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MOBILE APP INSTALLS 2019 Marketers Innovate to Land Coveted Home Screen Placement

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MOBILE APP INSTALLS 2019 Marketers Innovate to Land Coveted Home Screen Placement In order to gain users in a saturated market, app developers and brands are becoming more sophisticated in their app install advertising and organic strategies. This eMarketer Report looks at the size of the app market, as well as the three major strategies that developers follow to acquire and engage app users. presented by Dear eMarketer Reader, eMarketer is pleased to make this report, Mobile App Installs 2019: Marketers Innovate to Land Coveted Home Screen Placement, available to our readers. This report is a great example of eMarketer data and insights that look at the size of the app market, as well as the three major strategies that developers follow to acquire and engage app users. We invite you to learn more about eMarketer’s approach to research and why we are considered the industry standard by the world’s leading brands, media companies and agencies. We thank you for your interest in our report and Branch for making it possible to offer it to you today. Best Regards, Nancy Taffera-Santos Nancy Taffera-Santos SVP, Media Solutions & Strategy, eMarketer eMarketer, Inc. www.emarketer.com 11 Times Square, Floor 14 [email protected] New York, NY 10036 MOBILE APP INSTALLS 2019: MARKETERS INNOVATE TO LAND COVETED HOME SCREEN PLACEMENT In order to gain users in a saturated market, app developers and brands are becoming more sophisticated in their app install advertising and organic strategies. What is driving the app installation marketplace? US Smartphone Users, 2019-2023 Consumer demand for apps is rising: Installs grew 11.6% millions and % change 250.6 year over year in Q1 2019, according to Sensor Tower. But 243.0 246.8 232.8 238.5 that growth was driven heavily by developing markets. App installation in developed markets is slower, though the supply of programs continues to grow. Gaming still leads the sector, but it now competes for ad inventory more directly with a range of verticals, including retail, travel, utilities and others, which drives prices higher. What are good app install strategies? App install advertisers once judged campaigns on the 3.0% 2.5% 1.9% 1.6% 1.5% number of installs produced, but they are now more likely to take post-install actions into account as well 2019 2020 2021 2022 2023 (i.e., in-app purchases or registrations). They also use Smartphone users % change this data to optimize ad targeting and messaging. The Note: individuals of any age who own at least one smartphone and use the smartphone(s) at least once per month same data helps them get a better understanding of the Source: eMarketer, April 2019 lifetime value (LTV) of users and the true return on ad 247591 www.eMarketer.com spend (ROAS). KEY STAT: The number of smartphone users is barely How important are organic strategies? growing in the US and other developed markets. Developers face tighter competition to gain a foothold on App store optimization remains important, even as app users’ home screens. store search ads proliferate. Most apps are downloaded organically, and they generally have the more engaged users. More companies, especially in retail, are also driving installs from their best customers through their website, email and other owned properties. CONTENTS How big a problem is app install fraud? 2 Mobile App Installs 2019: Marketers Innovate to Land Coveted Home Screen Placement App install fraudsters continue to innovate. Fraud prevention tools help cut down losses to fraud, but they 3 Background: What’s Driving the App Install Marketplace? can’t eliminate it completely. 5 App Install Advertising Grows, and Grows in Sophistication WHAT’S IN THIS REPORT? This report will look at the size of the app market as well as the three major strategies that 11 App Install Marketing Beyond Ads developers follow to acquire and engage app users. 13 App Install Strategies Beyond Android and iOS 14 App Install Fraud 15 Key Takeaways 16 eMarketer Interviews 17 Editorial and Production Contributors MOBILE APP INSTALLS 2019: MARKETERS INNOVATE TO LAND COVETED HOME SCREEN PLACEMENT ©2019 EMARKETER INC. ALL RIGHTS RESERVED 2 BACKGROUND: WHAT’S DRIVING Even so, actual demand for apps is more nuanced than the slow rise in smartphone users in the US and other THE APP INSTALL MARKETPLACE? wealthy countries would suggest. For one thing, app demand in developing markets is growing rapidly. We In any marketplace, supply and demand drives estimate that the number of smartphone users in India prices, and app install advertising is no exception. will rise by 13.2% this year. In Indonesia, the smartphone Advertisers are creating more apps because users audience will grow by 12.1%. consumers have made it clear that they prefer app App downloads in these countries are increasing even experiences—in the US, we estimate that 91% of more rapidly. Between 2016 and 2018, downloads grew smartphone time takes place in apps. 165% in India, 70% in China, 55% in Indonesia and 25% in Brazil, compared with just 5% in the US, according to Yet there is a relatively fixed number of smartphone App Annie. users in developed countries. The competition to land a place on limited home screen real estate is pushing More recent numbers from app analytics provider Sensor app developers and brands to spend more on install Tower show the trend continues. In Q1 2019, global app advertising and to become more sophisticated in their installs were up 11.6% year over year. overall app marketing. In developed markets, the fundamental constraint Mobile App Store Downloads Worldwide, Android vs. iOS, Q1 2018 & Q1 2019 on growth in app installs is the slow growth of the billions smartphone audience. In the US, for instance, the 28.1 number of smartphone users will grow just 3.0% this 25.2 year. At the core, that’s what’s driving up the app install 7.4 advertising prices and leading to more overall spending. 7.7 “We’re all competing for the same eyeballs,” said Pepe Agell, chief strategy officer at mobile platform Chartboost. US Smartphone Users, 2019-2023 20.7 millions and % change 17.4 250.6 243.0 246.8 232.8 238.5 Q1 2018 Q1 2019 Android iOS Source: Sensor Tower, "Store Intelligence Data Digest: Q1 2019," April 18, 2019 247057 www.eMarketer.com Other factors are driving the app market in developed markets as well. For one, the life cycle of apps is changing in a way that is increasing the LTV of a user. “Back in the 3.0% 2.5% 1.9% 1.6% 1.5% day, apps used to be one-hit wonders,” said Srinivas KC, 2019 2020 2021 2022 2023 vice president and general manager of InMobi, a mobile Smartphone users % change marketing and advertising provider. “They’d get a huge Note: individuals of any age who own at least one smartphone and use the spike of interest at the beginning, only to be followed by smartphone(s) at least once per month a long, slow decline. In the early days of the app store, Source: eMarketer, April 2019 247591 www.eMarketer.com top apps tended to be popular for only around 12 to 18 months at a time. More recently, we see subscription and repeatable app businesses scaling in a more sustainable manner.” MOBILE APP INSTALLS 2019: MARKETERS INNOVATE TO LAND COVETED HOME SCREEN PLACEMENT ©2019 EMARKETER INC. ALL RIGHTS RESERVED 3 Smartphone users also appear to be downloading more Those numbers will continue to increase, though growth apps. In the US, the average iPhone user downloaded has slowed since its peak. Published data in July 2018 47 apps in 2018, up from 44 in 2017, according to data from mobile app analytics platform Adjust showed provided by Sensor Tower. average numbers of apps added to the App Store per month dropped from 83,100 in 2016—when Apple The average number of apps installed on smartphones is tightened rules for apps—to a still-strong 46,000 in 2018. rising. In the US, Japan, South Korea and Australia, users had over 100 apps downloaded on their phone in 2018, Average Number of Apps Added per Month to the App Annie reported. In the US, that figure was up 15% Apple App Store Worldwide, 2008-2018 from 2016. thousands 83.1 Of course, smartphone users don’t typically use all those apps regularly. Comscore found in 2017 that most time with apps was spent with the top five (87%). By 62.6 April 2019, that figure had dropped to 83%, with the 54.5 top app dropping from 49% to 44%. Mobile time is still 45.7 46.0 concentrated in a few apps, but slightly less so each year. 37.1 30.5 20.7 US Smartphone App Usage Rankings, by Share of Time Spent, June 2017 & April 2019 13.2 % of total 5.4 1.3 June 2017 April 2019 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1 49% 44% Note: the App Store launched on July 10, 2008; 2018 data reflects averages 2 18% 18% through May 3 10% 10% Source: Adjust, "The App Store Turns 10," July 10, 2018 46%7% 240933 www.eMarketer.com 54%5% Games still dominated in app installs in Q1 2019, 63%3% accounting for 35% of global downloads, according to 72%2% App Annie. Even so, this figure is down from 39% in 82%2% Q1 2017. New verticals, such as shopping, utilities and 91%2% 10 1% 1% services, are now actively pursuing user acquisition 11+ 4% 7% strategies.
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