up to their organic traffic.
Peggy Anne Salz is the Content Marketing Strategist and Chief Analyst of Mobile Groove, a top 50 influential technology site providing custom research to the global mobile industry and consulting to tech startups. She is a frequent contributor to Forbes on the topic of mobile marketing, engagement and apps. Her work also regularly appears in a range of publications from Venture Beat to Harvard Business Review. Peggy is a top 30 Mobile Marketing influencer and a nine-time author based in Europe. Follow her @peggyanne.