2021, in essence, was an extension of 2020 in terms of consumer behavior for the mobile marketing industry.
People continued to work remotely, order food, shop, communicate and even date online, to name a few of many mobile user habits. Most tasks that would require a trip into town have now been compressed into a few clicks and swipes of the smartphone.
As a result, social apps ranked as the top applications for users worldwide, as people – many of whom did not previously use them – turned to them to communicate with others during the ongoing age of COVID-19. In fact, the top 8 downloaded apps in 2021 have been social apps like TikTok, Facebook, and WhatsApp. Meanwhile, according to App Annie, the top-grossing apps included: Tinder, TikTok, and YouTube.
For the last few years, hyper-casual games have been the top choice for players and app advertisers alike. After 2021, App Annie predicts that companies will start to focus on building reach & engagement across online and social games; after all, people have become increasingly social online since 2020. Another interesting statistic for 2021 is that while social apps have the most visits, entertainment apps have recorded the longest average session times.
With apps like TikTok and Instagram doubling down on ‘short-videos’ to maintain the interest of their users and keep them engaged, there has been an overall trend by app owners migrating towards in-app engagement boosting strategies.
Changing Mobile App Engagement Strategies in 2021
The Importance of Engagement
Due to the changes in the OS stores algorithms (Google Play, App Store, etc.), user retention has now begun to play a big part in impacting the overall visibility of apps.
Some key statistics over the year for in-app user engagement include:
- Apps that engage with users at the right time and place see their 90-day retention increase by twice the industry average (between 20-30%).
- App owners realised that 63% of the users that engaged with their long-term retention schemes in Q1 were still active in Q3 and Q4.
- There was a 50% year-over-year increase in the number of surveys sent, with an average response rate of 16% (industry average for survey response rates is 1%). This has shown an increase in users’ willingness to respond and engage with the apps they use.
- Simply giving customers a choice to opt into or out of surveys resulted in high survey response rates of 60%.
Almost all apps experienced a significant change in their DAU due to COVID-19. Three main trends took place: massive drops, huge spikes, and a higher frequency of app usage.
As COVID-19 had brought about an increase in average app usage time, it had become important for companies to begin increasing the LTV of this surge in users; through engagement, they secured customer retention. In general, a study showed that a 5% increase in user retention resulted in a 95% increase in profits.
The industry has seen a shift as app owners look to focus on in-app engagement to bolster their profits as compared to user acquisition. They have doubled down on the increased app usage in 2021 to reach out to their customers, build brand equity and promote their engagement with their apps. Furthermore, this focus on engagement allows teams to lower their marketing costs, improve loyalty, and save resources.
The Circle of User Feedback and App Personalization
Many developers have scrambled to add personalization and customization options to their apps to allow users to make their app experiences their own, making the need for collecting user feedback and preferences all the more important. With more data, app owners have a better understanding on how to provide these personalized experiences to their user base, including ads. Personalized ads increase their CTR (click-through rate) as well as total revenue making for positive monetization metrics for the apps themselves.
Rolling back the clock, it is understood that all this is achieved simply by getting more in touch with one’s user-base. Thus, it would explain the rising importance of in-app engagement tools that allow app owners to communicate and create feedback loops with their users.
Accommodating for Attention Span
Another study has proven that there is an 88% decrease in consumers’ attention span year over year, which has huge implications for current and future mobile marketing trends and changes within the meta of the best practices within the industry.
For many apps relying on in-app purchases, this meant shortening the total user flow for purchasing. By decluttering payment methods and using engagement techniques, like a direct CTA (call to action) to the product/service page within their app, the journey of the user from discovery to buying becomes more manageable. The same theory holds for ads within an app; if the journey to the advertised app/service is made shorter and simpler through engagement tools, it will improve the efficiency and effectiveness of the placement. This tactic has helped Instagram see a 52% increase in ad revenue, as their carousel ads and ‘swipe up’ CTAs prove to be a success and set a benchmark for future mobile marketing trends.
With the update of iOS 14.5 on April 26th 2021, Apple made a serious shift in their approach to IDFA. Where an “identifier for advertiser” was automatically assigned to a user and provided to the app publisher before, now users have the ability to ‘opt in’ to provide this information to the apps they use. This means that ‘free’ apps relying on anonymous user data to provide personalized ads could no longer do so and have since taken huge hits to their revenues.
App publishers have been devising strategies to overcome the IDFA effect. At this point, what looks to be a future mobile marketing trend is the use of incentivization as apps reward users for ‘opting in’ to provide their data. However, the cost of rewarding per user opt-in will be felt.
From Ads to Subscriptions
Some free apps that would rely on targeted ads for their revenue stream (such as news or other content apps) saw huge drops in ad income. Consequently, many apps have begun to shift to a subscription-based model, however, Apple does charge 30% per subscription to the app owner so this is not an altogether profitable trend in the long haul for most publishers.
The Mobile Marketing Market was valued at $66.42 billion USD in 2020 and is expected to hit USD $253.40 billion USD by 2026, at a CAGR (compound annual growth rate) of 25% over the forecast period 2021 – 2026. Mobile marketing has quickly emerged as the most effective marketing technique via which enterprises can engage with their customers at any time of the day, regardless of the location.
With the IDFA effect, the normalization of a COVID-19-struck world, and the recent emergence of the ‘metaverse,’ the recent trends within the mobile marketing industry are sure to see huge changes in terms of engagement strategies as publisher strive to become early adopters of new technologies to boost their growth and better manage their engagement with their users.