Are App Marketers Spending Enough on User Retention?

January 10, 2020

This article is included in these additional categories:

Business of Marketing | Customer Engagement | Customer-Centric | Digital | Marketing Budgets | Mobile Phone

Liftoff Mobile App Budget Share for Reengagement Jan2020More than two-thirds (67%) of US mobile owners report that they do not download apps. But how often are those who do download apps using them – and what are app marketers doing to keep users engaged? Here’s what a new report [download page] from Liftoff reveals.

Historically, marketers have found it a challenge to keep app users engaged with an app and avoid churn even as early as one month after an app has been downloaded. Today, the drop-off rates for app users are even more dramatic and start within the first few days. Citing global data from AppsFlyer, the report shows that this issue continues, with only one-quarter (25.2%) of users interacting with an app on the first day of downloading the app. Retention drops by almost half between Day 1 and Day 3 (13.1%) and by Day 7 two-thirds (65.9%) of users have stopped engaging with an app.

Liftoff’s data shows that although users drop off quickly, the largest number of mobile app marketers (26.4% share) do not begin re-engaging new app users until after Day 30, although some (21.8%) begin re-engaging on Day 7. Only 15% of these marketers say they make an effort to keep users engaged starting on Day 1. Surprisingly, about 1 in 10 (9.5%) mobile app marketers say they don’t re-engage app users at all.

For the majority of mobile app marketers, the emphasis appears to be on acquiring app users rather than retaining them. Indeed, two-thirds (65%) of those surveyed reported spending 20% or less of their budget on re-engagement rather than user acquisition. Furthermore, more than one-quarter (28%) of the marketers surveyed say they allocate just 5% of their marketing spend towards re-engagement instead of acquisition. Only 5% of respondents say they split their budget evenly between acquisition and retention, while 1 in 10 spend more on re-engagement than acquisition.

Other data from AppsFlyer quoted in the report emphasizes that retention rates are also dependent on the app category. By Day 7, most app categories experience a steep drop-off in users, with the exception of News (19.4%), Comics (15.4%), Weather (15.1%) and Sports (13.9%) apps which retain an above-average percentage of users. By Day 30, News apps retain 12.7% of their users while Weather, Comic and Sports apps retain 9.4%, 7.9% and 7.4% of users, respectively.

To read more, the full report can be downloaded here.

About the Data: The Liftoff survey data is based on a survey of more than 300 mobile app marketers conducted in September 2019.

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