Are You Making The Most Of Mobile App Installs?

Are You Making The Most Of Mobile App Installs?

Australian marketers might like to keep a sharp eye on mobile advertising trends in the US right now. This year it is estimated the mobile ad spending will constitute a majority of the digital ad spend after a strong, nearly 60 per cent growth over the last 12 months.

B&T Magazine
Posted by B&T Magazine

With Australia already the third largest recipient of targeted ad spend as measured across the Kenshoo network (behind the US and the UK), what is true on one side of the pond will likely prove true here.

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In Kenshoo’s Q2 Mobile App Advertising Trends report, the authors note, “For consumers, the mobile and app experience is a highly personal one. Mobile devices represent a curated individual world: Which apps do we install, and which ones grab our attention and become embedded? Whose content do we invite into our lives, and whose do we block?”

For marketers, they say, the challenge comes from getting consumers to discover, download, install and ultimately, to buy-in to the experience. And, importantly to continue to engage beyond that first moment.

Among the specific highlights of the report;

  • Advertising spend by mobile app developers has almost quadrupled year-on-year (YOY).
  • The growth of app installs has outpaced spend, increasing +346 per cent since Q2 of 2014.
  • While click-through rate is down YOY, the click-to-install rate has increased +32 per cent.
  • While the cost per click for mobile app install ads has increased YOY and the CPM has been flat, the cost per app install has dropped 12 per cent, which will become more relevant as Facebook changes bidding models to consider conversions over reach or clicks.
  • The gap in cost per install between iOS and Android devices has narrowed considerably in 2015 as more developers enter the market, implying that there is less of a premium on iOS users than there has been in the past.
  • Mobile app advertising is booming according to the data and is driving much of the growth seen in social advertising.

As the study notes, “With the increasing attention on mobile app marketing via social media, it is not surprising that the industry has seen considerable growth. The combination of new entrants to the space, and increasing budgets have driven overall spending up nearly 4 times what it was one year ago. “

Overall paid social growth across all advertiser types (including, but not limited to mobile app advertisers) for Q2 this year was up 114 percent compared to a year ago.

Furthermore the data reveals that in Q2 2015, there were twice as many app titles as a year ago. With so much additional activity it is not surprising that the floor has remained solid under the CPM price. On a per thousand impression basis, the cost of mobile app advertisements on paid social media is down just one percent from Q2 of the previous year and has retreated from its peak in Q4.

And there is an interesting trend for marketers to watch – an evolution in pricing models. The signs are that social channel is moving towards bidding based on conversions rather than reach or clicks.

Highly efficient

Mobile apps are also delivering strong efficiency on the path to conversion.

According to the authors, “Once a user has clicked on a social ad for a mobile app, just under 1 in 3 of those clicks turn into an actual app install. Android and iOS have similar results in three of the five quarters described by the index, with Android holding the overall edge based on the other two quarters, which may have seen specifically compelling Android titles.”

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The report notes that the wider appeal of consumer apps may drive the higher CTR than gaming and other app types however click to install rates for gaming apps are higher than for consumer apps, implying that the broad appeal of consumer apps gives way to higher intent for gaming.

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In their conclusion the authors write, “The growth of mobile app advertising spend speaks to both an increase in the number of advertisers and increased spending from those advertisers. This puts pressure on the agile marketer to respond to both competition and scalability, while still being able to quickly engage with the mobile audience.”

And they say , “The switch from reach- or click-based bidding to algorithms that are based on conversions (installs) reflects all of these dimensions, and should encourage continued investment as marketers become better equipped to draw a more direct line from their investment to the value of, and flowing from, the apps themselves.”

What to do next

To meet the challenge of rising costs and increased competition the report offers several strategies.

This includes, for instance, creating nested lookalikes and testing match types from most similar (top one percent vs. greater reach (top five percent)).

“If you are looking to drive response rates, the narrower audience of the former strategy will likely provide the most performance improvement, albeit at lower volumes. Anecdotally, lookalike audiences have performed better than those based on stated behaviors or affinities in the social space.”

And as always, it remains important to tailor campaigns to the operating environment even though some of the larger distinctions between iOS and Android are starting to wane.

Finally, say the authors, marketers should also keep in mind the fact new sources of inventory are emerging regularly in the mobile app space.

“Google Search App Ads, Google Play Search Ads, Instagram, Mobile Display, Yahoo! Gemini and Admob all provide opportunities for expanded reach and interaction with your audience,” they write.