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."