App remarketing drives 50% more paying users
In 2020, savvy app marketers are emphasizing not only the acquisition of new users to their apps, but also the re-engagement of their existing and lapsed ones through owned and paid channels.
Poor user retention, deeper measurement, improved data-driven skills, and better segmentation tools are all leading causes behind this phenomenon.
To understand the impact of re-engagement, particularly paid remarketing (also known as retargeting), we’ve analyzed 7 billion remarketing conversions of over 2,000 apps.
We’ve found that while the share of remarketing from all marketing-driven conversions (which include non-organic installs and remarketing conversions) per app has stabilized, adoption rates have grown. In fact, remarketing is now an integral part of an app’s marketing strategy, boosting its user lifetime value and profitability.
1 in every 5 apps run remarketing campaigns
Remarketing is used by 20% of apps worldwide, an 18% increase compared to 2019 and a 65% jump since 2018. As we can see from the chart below, APAC leads the way in both adoption and share of conversions.
Judging from the share of remarketing conversions and the share of apps running remarketing campaigns, we can say that this activity has proven itself for most apps.
A category breakdown yields the following:
- Across all verticals, the average growth in the share of remarketing conversions from 2018 to 2020 was 14%. Notably, however, is Europe’s growth, with the share of conversions rising by 22% in 2020 compared to 2018.
- The Finance vertical saw significant growth in conversions year over year, jumping by over 50% — this is especially interesting as the number of apps running remarketing campaigns has barely changed (+4% 2018 vs. 2020), meaning that the apps that use remarketing are doing it more YoY.
- Shopping apps are the real stars of remarketing, experiencing the highest growth rates across the board, growing by more than 30% in the share of remarketing conversions.
- Gaming apps had a 250% lower share of remarketing conversions than Shopping. The reality is that only a small percentage of Gaming apps run remarketing. Given the substantial revenue uplift of Gaming apps that do remarket (see ahead), they are clearly missing a significant opportunity.
Does investment into remarketing actually result in lifetime value uplift across the board? Find the answer to this question and others in the data below.
Why invest in remarketing?
Let’s take a minute to understand the benefits of running remarketing campaigns in today’s hyper-competitive landscape:
- Retention is still a huge challenge. According to AppsFlyer retention data, while non-organic retention increased by around 20% into 2018, day 30 retention of organic users only increased by about 5% in all verticals. Overall, rates remain low, reaching only 5.5% and 6.8% on day 30, for non-organic and organic respectively.
- User acquisition costs rising. The reality today is that it costs marketers more money to acquire new users for their apps. Although not a pure apples-to-apples comparison when we compare CPI and CPC, the cost to acquire a user is 5-10x more expensive than the cost to re-engage a user.
- Accessibility of advanced measurement infrastructure. Before turning to the increasingly sophisticated marketing analytics tools, it’s also important to recognize the evolution of marketers, and the mobile ecosystem at the core of it all.
While technology has allowed for richer analysis and better measurement, improved data-driven skills among marketers can also be credited with sharper segmentation and more effective remarketing efforts.
Availability of more robust segmentation tools. With increasingly more advanced segmentation tools at their disposal, marketers can drill down into their app’s unique audience segments to see which users deliver the greatest revenue and which are most likely to churn, among others.
That way, they can avoid overwhelming the wrong users with remarketing ads and focus only on those with the greatest potential.
Increased adoption of deep linking for personalization. The steady adoption of more sophisticated deep linking technology for personalized user experiences by marketers has led to an increase in the opportunity of remarketing as well.
Working with targeted audience segments, deep linking smoothly delivers users to appropriate and customized landing pages within the app, increasing remarketing campaigns’ relevancy, decreasing churn, and ultimately improving overall profitability.
Performance. As evident in the data below, it is clear that remarketing positively influences not only the revenue from your users but also the overall performance of your app in most cases.
Remarketing leads revenue KPIs upward
The consistent rise in performance metrics tells the story about the value of app remarketing:
Share of paying users gets a boost from remarketing. In this simple comparison, we looked at the share of paying users in two groups – those who run remarketing campaigns and those who don’t. We found that in most markets and categories, remarketing campaigns increase the share of paying users.
- Overall, apps running remarketing campaigns in Q1 2020 averaged a 6.5% share of paying users, more than 50% higher than those not running remarketing.
- Significant differences are seen among Entertainment, Lifestyle, and Midcore Games, where those who run remarketing campaigns see more than 100% higher share of paying users.
Average revenue per paying user (ARPPU) uplift. To go even deeper, we examined two groups of paying users among apps that run remarketing: those who were exposed to a campaign and those who were not.
We then compared the revenue uplift (an overall ARPU comparison would not be as accurate because of significant variance in the audiences, since apps tend to remarket high quality users).
- In contrast to the low share of both remarketing conversions and the number of apps actually running those campaigns, the payout for Gaming apps that do remarket users is massive, showing a significant uplift in ARPPU, especially in EMEA where remarketing leads to 2x higher ARPPU.
- Despite Shopping’s domination in the share of remarketing conversions, the revenue from such efforts in this vertical is not as high as other categories with a global average uplift of nearly 20%, which is still significant. Furthermore, with a relatively high scale of paying users and purchases, this uplift is significant when it comes to actual revenues.
- In the US, Entertainment apps had the most impressive uplift, generating close to 150% higher ARPPU vs. users who were not exposed to remarketing campaigns.
Key takeaways
Moving forward, investment in remarketing is no longer reserved for savvier marketing teams; instead, it should be considered a vital component of your app marketing efforts overall.
- Launch dynamic remarketing. The best results are often achieved through a dynamic remarketing campaign rather than a static one. Increased relevancy and personalization can make all the difference. Here’s a good read that will help you get started.
- Big payouts for Shopping. In general, we can see the massive opportunity of shopping apps: according to Criteo, mobile retail generated 3x higher conversions in-app than on mobile web.
This adoption, along with the consistently positive correlation between remarketing campaign spend, a high number of conversions, and revenue, makes it clear that the Shopping vertical will continue to enjoy increased profitability through remarketing efforts
Gaming vertical as an anomaly. From our data, we can see that 16% of apps in Gaming run remarketing campaigns versus 59% of apps in Shopping. Despite, or perhaps because of, the savviness of marketers in this vertical, remarketing is not prevalent, at least partially because of the complexity involved in measuring these campaigns.
We will not explore these questions in-depth in this report; however, we can only conclude that there is clearly a missed opportunity here. Remarketing is on the rise, with high payouts (in terms of performance uplift) for apps that invest, and yet, only a very small share of Gaming apps actually do.
- UX is everything. That’s why understanding when to start remarketing, for which audience and how often, is critical, as increased frequency can generate serious problems and potentially damage a brand beyond repair.
- Incremental measurement for true remarketing analyses. Measuring remarketing is best done by looking at the incremental effect. There are so many things that might affect your users’ experience besides the remarketing ad – where they were acquired (maybe even organic), their stage within the app, their overall app experience – so make sure you isolate the remarketing effect.
Good luck re-engaging!