Consumers are more willing to pay for apps and subscription-based app models continue to gain momentum. However, as engagement continues to rise—especially among women—so does the competition. According to a joint study between Liftoff and Leanplum, marketers will need to focus on value if they want to keep users opening those wallets once an app is installed.
Leanplum and Liftoff’s Mobile App Engagement Index examines over 257 billion ad impressions across 58.4 million app installs and 47.4 million post-install events from September 1, 2017 to August 31, 2018. This internal analysis covered six major app categories—Dating, Finance, Gaming, Shopping, Travel and Utility.
Subscription Acquisition Costs Decline Nearly Half
Engagement for subscription-based apps rose 32 percent over the past year, highlighting a link between value and retention. Acquisition costs for subscription-based apps have dropped year-over-year, as well, which is an added bonus. Leanplum noted costs of $86.99 for the index period compared to $162.22 last year.
Mark Ellis, Liftoff co-founder and CEO drew a connection between the report’s findings and Apple, which reported a 95 percent lift in subscriptions over 2017.
“Acquiring users for this app category isn’t inexpensive by any means, but the year-over-year data showcases major momentum for subscriptions,” said Ellis. “There’s no question that the long-term benefits of the subscription model, in the form of loyal users and stable cash flow, are worth the investment in service quality and marketing spend.”
Women Engage More, But It Will Cost You
Women are twice as likely to take action, boasting an install-to-reservation conversion rate of 62 percent compared to 22 percent for male users.
Acquiring female customers is more expensive, however, at $94.16, but the report found higher engagement that justifies the expense. Female app engagement is “highly compelling,” Leanplum noted, with a conversion rate of 3.8 compared to their male counterparts’ 1.8 percent.
Gamers Slow Down On Purchases
Mobile games may be a $55 billion industry, but the top 10 games control 20 percent of global revenue, according to SuperData Research.
Acquisition costs in the mobile game category decreased as engagement grew, according to Leanplum’s report. Acquiring a user one thing, but acquiring one that makes in-app purchases is quite another. The cost for this type of user increased 56 percent over last year, while in-app purchase rates dropped by nearly half.
Part of the problem is a surge in free-to-play (F2P) titles, especially as developers scramble to capitalize on the popularity of Fortnite. Initial acquisition for paying users is high overall, the report noted, but certain months yield better ROI. For example, September yielded the highest engagement rate (4.3 percent) at the lowest cost ($61.16).
Last year, gamers spent $36 billion, $9.1 billion and $5.9 billion on F2P mobile games across Asia, North America and Europe, respectively.