By Andrey Kazakov, Vice President of Demand at AppLovin
It will come as no surprise to mobile marketers that gaming is the largest and most rapidly growing category of mobile apps. Mobile app usage surged during the COVID-19 pandemic, and mobile gaming led the charge. In fact, a report by App Annie found that between Q2 2019 and Q2 2020, mobile app purchases grew 15% YoY on iOS and 25% on Google Play.
While gaming apps have historically paved the way in best practices for user acquisition (UA), non-gaming apps are increasingly demonstrating strong results, as shown by their increased revenue. According to Sensor Tower, in Q2 of this year, app store revenue from non-game apps exceeded gaming app revenues for the first time ever. In fact, more than half of App Store spending in the U.S. now comes from non-game apps.
So, what’s caused this growth of non-gaming apps? At AppLovin, we’ve seen that the ad technologies (ad tech) powering mobile gaming’s growth are capable of doing the same for non-game apps. By adopting similar strategies, marketers and developers for non-gaming apps have the potential to acquire high-value users to drive long-term sustainable growth, as long as they choose the right ad partner. No matter which vertical you’re operating in– from finance, to health and wellness, to entertainment, there is vast potential to scale your app.
Breaking through the crowded mobile finance market
One app business doing just this is top 20 finance app Brigit. Brigit was looking for a cost-effective solution to scaling new subscribers. In the saturated personal finance market, acquiring new high-value users has become increasingly challenging. Brigit needed an acquisition partner that could help them grow profitably, by optimising for their most valuable down-funnel event – subscriptions.
With the help of an ad partner, Brigit saw a host of benefits. By acquiring high-value users at significantly better rates, they were able to make their marketing spend go much further. Their optimised campaign drove a 35% improvement in install rate, while their subscription rate increased by over 100%.
Reaching untapped global health and wellness audiences
Another non-game app business benefiting from growth as a result of rethinking its ad tech strategies is leading fitness and meditation platform, Daily Yoga. The app was starting to see slower growth as it was looking to expand it’s channel portfolio outside of major social platforms To continue to scale at their targeted pace, they needed to find a network that could identify and optimise toward quality iOS traffic. As Daily Yoga makes money through a premium subscription service, it was critical to target audiences that were likely to become subscribers.
As a result of changing up its ad strategies with the help of an ad partner, Daily Yoga was able to achieve higher traffic-volume, subscription growth, as well as reaching new, untapped audiences across the globe. They were also able to gain full control and visibility into its UA profitability.
Finding profitable scale and optimised retention
As well as acquiring new high-value users, retaining them is the next challenge – and that was exactly the case for popular news app SmartNews. Following years of rapid growth, the app needed to reach more users and further expand in the highly competitive news market. This was particularly critical in the US, where they faced stiff competition from the likes of Google, Yahoo!, and Flipboard — not to mention social media giants like Facebook. SmartNews makes money through in-line advertising, video ads, and content syndication — so retaining new users beyond 7 days was absolutely crucial for the media app.
With the help of advanced automation campaigns to drive installation growth and acquire high-value users, SmartNews was able to optimise towards and increase day 7 retention. With this additional source of high-value new users, they were able to continue growing and scaling in the U.S.
Leveraging ad tech fuelling the growth of gaming apps
So, what’s the secret behind the growth of these non-gaming apps? Let’s take a look at some of the key similarities we have noticed between the ad tech strategies that have been driving the growth of both gaming and non-gaming apps…
- Effective channel acquisition – Acquiring high-value users begins with an effective channel acquisition strategy.
- Timing and expectation setting – Marketers need to understand industry benchmarks for how much they will need to spend to learn before they can start setting and hitting performance KPIs.
- Channel allocation optimization – Budgets are usually allocated across channels in a way that will deliver particular payback within the required timeframe, allowing you to analyse individual channel performance at a particular scale and combine it with others to complement each other and reach the overall goal.
- Test and improve creatives – Trial and error is necessary at this stage to see which aesthetics and creative elements are working best, with the help of data analytics.
- Prioritise predictive analytics — Predictive lifetime value (pLTV) models drive the goals and actual buying decisions, meaning the more accurate pLTV models get, the more efficient UA.
- Continuous experimentation – All of the above depends on continuous experimentation in creative, UA, and predictive analytics.
What’s next for the growth of non-gaming?
We’re seeing a trend of consumer mobile businesses discovering new channels to be able to efficiently grow and compete in today’s app ecosystem. But this is only the tip of the iceberg because every consumer business that is mobile enabled should be taking advantage of the above, whether its food delivery, news, finance and wellness – you name it!
A successful UA strategy combines effective channel allocation and optimisation, creative testing, actionable data, and predictive analytics driven by pLTV. So regardless of the specific vertical, by fine-tuning these strategies, apps have the potential to acquire high-value users that drive long-term, sustainable and profitable growth.