For marketers supporting brands that have invested in building their own mobile apps, the numbers highlight the significant challenges that exist when trying to get consumers to download, install, use and keep those mobile apps.
Solving those challenges can require big outlays of cash. According to mobile app marketing firm Liftoff, across all app categories, it now costs marketers more than $4 to deliver a mobile app install, more than $30 to drive a mobile app account registraion and more than $75 to produce a mobile app purchase.
But it gets worse.
90% of the time consumers spend in apps takes place within their top five apps. And all told, half the time spent in apps is now taking place in the five mobile apps with the highest usage overall.
For all age groups age 25 and up, the top five apps are all owned by Google and Facebook. In the 18 to 24 age group, all but one of the top five apps, Snapchat, is owned by Google and Facebook.
Much has been made of the Google-Facebook digital advertising duopoly and perhaps nowhere is the power wielded by these two companies more evident than in their mobile app dominance.
For marketers, this dominance creates a stark reality: if you want to reach consumers on mobile, you are going to have a very hard time doing so if you’re not active in the Google and Facebook advertising ecosystems. In other words, if you want to reach consumers on mobile, you now realistically have to go through Google and Facebook.
That explains why, for instance, over 80% of Facebook’s ad revenue now comes from mobile despite the fact that five years ago, its mobile ad revenue was nil and everybody was debating whether or not the world’s largest social network could ever figure out how to monetize its mobile usage.
So what should marketers do?
As it relates to reaching consumers via mobile, the better question is: what can marketers do? The dominance of Google and Facebook makes it all but impossible to market at scale on mobile without spending money with these behemoths. But there are still other opportunities.
There are numerous app categories such as music, weather, games and personals, in which at least three-quarters of digital time spent takes place in mobile apps. Google and Facebook aren’t the dominant players in these categories, and some of the companies that are, such as Spotify and Tinder, are increasingly building out their own ad businesses.
There are also other app categories that are on the rise. For example, comScore says that news apps now account for 41% of the time consumers spend consuming news through digital channels. That’s a six point gain from a year ago. So marketers will have more plentiful opportunities to find non-Google and non-Facebook opportunities in this category too.
For marketers tasked with supporting a brand mobile app, the trends are not favorable, but that doesn’t mean that brands can’t succeed with their own mobile apps. It does, however, mean that end user value proposition is more important than ever. Simply offering a mobile app of marginal utility and throwing lots of money at marketing it is not good enough. Consumers need to see value if they’re going to download, install and use a new app.
With this in mind, it’s worth noting that the most widely used mobile wallet today is the Starbucks app. Because it’s integrated with the coffee chain’s loyalty program, and is actually required to be used to earn rewards, Starbucks customers have a compelling incentive to use the app. Marketers need to be able to offer a similarly compelling incentive to their target audiences to be successful today.