App Install Advertising: Key Challenges, Trends and Effectiveness Ratings - eMarketer
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eMarketer Report

App Install Advertising: Key Challenges, Trends and Effectiveness Ratings

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Executive Summary

The number of US app users continues to rise and so too does the amount of time consumers spend using mobile apps each day. The trouble for app developers is mobile users have millions of apps to choose from and are tough critics of those they’ve chosen, installing apps without hesitation but ditching them quickly when not satisfied. To succeed in this challenging environment, advertisers’ goals have shifted from acquiring the largest quantity of new users to acquiring a steady volume of quality users.

  • Mobile app install advertisers face significant challenges: They have more than 2 million apps to compete with in each of the leading app stores, user retention rates are dropping, smartphone and tablet owners use just a handful of apps each day, and the number of mobile users worldwide is not growing as quickly as the pool of available apps.
  • To succeed under these conditions, app advertisers have largely changed their strategy. Instead of advertising to acquire the largest volume of new users and worrying about retention later, acquisition campaigns are structured with retention in mind. This requires a keen understanding of the lifetime value of their best users, precision targeting, and measurement methods that weigh the value of the users acquired against the acquisition costs.
  • Social media, search and video ads served to mobile devices receive top scores from app advertisers and measurement firms for their ability to attract a steady volume of quality users. Television, radio and print ads have proven to be less useful, aside for raising brand awareness.

"In Q1 2016, 17.2 billion mobile apps were downloaded worldwide, an 8% increase over the corresponding period of 2015."

The App Environment: More Challenging Than Ever

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Performance Measurement Has Matured

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Advertising Effectiveness Scorecard

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11 charts are included in the full report:

App Install Advertising: Key Challenges, Trends and Effectiveness Ratings

Mobile App Store Downloads Worldwide, Android vs. iOS, Q1 2015 & Q1 2016 (billions)

The App Environment: More Challenging Than Ever

US Smartphone App Users, Installers and Buyers, 2014-2020

US Tablet App Users, Installers and Buyers, 2014-2020

Average Number of Apps Used Daily vs. Monthly Among US Smartphone and Tablet Users, by Generation, Dec 2015

Performance Metrics on Day 1 vs. Day 30 for iOs App Installs Worldwide, by App Category, Q1 2016

Performance Metrics on Day 1 vs. Day 30 for Android App Installs Worldwide, by App Category, Q1 2016

Average App Retention Rates over the First 90 Days of Use Among Mobile App Users Worldwide, by OS, Nov 2015-March 2016

Mobile App Store Downloads Worldwide, Android vs. iOS, Q1 2015 & Q1 2016 (billions)

Performance Measurement Has Matured

Metrics Used to Measure Mobile App Success According to Client-Side vs. Agency Marketers Worldwide, May 2016 (% of respondents)

Quality Costs More Than Quantity

Mobile App User Acquisition Benchmarks Worldwide: Average Cost of Acquiring a Loyal iPhone App User, April 2011-April 2016 (activity analyzed by Fiksu DSP)

Top 10 App Install Media Sources for Gaming vs. Nongaming Apps Worldwide, by OS, H1 2016 (index*)

Interviews included in the full report:

Interview conducted on August 9, 2016

Interview conducted on August 18, 2016

Interview conducted on August 22, 2016

Interview conducted on July 21, 2016

Interview conducted on August 19, 2016

Interview conducted on July 13, 2016

Interview conducted on August 23, 2016

Interview conducted on August 9, 2016

Interview conducted on August 16, 2016

Interview conducted on August 16, 2016

Interview conducted on July 12, 2016

Interview conducted on August 22, 2016

Interview conducted on August 24, 2016

Interview conducted on August 17, 2016

Interview conducted on August 16, 2016

Interview conducted on August 19, 2016

Interview conducted on August 29, 2016

Interview conducted on August 22, 2016

Interview conducted on Aug 19, 2016

Interview conducted on August 29, 2016

Interview conducted on August 9, 2016

Interview conducted on July 27, 2016

Interview conducted on August 16, 2016

Interview conducted on July 20, 2016

Interview conducted on August 29, 2016

Interview conducted on August 18, 2016

Interview conducted on August 22, 2016

Interview conducted on August 12, 2016

Oliver Birch

Director, Marketing

Hothead Games

Interview conducted on August 23, 2016

Tom Cummings

Vice President, New Market Strategy

Fiksu DSP

Interview conducted on August 22, 2016

Oles Dzyub

Business Development Manager

GDM Group

Interview conducted on July 26, 2016

Lou Orfanos

Senior Vice President, Products

Localytics

Interview conducted on July 28, 2016