App Marketing industry registered an impressive growth in the past year, with mobile ad spend 14% higher than 2021. $336B were spent in mobile advertising, confirming its crucial role in mobile user acquisition strategies. As a result, new app downloads grew too, surpassing 250 billion and following the positive trends of the previous years.
In such a fast-moving industry we have decided to put together our answers to some of the most pressing topics in mobile user acquisition, such as install growth, session trends and user patterns. You’ll also get your hands on exclusive data and expert industry insights on everything from app categories and regional trends, to mobile ad formats and platforms.
This report will provide actionable insights that will equip marketers with the tools they need to improve their mobile acquisition efforts and conquer the world of mobile app marketing in 2023 and beyond.
- While there are some generale truths about regions, such as the most expensive cost of traffic and higher CPIs in the US compared to the rest of the world, there are also key differences based on app categories. Let’s look at the dominance of China over United States when talking about fintech apps.
- Speaking of app categories, mobile games and fintech apps are projected to drive the overall app market growth and to see a significant increase in consumer spend.
- Regarding platforms, Apple iOS 14.5 updates didn't stop the industry's steady growth as iOS remains the first platform for average CPI. Android has also seen unprecedented growth, with an increase in budget following the uncertainty related to Apple’s updates.
- There is a significant difference between the average CPIs for different creatives, with videos averaging at $6.85 compared to banner ads at 3.95$. Videos and banners have respectively the highest and the lowest CPI, but videos claim also the first spot in terms of ROI.
Mobile User Acquisition by Region
When designing their mobile user acquisition strategy, advertisers often target multiple geos, based on their insights and goals. By observing different performances per country, you can optimize your ad spend towards the best geos, while at the same time understanding what to improve in the less successful goes for your app. Take for example the difference average CPI per regions:
As seen in the graph, we have compared CPIs in the USA and EMEA, based on our app install campaigns run in both regions. The average CPI in the US is $5.11, compared to the EMEA, which is lower, albeit still high. Compare this to LATAM, where the average CPI stands at $0.30, it is evident that the cost per install is significantly influenced by the user's location. Socioeconomic status of the population will affect the pricing. Advertisers typically anticipate that customers from wealthier nations will spend more in-app and so be more valuable. Such high-quality users become the main target in their mobile user acquisition strategy.
Diving deep into the most successful app categories, we can see that Mobile Games represent the biggest vertical in mobile app marketing in every key metric. New downloads are skyrocketing as shown in the chart above and reached 90 billion in 2022.
China leads the way for in-app revenue, accounting for more than 40% of the global gaming app earnings. The United States stands in second place with 30%. Japan, South Korea and Germany complete the top 5 countries by mobile games' revenue.
Digital transformation has changed the way people engage with financial institutions, which combined with a boost in mobile user acquisition efforts, has led to a massive growth in fintech apps’ downloads.
As seen below, China and the United States still have the biggest market share of global revenue, with more than a combined $800M, which accounts for about 84% of the total fintech app revenue in the world!
Users have now fully embraced mobile commerce, which represents more than half of the total e-commerce market. According to Data.Ai, people are going to spend more than 100 billion hours using shopping apps in 2023, generating sales of $5 trillion.
The global Ad Spend for shopping apps is set to reach $5.4 billion, with the United States representing the biggest market.
Mobile User Acquisition by App Categories
As shown by our graph, Fintech is fast becoming the forerunner for the highest average CPI of all app categories, overtaking mobile gaming. However, the average CPI for mobile gaming is also affected by the wide range of game categories, which have very different CPIs.
Another trend is that it is anticipated that non-game revenue will increase at a rate that is more than twice as fast as that of games. With subscriptions continuing to fuel strong development in industries including entertainment, social networking, and health & fitness. Games and non-game downloads will both experience stronger growth return after installs plateaued following the spike in 2020 from COVID-19
Cash is no longer king
In 2021 fintech apps reached over 1 billion downloads in the worlwide. This growth is seen across all regions, with North America coming out on top with a 69% year over year increase in installs last year.
According to the Global Payments Report, the use of cash has declined a staggering 42% since 2019. Also, by the end of 2021, 52% of purchases were made with a digital wallet. This acceleration of digital payments shows that the convenience of banking apps, as well as digital wallets is taking over fast.
For fintech apps the onboarding process, which requires the account creation and the KYC to verify the user's identity, is the key to the success. The easier the onboarding process the higher the chance of users becoming customers. That's why fintech apps’ developers often focus their mobile user acquisition strategy on the onboarding process. As a consequence, the install-to-registration rate is one of the most important app marketing KPI to be monitored. As an example we show here the registration rate in these 3 countries in Europe, one of the fastest growing regions.
Hypercasual rise to dominance
In 2021, the global mobile game’s market was worth $135.9 billion and by 2025 this is projected to reach an astonishing $169.7 billion. This phenomenal growth is why we all need to be paying attention to the mobile games sector and the role of paid user acquisition.
Here we see the breakdown of the ROAS (return on ad spend) across several mobile gaming categories 2022. Game developers closely monitor ROAS in their mobile user acquisition strategies and they always request it as a hard KPI when running app install campaigns.
While hyper casual games are growing increasingly popular, it is action & strategy games that generate the biggest payback for the developers, with an average return on ad spend of 62.75%. The differences in ROAS between game categories are due to different CPIs and different monetization strategies. Indeed, strategy games often combine in-app purchases with ads, while hyper-casual games monetize mostly through ads and based their mobile user acquisition campaigns on the volumes of installs.
Hyper casual games are redesigning the future of mobile gaming. This genre of games are any apps with simple mechanics, are usually free to play, and involve very little design. As of the beginning of 2022 Casual Games stands for 80% of all mobile games downloads and 35% of In-App Purchases.
Mobile User Acquisition and Creatives’ Trends
Using creatives effectively plays a major role in mobile user acquisition and becomes a relevant tool for app campaign optimization. The ultimate reason is that different ad formats have distinct consequences on ad spend and ROAS. There are different types of app install campaign creatives and they deliver different results depending on the app vertical.
The cost is affected by a variety of factors, such as the platform and the ad format. For example there is a significant difference between the average cpi for videos, compared to that of banners. However, video ads tend to attract more high-quality users for mobile games, who generate more value to the game developers through in-app purchases.
Therefore, a well-designed mobile user acquisition strategy always includes creative rotation and creative A/B testing, performed in order to assess different creatives’ results in terms of CTR, ROI, ROAS and any other meaningful business KPI.
Mobile User Acquisition by Platform
As we’ve seen before, iPhone users do not only have more financial freedom but also are generally more willing to spend money in-app. While Android might have more downloads, iOS users spend twice as much in general and four times as much when it comes to shopping apps.
When developing your mobile user acquisitions strategy it becomes imperative to understand the key differences between the two platforms in terms of cost, ROI and all the other metrics to be monitored in app install campaigns.
The consensus in mobile user acquisition is that app downloads from an iOS user are generally of a better quality, due to their higher purchasing power, and higher likelihood that they generate in-app purchases. This tendency to spend more than Android users means they are more lucrative for the advertiser. This leads to higher CPIs in the industry for iOS app install campaigns
Additionally, the data suggests that if the app is free, iOS users are more likely to purchase post-install. They are less likely to delete the app and therefore, the higher CPI is arguably justified. Whereas, Android users are classified as non-committal and less likely to become a lifetime customer.
iOS 14.5 marked the end of IDFA as we knew it, and this revolutionary update was the turning point for the app marketing ecosystem. However, after a slight drop in iOS paid installs, due to rising costs and limited optimization capabilities, marketers are adjusting to the recent changes and both installs and Ad Spend are increasing once again.
Any effective mobile user acquisition strategy takes into account all the aspects highlighted in this report, such as platforms, creatives, regions and category trends. Data-driven analysis is essential to optimize app install campaigns and improve your overall app marketing performance. Combining such analysis with the understanding of macro trends across the above mentioned dimensions will take your mobile user acquisition strategy to the next level.
As usual, the best mobile user acquisition strategy doesn’t stop with the launch of app install campaigns, but it heavily relies on continuous tests and optimization techniques like creative A/B tests, analysis of contextual dimensions and many more. Iterated refinement of your mobile user acquisition strategy is the key to success and to achieve ROI-positive app growth.