User retention rates on apps are slowly improving – data driven user acquisition is key

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Source Appsflyer

User engagement has become a prime focus in the highly competitive freemium-driven app market. Now, AppsFlyer published a new report based on app installs and daily active usage that seeks to provide some global insights on the app industry.

According to The State of App Engagement report, user retention on apps is still a major hurdle. Just 10-12% of users continue to be active seven days post-download. A mere 4-5% will still use an app after one month. Organic users outperform non-organic ones on iOS by 15% and 21% on Android.

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Year-over-year retention rates however were improved. iOS retention rates increased 9% overall whilst Android saw a small drop in organic users of -6%. Undoubtedly, marketers are well aware of the value retention offers and seem to have doubled their efforts.

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However, app advertisers and publishers should continue to focus on data-driven user acquisition as well as in-app measurement to optimise their campaigns. Features such as cohort reporting, uninstall tracking and engagement boosting tools including retargeting and deep-linking can be valuable in streamlining the user experience.

The gap between average daily users is small. On Android, it’s 3.8 (organic) versus 3.56 (non-organic) average sessions per daily active users and on iOS it’s 4.3 versus 4. Overall, more sessions are performed on iOS than Android.

For marketers this means that non-organic users are valuable. Marketers can safely invest in app campaigns. Differences in organic and non-organic campaigns are lowest among Travel, Entertainment and Health apps and highest among Social, Utilities and Lifestyle apps.

Overall, monetisation of users is a daunting task. Less than 2% of those that download an app actually make in-app purchases. Non-organic Android users are more engaged earlier on, but then again iOS users are stronger buyers. Chances of an engaged iOS user turning into a buyer are 80% higher than on Android.

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That means app publishers should find out which channels or media sources delivered their users and whether retargeting, push notifications or other engagement tools can drive them to make a purchase or turn into a long-time user.

Additional revenue streams are also of benefit to the app maker. In-app advertising in particular has been proven successful and continues to be a major advertising format within apps. In addition, paid or free trial models should be considered if the app content matches the model. Subscriptions may work if the app offers ongoing value to the user.

When it comes to lifetime events, the report highlights that average app gamers perform around six in-app events in 90 days. Android devices outpace iOS owners by 20% and gaming installs generate generally higher engagement on Android with 30% more levels achieved.

However, iOS users make almost 20% more purchases than Android users. In addition, organic users are more active than non-organic ones.

The average user of a shopping app performs around 18 in-app events in 90 days. On the whole, organic iOS shoppers are more engaged than non-organic ones, viewing 90% more content pages and performing 35% more add-to-cart actions.

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As part of the report, AppsFlyer provided an interesting breakdown of app engagement scores by US city.

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A full global overview of regional app engagement rates is available in the full report.