By Andy Chandler, GM UK & Ireland at Adjust
The global App Economy is a massive yet hugely competitive market. Sensor Tower data estimates that worldwide app downloads across the Google Play and Apple app stores reached 115 billion in 2019, a 9% year-over-year increase. Sizeable audiences and their growth potential make for impressive stats, but more apps also mean more competition for those audiences — and more pressure on marketers to meet their targets.
To help marketers gain a deeper understanding of their audiences and user behaviour, Adjust has released its annual App Trends 2020 report. The guide charts a full year’s worth of data across Adjust’s 1,000 most popular apps – and most importantly, includes valuable insights into how COVID-19 has affected the App Economy.
Some verticals faring better than others under COVID-19
As people spend more time indoors and on their phones, the data shows clear increases in installs and sessions across several verticals.
With the pandemic forcing the majority of employees to work remotely, it’s no surprise that Business apps have seen a huge rise in sessions (up 105% from Q1 2019) and installs (up 70%). Revenue events are also up 75%, as users opt for premium versions to help ease the transition to working from home. And with many restaurants pivoting to takeaway only, Food & Drink apps also saw a significant increase in sessions — up 73% on this time last year.
Gaming has also predictably seen a large uptick in installs, as those forced to stay home seek entertainment. In total, Gaming apps saw a 47% increase in sessions and 75% increase in installs in Q1 2020 compared to Q1 2019.
Beyond these increases in installs and sessions, the report shows little evidence to suggest that there’s been a fundamental shift in user behavior post-install. Users are still taking the same actions in-app, such as averaging a little above two sessions a day, to churning at predictable points in the customer journey.
App marketing fast becoming a pay to play game
The report also sheds light on differences between paid and organic installs. One of the biggest shifts of app marketing in 2019 was the significant drop in organic discovery. App store lists are now, more than ever, dominated by big-name brands and studios, and newcomers make up only 8% of apps listed on the App and Play store top charts.
That means app marketing is fast becoming a pay-to-play game. The chart below reveals the split between paid and organic installs per vertical, detailing the typical share of installs — and the change in the share of paid since last year.
In 2020 and beyond, it will become more important than ever to attract users outside of the stores. With consumer demand for personalized content reaching an all-time high, more granular audience segmentation coupled with real-time personalization will be key to encouraging customer connection and driving conversions.
Switching the focus from user acquisition to retention
While marketers are finding new ways to attract users, there’s also the growing realisation that retention is the new growth. After all, in a market where it costs more to acquire new users than retain existing ones, it makes business sense to move to a new, retention-focused model that maximizes lifetime value (LTV).
While even the most addictive apps see users churn, our data shows the fall is not as steep for some as it is for others. Taking a look at the 30-day retention curve shows which app verticals are the stickiest, and which fail to keep their users.
At the end of the cohort, Marketplace and Music app users are the most loyal, with 13% of users interacting with the app on Day 30. By comparison, Shopping apps and Video streaming retain only 4.5% of users. The stickiness of Marketplace apps can be chalked down to integrating elements of social apps – users come back on a daily basis to check what has been posted in the same way they would on Instagram, Twitter or Snapchat. The same applies to the Gaming app vertical. The success of blockbuster titles, such as PlayerUnknown’s Battlegrounds, that turn gameplay into a community event, show the ability to play together is a powerful hook.
Time will tell how these trends develop over the rest of the year, particularly as the struggle to contain COVID-19 rumbles on.
However, the silver lining in this period of uncertainty is the resilience the mobile economy has shown to weather a shock as significant and far-reaching as a global pandemic.