In yesterday’s mobile marketing survey post, we discussed how apps make and spend money. Today our focus is on users and how mobile app marketers are spending more time and resources on ensuring they attract and cultivate relationships with high-value users.
A few years ago, the three-word phrase that best encapsulated mobile app marketing objectives was “Installs! Installs! Installs!” For a variety of reasons, most app publishers were concerned primarily with driving enormous install counts, especially at launch. Many felt that this hype-driven marketing approach was appropriate because high install counts drove app store rankings, and the concomitant publicity, in turn, drove more awareness and trial. Apps grew like snowballs.
But these days, many app marketers take a very different view on what is important. Here are a few reasons why:
- Competition in the app stores is incredibly intense. A new app competes with more than 2 million other apps in both of the major app stores. Only a tiny few apps will make it to a top 10 list. Given this, many brands hedge their bets by planning for longer periods of less intense marketing support.
- App store ranking has evolved so that high trial rates do not necessarily lead to high rankings. App quality, as evidenced by long-term usage, is increasingly important.
- While games used to dominate the app space absolutely, new classes of apps now comprise a large portion of the market. Non-gaming apps are unlikely ever to make an app store top 20 list – they’re about ongoing customer relationships rather than hype-able entertainment.
- Unlike games, other classes of apps are usually designed to build profitable long-term customer relationships. Their intended shelf life is far longer than a month or two.
In short, not all installs are the same. User quality – as demonstrated by ONGOING use and in-app purchases – is what counts to most marketers. In the mobile marketing survey, 84% of our marketers report that their KPIs are primarily focused on revenue rather than install counts.
78% of marketers who responded to the mobile marketing survey also explicitly told us that they and their teams are much more focused on user quality than in the past.
Mobile marketers evaluate user quality quantitatively, using a variety of key metrics that provide an indication of user “commitment” to an app. One of the most popular metrics for this app marketing analysis is retention rate, which is a measure of the number of people who relaunch an app during a particular period. 84% of our marketers reported that they consider retention rate to optimize their spend toward acquiring and retaining high-quality users.
And while uninstall measurement is very new – introduced just this year for the first time by Apsalar, already a majority of mobile marketing survey respondents say they use uninstall rates as part of their user quality assessment processes.
There’s also lots of evidence that marketers are putting their money into cultivating user quality as well. To a great extent, user quality is a product of both nature and nurture. For the nurturing bit, marketers are getting excited about both CRM and proactive remarketing.
Remarketing is the fastest growing arena of app marketing. For a very good set of reasons. Not least, the majority of apps lose most of their users before the marketers have a chance to monetize them.
Consider the following widely reported industry stats:
- 22% of paid installs for enterprise apps are uninstalled within the first four weeks
- 34% of apps are used two times or less
- 95% of users stop using an app within 60 days of installing it
With numbers like those, it makes sense to focus on trying to strengthen the engagement and usage of apps proactively. Tactics like push notifications work, among those people that opt-in to receive them. But remarketing provides a way to engage all of your users and encourage them to do things like:
- Return to an app in the critical first hours and days of an install
- Persuade uninstallers to give an app another try
- Convince them to take actions that deepen their engagement, like encouraging cart abandoners to return to complete a transaction.
- Convince buyers to make incremental purchases and increase their ARPU and LTV
Our marketers say that they are heeding this siren call. Almost 60% say they are fielding some remarketing today. And another 28% say they will in the next 12 months.
While the amount of money invested in remarketing is modest so far, it is widely expected to increase in the coming months.
Tomorrow: App Marketing Media Trends
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