01
KEY findings
60% YoY surge in iOS non-organic installs in Q4 2023
Large Asian players drive 125% leap in iOS NOI in Q2 & Q3 2023
19% YoY rise in paid remarketing in Q4 2023
01
introduction
All eyes on loyalty after 2023 growth
Mobile app commerce saw a significant uptick in 2023, particularly among iOS users. Notable gains were registered across a variety of metrics including app downloads, remarketing conversions, and transaction volumes — a trend extending into 2024. Ad spending also went up, especially on iOS, while Android saw increases in most countries but a drop in the top two markets of India and Brazil.
The rise in iOS activity was driven by three main factors:
The general economic recovery which led to increased consumer and advertising spend.
A renewed marketing focus on iPhone users, who typically tend to have high purchasing power, amid increased confidence in measurement during the data privacy era.
Substantial investments from Asian mobile apps in ad campaigns — efforts which successfully produced a large volume of installs in affluent markets that later translated into a significant audience of loyal consumers.
Another key change that transpired in the past year is the shift back from owned media towards paid re-engagement campaigns—quite the pivot from the previous year.
With intense competition for eCommerce app downloads and usage, marketers are reevaluating their strategies and increasing budgets to stand out. As we approach the 2024 holiday season, it’s evident that the industry is evolving, and keeping abreast of these shifts is crucial for brands seeking a competitive advantage.
The 2024 edition of The State of eCommerce App Marketing offers insights to help eCommerce brands successfully navigate these changes. By understanding the current trends, businesses can confidently implement acquisition and remarketing efforts that focus on ambitious loyalty programs, aiming to boost revenue and customer lifetime value.
* All results are based on fully anonymous and aggregated data. To ensure statistical validity, we follow strict volume thresholds and methodologies and only present data when these conditions are met. When normalized data is presented, the share of each month out of the total for the entire time frame is shown to create a trend.
02
Top trends
Consumer spend continues steady climb
After a tougher 2022, mobile eCommerce has seen healthy growth since March 2023. Year-over-year data reveals that not only did in-app purchases (IAP) see a substantial 15% increase in Q4 of 2023 compared with the previous year, but the growth momentum also carried into Q1 of 2024: +21%. This rising trend lends solid evidence for the ongoing expansion in mobile commerce.
As we look across the timeline, the classic seasonality in shopping behaviors is evident, with Q4 consistently demonstrating a seasonal boost in IAPs. This pattern held steady across both iOS and Android, confirming a predictable peak in consumer spending towards the end of each year.
Interestingly, the spring of 2023 brought an uncharacteristic spike in IAPs in specific markets like the UK and France. It appears that this increase can be attributed to marketing efforts by some large Asian apps and a corresponding rise in user engagement. This dynamic led to a notable, though temporary, lift in consumer spending, reflecting the powerful impact of all-in paid marketing.
As we’ve seen above, we note that the share of paying users has increased by 12% on both platforms during the peak season, especially in Brazil, the United States, and India (on Android).
In-app purchase revenue trend by platform (normalized)
1st purchase is key to gain more loyal users
Heightened competition in the eCommerce space is more than evident when we look at the share of buyers among installers. At most, only 1 in 10 convert and that’s just for iOS in peak season, while off-season numbers can drop below 5%.
But once users cross that line, nearly 60% become loyal consumers (having made at least two purchases). This attests to the powerful loyalty channel that is the mobile app, as these users demonstrate a higher degree of interest and engagement.
From that perspective, the time to purchase has to be measured thoroughly. According to our data, the average user makes that coveted first purchase 3.6 days post install – with no significant differences between iOS and Android numbers.
Remarketing activations should therefore focus on the first week post install to convert as many installers as possible. Marketers are following this strategy, doubling down during the first day with 40% of conversions (when a user clicks on a remarketing ad and opens the app), and over 75% during the first week. On average, within a 30 day period, the first paid remarketing conversion is registered 2.5 days post install.
We then note that a second purchase occurs 10 days post install. To secure this order, marketers should explore whether to drive more remarketing investment around this time frame.
Share of buying users by platform (within 30 days of install)
Share of buyers and time to purchase by number of purchases
“Acquisition should be a year-round affair, and the focus should switch from hard sale or conversions – to building trust. If you build trust in April and remind your members that you’re there for them in November – there’s a better chance you’ll acquire their attention and their business during the holiday season.”
Maya Levin
Manager, Growth Marketing
Massive iOS UA push in key markets
Several large Asian apps launched ambitious and successful marketing campaigns across major Western markets including the United States, UK, and France, challenging the traditional surge in app installs typically seen during the holiday season.
That momentum didn’t slow down as the first quarter of 2024 rolled around: the apps that dominated in Western markets also began making waves in Japan, Brazil, and Saudi Arabia. These markets have one thing in common: their iOS users generally have more to spend.
The Asian players also managed to pull in more repeat shoppers each month than established names, although they still have a ways to go to catch up with giants like Amazon and Walmart. Will the connections made by aligning low-cost product strategies with budget-savvy shoppers turn into love that endures? Despite ongoing trust issues, the allure of great deals continues to draw in crowds, setting the stage for a showdown between price appeal and brand loyalty.
Looking ahead to the rest of 2024, the temperature is only going to rise. These Asian apps have settled in and are gearing up to give retailers a run for their money, especially as we near the crucial Q4 shopping spree. Many players could be affected, even indirect competitors whose offering is vastly different, as rising competition will impact not only consumers’ attention but also media costs, which are expected to rise.
Install trend by platform (normalized)
$6.6 billion in ad spend led by 43% iOS jump
The global app market saw a generous infusion of cash in 2023. We saw an impressive total app install spend of $6.6 billion, with iOS platforms leading the charge at $2.9 billion despite only a 15-20% device market share.
However, budget allocations between Android and iOS diverge significantly. Android saw an 18% cut in ad spend from 2022 to 2023, while iOS saw a robust 43% increase. Higher spend also led to higher CPI, which meant overall higher install costs for iOS marketers.
Looking at the geography of app spending, the US and key Western European nations such as the UK, France, and Germany dominated the global stage. This is primarily due to the higher Cost Per Install (CPI) rates found in these regions, which starkly contrast with the far more modest CPIs in emerging markets such as India.
This surge in iOS ad spend is an expression of strong confidence among marketers in the platform. With iOS users generally having more to spend and the platform offering a premium environment, investing in iOS advertising is increasingly seen as a strategic move.
This further highlights the platform’s ability to attract quality engagement, making it a prime choice for app developers and advertisers aiming to maximize their reach and impact.
2023 app install ad spend by country *
* Spend is calculated by multiplying the number of non-organic installs by the cost per install, and then factoring data.ai market share data for Shopping apps by country; estimate excludes China; iOS NOIs are calculated based on traditional attribution installs multiplied by a factor from AppsFlyer’s Single Source of Truth (SSOT) which combines SKAdNetwork installs and then performs deduplication.
2023 app install ad spend by country *
Economy uptick drives rise in remarketing, even on iOS
As the economy improved throughout 2023, marketers showed more willingness to pay. In contrast to 2022, when tight budgets drove brands toward cost-effective owned media channels for their remarketing efforts, improved economic conditions last year saw a significant shift towards paid remarketing.
This change not only reflected increased budgets but also signaled an economic recovery, empowering advertisers to more actively engage their audiences, which in turn boosted paid marketing conversions.
The iOS remarketing landscape also experienced profound transformations due to the evolving dynamics of user-level data. The rollout of iOS 14.5 and its stringent privacy measures led to a steep 65% drop in remarketing conversions that lasted until March 2023. But the latter part of the year witnessed an impressive turnaround, with conversions climbing by 103%.
Despite the loss of IDFAs, remarketing on iOS can still work on large platforms and depend on the match rate — how many users the platform can recognize. When combining IDFA from consenting users (roughly 25%), email records, and even phone numbers, the match rate can be high. Therefore collecting these 1st party data signals with consent is key to successful remarketing on iOS.
Remarketing conversions by type (normalized)
03
Insights from Google
Granular insights: AI’s new frontier
If there’s one thing we know from today’s environment, it’s that privacy is king and data is scarce. That’s why eCommerce marketers need to get creative. Even with tighter privacy laws making lower-funnel data harder to come by, there’s now a goldmine of insights at the beginning of the customer journey, thanks to AI. Marketers are now tapping into this early-stage top of funnel data, focusing on the finer details of creative elements such as text, colors and backgrounds.
The ability to measure the impact of creative nuances has become a game-changer. With AI, we can dive deep, analyzing the specifics of an ad to see exactly what elements work best—let’s call it “the revenge of granularity.” This approach lets marketers get incredibly detailed, examining everything from scene types to individual design elements, to really understand what drives performance.
Data from non-gaming apps reveals, for instance, that ads with user-generated content see a 22% higher install-per-mille (IPM) rate on social platforms. Even more, ads with real-life footage perform 15% better than those with animations. This is why it’s crucial to embrace a granular approach to measurement. Detailed insights from creative analysis gives marketers a strong foundation to enhance their strategies.
Non-gaming IPM by media type: AI-powered scene breakdowns
Retail media poised for explosive growth
With advertisers ready to ramp up spending on Retail Media Networks (RMNs), retail media is on the brink of a major boom. Looking ahead to 2024-2028, eMarketer predicts a doubling in retail media ad spend, although the growth rate is expected to even out over time. Advertisers are confident about this channel with 73% planning to bump up their RMN budgets within the next year. Moreover, a notable chunk—$1 of every $6 spent on digital ads—is predicted to go to retail media.
What’s the secret sauce behind the surge of retail media? A smart blend of managing, using and monetizing first-party data in ways that are both trusted and in line with privacy regulations. Brands are getting increasingly savvy with innovative data collaboration systems that allow them to share their own highly valuable data without risk for the purpose of segmented audience creation, optimization, and measurement.
For publishers, retail media is evolving into a significant source of revenue by monetizing first-party data directly. Advertisers see it as an ace up their sleeve, effectively using first-party data from other brands to fuel growth across various platforms.All these factors are aligning to skyrocket the influence and significance of retail media.
eMarketer: Retail media ad spend (worldwide, 2024-2028)
04
KEY TAKEAWAYS
