The number of smartphone users is expected to reach 3.5 billion in 2020; this is 1 billion more than in 2016. As the amount of smartphone users is growing rapidly, the number of app downloads has also increased. New app installs are projected to reach 38.7 billion in 2020 on the App Store and 101.6 billion on Google Play, reflecting growth of 33 and 49 percent over 2016’s totals, respectively. At the same time, eMarketer research shows that, in 2020, people spend more than 92% of their mobile time in apps, rather than in mobile web; in 2016 it was only 87%.
Customers’ habits are changing, and that has led to the fact that companies needed to adapt their strategy to be with their customers, wherever they are. As a result, their focus changed and they started creating apps and using them as business tools and assets.
APPS FOR BUSINESS
For most niches, a mobile app is a necessity, especially when a high percentage of traffic comes from mobile phones and there is a high purchase frequency.
Sales from mobile devices have started to take over the ecommerce industry and this tendency will only grow. We see that mobile traffic is higher than desktop, too.
However, there are businesses that don’t need apps. If you have a small local business and you don’t have the money to develop and continually improve your app, if you have low mobile traffic, or if you want to sell a very specific product at a high price to state-owned enterprises or large corporations, you should stay away from apps (for now).
MOBILE APP MARKET CHALLENGES
When launching a product, it is important for every marketer to take into account the specific features and pitfalls of the mobile app market. Ad spend, competition in app stores, discovering high-value users, and relevance—these are the challenges that marketers need to overcome on their way to app success.
- Ad spend
Let’s start with ad spend. According to AppsFlyer, total ad spend for app installs is expected to grow every year by 27% up to 2022.
Your ad spend depends on several factors, including your app category, target market, channels, and the goals—that is, the number of downloads/chart position/revenue—you’d like to achieve.
- Competition in app stores
Another challenge is competition in app stores. The more apps are created, the more competition there is in the market. According to the Statista report, there are more than 2.8 million apps available on Google Play and more than 1.9 million on Apple’s App Store in 2020. That’s why investing in app development alone will not be enough; your app won’t promote itself, even if it is better than similar apps of your competitors. Mobile app advertising is what will help you to get the desired ROI.
- Discovering high-value users
Discovering high-value users that won’t delete an app on the next day can be quite challenging too.
The traditional model of mobile app advertising works on a one-fits-all approach and people get bombarded with tons of messages that are not relevant to them. There were no such things as personalization, transparency, or context. The traditional model refers to manual selling and buying. Human factors play a big role and usually lead to many mistakes. This makes advertising ineffective, and often even creates a negative impression of the brand or company.
Programmatic media buying, on the contrary, interacts only with the interested audience, with the right message at the right time. One striking benefit of programmatic mobile is the opportunity to work with customers on various levels of targeting capabilities and to provide them with personalized ad creatives. You can show ads, for example, only to those users who fall into a specific geofence—a zone close to the point of sale. When setting up ad impressions, you can specify the radius of the area around a specific location (for example, your store) or the exact address. Another benefit is the scale. Marketers are now allowed to launch ad campaigns across multiple devices and channels using a single dashboard and deliver ads across lots of publishers. Moreover, it provides advertisers and marketers with transparency. With programmatic, money is spent not on the logistics or administrative issues, but on a particular action (install, click, registration) and you always know what you are paying for.
69% of all digital ad spend is expected to be spent on programmatic. If we look in more detail, the US is the largest programmatic market, in 2019 ad spend reached $67 billion — accounting for 64% of all digital ad spend, according to Zenith. Second place is taken by China, spending $10 billion on programmatic in 2019, although it will rise 41% to reach $16 billion by 2021. The third is for the UK, where ad spend reached $7 billion.
- Relevance
Another challenge is relevance. Here are some of the mobile app marketing trends that will help you to better understand the situation in the mobile app market.
1. Personalized approach. Brands and companies should provide users with a personalized experience that is based on customers’ preferences, age, interests, etc. It will allow them to create a long-term relationship with customers.
2. Video content. It follows from the growing interest in AR (Augmented Reality) and VR (Virtual Reality) technologies. They promote a virtual experience that creates a connection between a brand and a user, so now customers are looking for face-to-face interactions. Video emails instead of traditional email marketing to promote an app is one example.
3. Automation. It will increase visibility into data and possible outcomes. As a result, marketers will be able to predict individual drop-off points in their apps and prevent them right from the beginning.
We see that mobile apps are the stars of the show in 2020 and their popularity will grow every year. With growing competition on the market, apps need mobile marketing more than ever to reach their audience. The only question is how to promote them in a relevant way. Programmatic appears as an effective tool between users and marketers. It creates a personalized experience, allows marketers to launch ad campaigns across multiple devices and channels, and provides marketers with transparency and automation.
