The State of eCommerce App Marketing – 2024 Edition

In collaboration with
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Key findings

Consumer spend rises 15% YoY in Q4 2023 iOS led market growth with a 21% spike in-app purchases in Q4 2023, driven by economic recovery, outpacing Android’s 9% growth.
60% of first-time app buyers will buy again As fewer than 10% of installers convert to app buyers, securing the first purchase is key to driving loyalty since 60% of buyers will make at least one more purchase.
iOS leads $6.6 billion in UA and remarketing ad spend in 2023 Budgets in Apple’s platform jumped 43% in stark contrast to Android where spend dropped 18%. The US continues to attract most of it with $1.27 billion in iOS, and $1.23 billion on Android.
60% YoY surge in iOS non-organic installs in Q4 2023 An economic recovery and confidence in measurement drove up ad spend and consequently marketing-driven installs on iOS, while Android NOIs grew by 21% driven by a drop in CPI.
Large Asian players drive 125% leap in iOS NOI in Q2 & Q3 2023 A massive marketing push disrupted iOS install seasonality patterns in affluent countries, then expanded to Japan, Brazil and Saudi Arabia, spiking NOI in Q1 2024.
19% YoY rise in paid remarketing in Q4 2023 Another sign of recovery: Paid remarketing is increasing across platforms in peak season, especially on iOS at +35% vs. +17% for Android. We’re also seeing a 21% YoY rise in Q1 2024.
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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:

  1. The general economic recovery which led to increased consumer and advertising spend.
  2. 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.
  3. 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.

Data sample *

1,600 eCommerce apps (excluding marketplace and groceries) with at least 3,000 installs per month per country
4.6 billion Total app downloads of eCommerce apps from Oct. 2022 to April 2024
21.5 billion Remarketing conversions from Oct. 2022 to April 2024 (19B paid, 2.5B owned)

* 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.

“In a world, where consumers move from device to device, are less brand loyal, and are harder to reach, your connection with your customers is your competitive advantage. However, the majority of retailers (82% and 85%) agree that app customers tend to make more repeat purchases, are more loyal compared to non-app customers and are more willing to share their 1P data.” 

Lee Jones
Managing Director, App Ads
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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. 

Global cost per install trend by platform (USD)


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) 


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)

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Experts’ corner

Q&A WITH LEE JONES , MANAGING DIRECTOR, APP ADS AT GOOGLE

How do you see the 2024 holiday season shaping up as far as consumer behavior is concerned, considering the economic recovery and what are the implications for advertisers?

While shoppers have become careful decision-makers, they continue to spend on holiday. What we have seen is that as they approach holiday moments, shoppers typically move between different mindsets: deliberate, deal-seeking, determined, and devoted.

– Deliberate: Roughly three-quarters of purchases made from October 2023 to January 2024 were researched (Google/Ipsos, Global Holiday Shopping Study, Oct 2023 – Jan 2024).

– Deal seeking: 75% of holiday shoppers said they keep their eyes open for promotions throughout the holiday shopping season (Google/Ipsos, Global Consumer Continuous Study, Aug 2023).

– Determined: Last year, on average, consumers only completed less than half (43%) of their holiday shopping by December (Google/Ipsos, Global Holiday Shopping Study, Oct 2023 – Jan 2024).

– Devoted: 1 in 5 purchases during the holiday season were made using loyalty points (Google/Ipsos, Global Holiday Shopping Study, Oct 2023 – Jan 2024).

Within each mindset, consumers have specific needs that, when met, help them feel more confident in their purchase decisions & increase their purchase intent. One of the main ways to adapt your marketing strategy to these mindsets is by using the right touchpoint at the right moment. This is where the importance of using a diversified channel mix and doubling down on your app alongside your other channels comes in.

For example:
– Deliberate: As 93% of retailers say that customers are using their company’s app in-store for at least one type of task while shopping, advertising your app can help turn research into action (Google/Ipsos, U.S. UK, DE, App Retail Study, Mar 2023).

– Deal seeking/Devoted: Your app is a great way to optimize and grow your loyal customer base as 78% download apps to perform loyalty-centric actions. For example, to earn loyalty/rewards points, receive coupons and discounts, make frequent purchases, and exclusive offers and deals (Google/Greenberg, mApp vs. mWeb, US, 2021).

Being at a real inflection point of changes this year, with the rise of AI, loss of identifiers, and increased regulations, how effective can marketing be to tackle these?

In a world, where consumers move from device to device, are less brand loyal, and are harder to reach, your connection with your customers is your competitive advantage. 

However, the majority of retailers (82% and 85%) agree that app customers tend to make more repeat purchases and are more loyal compared to non-app customers (Google/Kantar, US, CA, UK, DE, JP, IN, AU, BR, Mar – Jun 2022) and are more willing to share their 1P data (Google/MTM, Winning Apps, 2023). 

So this is your opportunity to solidify and prove the role of Marketing as a profit-driver, and put AI to work for your business by optimizing all the touchpoints you have with your customer and use your app for higher profitability and long-term growth. 

Yet, while our core role as marketers is the same — to drive profitable growth and build our brands — the way we do it is changing. Indeed, Google AI is only as good as the data that you put in it. This also counts for all the channels and devices you are using AI for. The more connections you create with your customer, the more connections and improvements you can generate for your campaigns as well, which will ultimately reflect in your marketing performance.

With the holiday shopping season coming soon, how should brands adapt their advertising and what kind of Google tools can they use?

Marketers, to stay ahead and drive ROI, must embrace a holistic approach to the customer journey. This means meeting your audience seamlessly across all platforms – web, app, and desktop. 

To bring a method to this, we have developed a 3 step framework that all advertisers with an app should follow: measure, optimize and grow. 

Starting with tracking conversions across web and app campaigns, advertisers are then able to recognize the power of app conversions and optimize for them with Google’s deep linking, bidding and tracking feature Web to App Connect. 

After testing this framework with advertisers, we have seen that by increasing App campaigns for installs (ACi) spend, advertisers using Web to App Connect (W2AC) can achieve an average 21% increase in web campaign ROI (Google Data, Global divisions, Oct – Dec 2022). Here are the best practices for running App campaigns for installs together with web campaigns. 

Finally, for retail advertisers, we also encourage to adopt Google’s retail specific Ads features such as shopping feeds that can lead to an increase in 14% in clickthrough rate (Google Data, Global divisions, Feb 2023) and seasonality adjustments with your App campaigns for install during the peak season to maximize your campaigns’ performance.

How do you recommend splitting budgets between user acquisition and re-engagement (paid and owned) in the holiday season?

Going back to the multi-touchpoint journey of customers, marketers should focus on how acquisition and engagement campaigns work together instead of looking at them in silo. Customers don’t look at channels, so why would you? 

What we have seen typically with retail clients is App campaigns for installs and Performance Max/Search complement each other.

App campaigns for installs is the only Google Ads campaign that can optimize for App installs and has been proven to be very efficient for user acquisition while web campaigns like Performance Max and Search are effective for re-engagement, specifically when all connected and deeplinked through features like Web to App Connect. 

Two examples of the positive effect of using both campaigns together are adidas, who broke down organizational, measurement and campaign silos and now drives 2.4x higher Search and Performance Max ROAS thanks to their investment in Web to App Connect and App campaigns as well as G-star RAW who are now delivering +450% higher Performance Max ROAS through investments in App campaigns for installs (ACi).

Any guidance to have this conversation for those companies who have marketing teams split between apps and web?

Teams ultimately work against KPIs and benchmarks. So, In order to bring teams together, you need to bring budgets and KPIs together as well. 

The first step is to move towards combined KPIs and not split them across types of campaigns (acquisition vs engagement) or channels (web vs app). This will enable cross-collaboration across teams and pave the way for a successful holistic marketing strategy. 

One example is one of our top global retail customers who completely changed the way they looked at App and Web performance by looking at Average Revenue Per User (ARPU) across both web and app and saw that they could deliver more revenue at a reduced cost of sale even within tough economic conditions through their app. This led to 10x higher ROAS than web and 11x higher conversions rate then web.

Maya Levin, Manager, Growth Marketing at Bazaarvoice

What is your strategy when combining acquisition and remarketing activities, in general, and particularly during the holiday season?

At Influenster, we’re big fans of keeping it simple and showcasing our number one value prop without any special effects – you sign up, you get free stuff, end of story!

The holiday season is no different, but we do like to show you how can get free stuff which you can then gift… shopping sorted! We’ll start in October and tell you about our current and upcoming programs so you can claim as many free full-size products as you want.

For remarketing, we’ll make sure to both remind you of our existence AND get you to make sure that your interests are updated, so that we can match you with free products that you’ll like. For example, did you recently get a dog and didn’t select that you have a pet? You might be missing out on some fabulous dog food.

Which challenges do you foresee in the upcoming holiday season and how do you think they can be best overcome?

Every shopping season, the courting begins – marketers fight over your attention, and you, wanting to simply scroll through your feed, are bombarded by organic posts, paid posts, paid posts disguised as organic…

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.

Can you talk about your media diversification strategy: do you use a mix of channels to drive users to the app and do you test any new channels?

Our target audience is everyone who loves free stuff, which basically means *everyone*. That means we combine social media ads on platforms like Meta and TikTok, ACi on Google, maintain our Apple and Google Play storefronts and keep our followers excited on our organic channels.

We don’t cover every single platform out there, instead – we create target personas and think about where we might find them. Then we test multiple channels and messaging and find the best combination that provides brand exposure and cost-effective conversion metrics.

How important is driving customer loyalty for your business? Is it more important than in the past, and if so, why?

Customer loyalty has always been paramount and will continue to be a top-of-mind goal for us. Loyalty means trust – if you are perceived as honest, fair, a brand that cares about its members, then not only will your members stay, but they will become advocates and tell their friends about you.

What are the biggest trends in creative design and creative measurement? Which types of creatives do you find particularly effective?

We’re big fans of the classic, timeless pieces that appeal to everyone – videos that showcase our product and how it essentially makes your life better! The little moments that make you happy, like getting a box full of free products, or gifting something special to a loved one.

To measure the performance and draw conclusions for our next pieces, we combine insights from the marketing platforms, AppsFlyer and our BI tool, Mixpanel, for as close to a 360-view as possible.

Are you using any AI tools for creative, measurement, and optimization? Where do you think AI falls short in delivering or at least requires attention?

AI is everywhere and is a blessing, if you use it properly. To get the most out of AI, incorporate it in your everyday work and feed it constantly – upper funnel metrics, lower funnel metrics, ad performance, app usage, everything. Train it to be that good friend who always has the best constructive piece of advice.

If you’ve run holiday campaigns in the past – analyze your results, create a YoY trend, identify strengths and weaknesses. Take that raw data and ask your AI agent to analyze it as well. Did you reach similar conclusions? Did you discover a new test opportunity?

What you shouldn’t do, is use it as a quick fix for ad creations. “Hey 4.0, draft an ad for free mascara if you join Influenster”. Yes, it’ll probably spit out something nice and catchy, but will it be based on previous insights? Will it fit *your* audience?
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Key takeaways

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