Smart marketers in the region are closely following consumers on their mobile journey, and this is reflected by a massive rise in popularity of the mobile app installs ad unit amongst marketers in Australia, says marketing software company Kenshoo.

Kenshoo data indicates that year-on-year spend growth in Australia for Q1 2015 is just over half the growth rate in the USA — 182 per cent, compared to 302 per cent. Considering the size of the US market and its number of apps, this is an encouraging figure that demonstrates Australian marketers are taking the channel seriously. Indexed figures from Q1 2014 below:

We previously covered underlying trends for click-to-install advertising released in Kenshoo’s Mobile App Advertising Trends Report indicating = consumers already spend more time on mobile than on desktop, and more than nine times as much of that is spent in apps rather than the mobile web.

Furthermore, research by PayPal and Ipos found = one in three digital buyers in Australia has made a purchase via smartphone — putting the country on par with the UK and just ahead of the US on this metric.

Among those who did purchase via smartphone, 64 per cent made a purchase via an app in the past year.

This represents a huge opportunity for marketers to engage their audience, and it informs the degree of importance Australian marketers should place on developing apps for their brand to boost revenue and sales.

Marketers can also benefit by moving to a cost-per-install (CPI) measurement associated with mobile app advertising, as the value of app-install ads can often be accurately quantified, thereby allowing marketers to report reliable ROI figures to the business. CPI has proven itself as a cost-effective way to grow daily users without wasted spend, and more installs also means higher rankings in the App Store top lists.

The chart below reveals the current top performing iOS lifestyle apps in Australia on AppAnnie. These brands are leaders in their categories and likely have successful CPI strategies in place to support their success.

Case study

A leading online retailer in the region recently launched an extremely successful Mobile App Install campaign on Facebook via Kenshoo, with outstanding results. Due to a combination of targeting and creative strategies, CPI was reduced by around 80 per cent.

Targeting was highly specific based on age, gender and interest categories. Testing was plentiful, with the online retailer creating hundreds of ad permutations and experimenting with various elements such as products and calls to action. By combining performance analysis with creative testing learnings, the algorithm optimised and executed weekly campaign adjustments to drive the best performance.

In addition, the advertiser established clear yearly, monthly and weekly goals as well as measurement KPIs. The technology optimises to these KPIs as the team structures the account to maximise reach and CPI performance at the same budget level.

Regional nuances

There are some nuances with the region that are worth noting when looking to advertise mobile apps. Australia’s smartphone-buying audience is younger than average around the world, with 74 per cent from the 18–34-year-old demographic — that’s a higher share of millennials among the smartphone-buying audience than in any country other than Mexico or China. Targeting, therefore, should accommodate this cohort and should be as granular as possible.

Also, just because someone downloads your app, that doesn’t guarantee they will stick around as a life-long customer. Apps can be discarded if they are not treated as part of a cohesive campaign. It is all about constant re-engagement and promoting customer lifetime value (LTV) through all advertising channels.

Fit to purpose

iOS and Android also need to be targeted differently. In Australia, Android holds 57 per cent market share with iOS taking 35 per cent. This differs with the US, where a report from Kantar World Panel indicating phones running iOS may have surpassed those running Android in terms of market share.

These platforms need to be targeted differently to optimise towards differences in performance metrics. For example, Android users are more likely to click on a mobile app ad, but once they click, iOS users are more likely to install an app. Also impressions, clicks, and app installs all cost more on iOS than Android.

Ads that specifically target large English-speaking countries cost more than the largest non-English speaking countries (by spend volume). It is interesting to note that high CPCs do not necessarily translate to high ad spend. In Australia, for instance, the average CPC is just over $0.80 compared to an average of $0.50 — likely driven in part by a smaller population doing the clicking.

Key takeaways

Marketers need to take mobile apps seriously if they want to grow with their customers. In Australia, we expect competition in the mobile channel to heat up and cause advertising spend, CPM, and CPC to increase over time. This is accompanied by decreasing CTR but an increase on the key measure of mobile app installs (CPI), which is a much more reliable measure of conversions.