A global survey of mobile app marketers reveals rich insights into what’s ahead for app marketing in 2017. Learn about how apps make money and where they are investing. Understand which media will attract more app marketing dollars in 2017. See how re-engagement marketing is changing the priorities of the industry – for the better. See what's on the minds of senior app marketers in this fast-reading survey of app marketing leaders.
4. 4
Provide a view into the
collective thinking of
marketers for both pure-
play app companies and
other businesses active in
the app space.
ƒƒ What categories and regions are they focusing on?
ƒƒ What strategies are they using to drive growth on their
businesses?
ƒƒ What sorts of tools and solutions are they using to
enable data-driven marketing?
ƒƒ How do they expect to invest their marketing dollars in
the future?
ƒƒ What are their primary KPIs?
ƒƒ What are their opinions and concerns regarding fraud,
UA costs, and measures of user quality?
Provide specific insights into the following:
Mobile App Marketer Survey Objectives
4
5. 5
ƒƒ Quantitative survey
ƒƒ Email invitation delivered to a broad cross-section of app marketers
ƒƒ 50% based in the US/50% outside the US
ƒƒ $10 Red Cross donation and a copy of the complete survey results were offered as an incentive to respond
ƒƒ Total respondents: 146
Research Design
5
Brand Marketers
88%
Agency Professionals 12%
Middle Management
39%
Practitioner
23%
Exec/Sr
Management
34%
Don't Know 4%
7. 7
EXECUTIVE SUMMARY
APP MARKETER CHARACTERISTICS
App marketers are pioneers, with a high degree of knowledge about their field
Most have 4 years or less in the field
¾ rate their knowledge of the field as strong or expert level
Marketing teams responsible for apps tend to be small
65% say their teams have 5 people or fewer
Just 8% say that their teams contain more than 20 marketers
Most common target regions for apps managed by our marketer sample were regions
with stronger economic development and large English-speaking populations
North America, EU, India, A/NZ and LATAM were most popular target regions
8. 8
EXECUTIVE SUMMARY
APP MARKETING TRENDS
Advertising and in-app purchases were the most common revenue streams
As has been shown in other studies, paid apps play a small role
Advertising is leveraged by almost half of app businesses to drive revenue
Purchases of real world and virtual goods were the next most popular revenue
streams 34% leverage more than 1 revenue stream
For games, IAPs dominate, but advertising also plays a major role
CPI is still king in mobile app media buying, with more than ¾ of marketers
reporting they use it for at least part of their spend
Next most popular is CPA, as more media companies address the historic scaling issues
with this model
More than a third of marketers report leveraging CPC despite the extremely high rates
of click fraud in app user acquisition
More than half of marketers say they leverage 5 media vendors or fewer, but just under
half say that they have increased the number of media partners they work with over the
past year
9. 9
Marketers report that they expect to make changes in the way they spend
marketing dollars over the next 12 months
Most report that Mobile display spend will hold steady or increase
Many expect to spend significantly more in video, content marketing, search,
influencer marketing and ASO to drive UA
Traditional media and incentivized are likely to decline as a share of total spend in the
months ahead
Remarketing is set to grow rapidly in the months ahead
58% say they have at least tried remarketing, and another 28% say they plan to in the
next 12 months
Majority of marketers report trial of and/or interest in remarketing
Share of spend level remains modest but appears poised to explode
EXECUTIVE SUMMARY
10. 10
PLATFORM USAGE
In-app analytics and attribution tools are the most commonly used platforms for mobile app
marketers
85% of marketers say they use an in-app analytics tool
69% of marketers say they use an attribution platform
Strong interest in ASO tools, with more than 80% using or planning to use in the next 12 months
With modest growth rates expected for attribution and in-app analytics sectors, players in these
spaces will likely need to drive brand switching in order to grow their businesses significantly
Marketing automation, A/B testing and app performance measurement tools are all expected to
grow rapidly in next 12 months
EXECUTIVE SUMMARY
11. 11
MARKETER OPINIONS
Most marketers say it’s getting tougher to drive installs in their category(ies)
More than 2/3 say that installs are getting more expensive to drive
Just under 2/3 say that it is getting harder to drive installs
Marketers much more concerned about user quality and monetizability
81% say that revenue matters more than UA counts in their KPIs
78% say user quality matters more than it did a year ago
Majority report strong attention to LTV, retention rates and uninstall rates for optimization
Marketers are very concerned about fraud and fraud readiness
75% concerned about the costs of fraud to their business
Less than 20% strongly agree that their companies have a good handle on how to address fraud challenges
Just 11% strongly agree that their companies have made sufficient investment in protecting their businesses
against fraud
EXECUTIVE SUMMARY
13. 13
APP MARKETERS ARE TRAILBLAZING THEIR NASCENT DISCIPLINE;
80% HAVE 4 YEARS OR FEWER OF MOBILE APP EXPERIENCE
“How long have you been working in the mobile app space?”
40%
35%
30%
25%
20%
15%
10%
05%
0%
13%
32%
35%
20%
Less Than 1 Year 1-2 Years 3-4 Years 5+ Years
14. 14
63%
53%
43%
33%
23%
13%
3%
22%
52%
21% 2% 1%
I am an app marketing
expert
I am very knowledgeable
but not an expert
I have some app marketing
knowledge
I am new to mobile
marketing
I dont know/prefer not to
say
How would you assess your own knowledge of the
mobile app industry and mobile app marketing?
APP MARKETERS ARE VERY AWARE OF WHAT THEY KNOW …
AND WHAT THEY DON’T
About 3/4 of marketers rate themselves as at least “very knowledgeable”
about the industry
But less than one quarter call themselves experts – likely because they are continuously
“learning on the job” in a constantly evolving space.
15. 15
70%
60%
50%
40%
30%
20%
10%
0%
64%
14% 12% 4% 0% 3% 3%
1-5 people 6-10 people 11-20 people 51-99 people 100+ people Don’t know/unsure21-50 people
MOST APP MARKETING TEAMS ARE COMPACT;
MEMBERS MUST PLAY MANY ROLES
“About how many people are responsible for app marketing in your company?”
About 2/3 of marketing teams have five or fewer people
16. 16
APP MARKETERS PRIORITIZE US/CANADA, EU,
AND ENGLISH SPEAKING REGIONS (INDIA, ANZ)
“In which region(s) do your apps compete?“
7%
16%
25%
28%
35%
35%
38%
47%
63%
Other
China
Japan
Southeast Asia
Latin America
Australia/NZ
India
European Union
US/Canada
0% 10% 20% 30% 40% 50% 60%
17. 17
APP MARKETERS SURVEYED PROMOTE
A BROAD RANGE OF APP TYPES
“In which app category(ies) do your apps compete?”
Education
23%
Shopping
& Retai
20%
Lifestyle
15%
Utility
14%
Travel
19%Other
12%Education
10% 10%Kids
& Media
6%Food
& Drink
5%
Don’t Know
Gaming, shopping, lifestyle, utility and travel apps were most well represented in our sample,
in keeping with general industry trends
Social
22%
Games
19. 19
WIDE VARIATION IN AVERAGE MONTHLY
APP MARKETING EXPENDITURE
Average monthly marketing spend per app ($USD)
51% 27% 23%
Up to $25K $26K-$100K $101K+
About a quarter of marketers reported heavy spend rates of more than $100K per month – the
industry “whales”
But more than half reported spend rates of less than $25K per month
20. 20
MOST COMMON MONETIZATION APPROACH:
IN-APP ADVERTISING
“What is the primary revenue stream(s) for your company’s app(s)?”
32%32% 32% 24%
Advertising is the most common revenue source for our sample of app businesses
34% of apps have multiple revenue streams
Having multiple streams is increasingly common as a way of “hedging bests” and maximizing
profitability, particularly for apps targeted to multiple international regions where different
monetization strategies have varying levels of effectiveness
Virtual Goods
IAPs
Virtual Goods
IAPs
Real Goods
Purchases
Service
Subscriptions
46%
In-App
Advertising
21. 21
DEVELOPING MARKETS MORE LIKELY TO
RELY ON ADVERTISING MONETIZATION
Percent of app marketers that identified
advertising as a revenue stream for their businesses
36%61%
Apps in developing economies rely more on advertising, enabling users to “pay with attention”
versus shelling out cash
Apps in developed economies far less likely to have ads, especially outside of the gaming and
media/entertainment genres
US/Canada, EU. ANZ,
SEA, Japan, Korea
China, India,
LATAM
22. 22
IN GAMING, HEAVY RELIANCE ON VIRTUAL GOODS FOR REVENUE;
ADVERTISING PLAYS A SECONDARY REVENUE ROLE
Percentage of gaming marketers who say their businesses
are using this revenue stream
64%91%
IAPs nearly ubiquitous, leveraged by more than 9 out of 10 game businesses
Strong usage of advertising as well.
Very consistent with historic patterns, particularly for freemium titles
While, several years ago, game companies often incorporated advertising later in the product life
cycle or not at all, these days it is a key element in monetization
Virtual Goods
IAPs
In-App
Advertising
23. 23
FOR APP PROMOTION, “WORKHORSE” DISPLAY ADVERTISING HOLDING
ITS OWN EVEN AS SPENDING FLOWS TO NEWER MEDIA CHANNELS
Video, Paid Search, Content, ASO, and Influencer marketing slated to grow in the next 12 months
Display spends looks to stay steady in the months ahead
Traditional media and incentivized installs may decline as a share of total spend as concerns over
accountability and user quality grow
Mobile Display
Banners
Mobile Video
Paid Search
(Including App
Stores)
Incentivized
Installs
Traditional Media Email Marketing Content Marketing
App Store
Optimization
Influencer
Marketing
Will Spend More 24% 47% 55% 18% 14% 20% 29% 38% 42%
Will Spend About the
Same 39% 22% 23% 26% 25% 39% 31% 37% 23%
Will Spend Less 18% 8% 6% 33% 27% 15% 14% 6% 7%
Don’t Know/Unsure 20% 24% 17% 24% 35% 26% 25% 19% 28%
“We would like to better understand how you plan to invest marketing dollars over the
next 12 months. Please tell us if your company is increasing spend, keeping spend about
the same, or decreasing spend in the following areas.”
24. 24
“Video advertising will represent a growing share of
mobile app marketing spend in the future.”
Somewhat Agree,
36%
Strongly Agree
21%
Don’t Know 9%
Strongly Disagree 3%
Somewhat Disagree 8%
Neither Agree Nor
Disagree
23%
57% EXPECT VIDEO TO PLAY A LARGER
UA ROLE IN THE FUTURE
25. 25
2 OF 3 OF MARKETERS
ARE INTERESTED IN LEVERAGING APP STORE SEARCH ADS
“Our team is already using or plans to use
the new app store search ads from Apple and Google.”
Strongly Agree,
38%
Somewhat Agree,
24%
Don’t Know
17%
Neither Agree Nor
Disagree,
16%
Somewhat Disagree, 3%
Strongly Disagree, 2%
26. 26
CPI MEDIA BUYING LEADS,
OTHER PRICE MODELS ARE GAINING SHARE
STORE SEARCH ADS CPI is used by three quarters of marketers, and CPA has become very popular as well, with almost 6 in 10
reporting they use it for at least part of their plans
CPC is used by more than a third of respondents despite the extremely high levels of click fraud in the category
“Which buying model(s) does your company use for
paid app user acquisition marketing?”
75%
Cost
Per Install
57%
Cost Per Action
(e.g., Registration,
Lead
37%
Cost Per
Click
37%
Cost Per
Thousand
2%
Cost Per
Purchase
2%
Cost Per
Purchase
Education3%
Hybrid Model
6%
Don’t Know/
Unsure
27. 27
MOST MEDIA BUDGETS SPAN 5 OR FEWER PARTNERS;
LESS THAN A QUARTER USE MORE THAN 10
STORE SEARCH ADS“How many media partners marketers do you work with?”
35%
30%
25%
20%
15%
10%
5%
0%
5%
20%
54% 29%
22%
10%
5%
8%
None 1-2 3 to 5 6 to 10 11 to 20 21 + Don’t Know
28. 28
ALMOST HALF ARE SPENDING WITH MORE PARTNERS
While the TOTAL number of media networks in the app industry is in long-term decline (from 1000+),
almost half of marketers say they have INCREASED the number of partners they work with
Versus one year ago, are you working with more media companies, about the same
number or media companies, or fewer media companies?
48%
16%
MORE
37% SAME
FEWER
29. 29
ALMOST 6 IN 10 BUY ADS TO RETARGET EXISTING APP USERS;
CLOSE TO 90% EXPECT TO WITHIN A YEAR
“Do you field re-engagement or retargeting campaigns for apps? “
70%
60%
50%
40%
30%
20%
10%
0%
58%
Yes
28%
No But Plan to in
Next 12 Months
5%
No and No Plans to
9%
Don’t Know
30. 30
TO DATE, MOST APP REMARKETING
INVESTMENTS ARE MODEST IN SCALE
“About what percentage of your total app marketing
budget is allocated to re-engagement/retargeting?”
3%
1%
1%
13%
23%
31%
28%
51-100%
31-50%
21-30%
11-20%
6-10%
0-5%
Don’t Know
0% 5% 10% 15% 20% 25% 30% 35%
32. 32
App Performance Measurement (e.g., New Relic, App Dynamics)
A/B Testing (e.g., Optimizely, Swrve, Leanplum)
Mobile Marketing Automation (Leanplum, Kahuna, Urban Airship, Swrve, Localytics)
App Store Analytics (e.g., App Annie, Sensor Tower)
Mobile App Attribution (e.g., Apsalar, Kochava, Appsflyer)
In-App Analytics (e.g., Localytics, GA, Mixpanel)
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
APP-FOCUSED SAAS PLATFORMS INCREASINGLY POPULAR
“We’d like to understand what sorts of tools your company uses for app marketing. Please tell
us which of the following types of tools your company uses or plans to use in the next year.”
85% 7%
69%
65%
37%
31%
20%
9%
17%
23%
25%
24%
In-app analytics and attribution are most established platform types and expected to continue to grow
App Store Analytics tools expected to grow its penetration significantly over the next year
MMA, A/B testing and app performance tools appear poised for growth in next 12 months
(Grey and Orange = Currently Use.
Black = Plan to Use in Next Year)
34. 34
Somewhat Disagree, 3%
67% OF MARKETERS AGREE
UA COSTS ARE RISING RAPIDLY
“The cost to drive an install in my category(ies) is increasing rapidly.”
Neither Agree Nor Disagree, 20%
Strongly Disagree, 1%
Don’t Know, 8%
Somewhat Agree,
43%
Strongly Agree,
24%
35. 35
65% SAY DRIVING INSTALLS NOW MORE DIFFICULT
“It’s getting more difficult to drive installs in my category(ies).”
Somewhat Agree,
41%
Neither Agree
Nor Disagree,
20%
Strongly Agree,
24%
Somewhat Disagree, 7%
Strongly Disagree, 2%
Don’t Know, 6%
36. 36
Neither Agree Nor Disagree, 7%
Strongly Disagree, 0%
84% PRIMARILY FOCUS ON REVENUE
KPIS, NOT INSTALL COUNTS
“My professional goals are primarily focused on achieving
revenue targets versus delivering specific install counts.”
Somewhat Agree,
37%
Strongly Agree,
47%
Don’t Know, 6%
Somewhat Disagree, 4%
37. 37
78% CARE MORE ABOUT USER QUALITY NOW VS.
A YEAR AGO
“Our team is more focused on the quality of installs than we were a year ago.”
Somewhat Agree,
28%
Strongly Disagree, 1%
Don’t Know, 6%
Strongly Agree,
50%
Neither Agree Nor Disagree, 11%
Somewhat Disagree, 4%
38. 38
84% ANALYZE PARTNER/CAMPAIGN RETENTION
RATES AS A KPI TO OPTIMIZE UA EFFORTS
We carefully consider retention rates for installs driven by different
media partners and channels in order to optimize our spending.”
Somewhat Agree,
37%
Strongly Agree,
47%
Neither Agree Nor Disagree, 7%
Strongly Disagree, 0%
Don’t Know, 6%
Somewhat Disagree, 4%
39. 39
54% ANALYZE PARTNER/CAMPAIGN UNINSTALL
RATES AS A KPI TO OPTIMIZE UA EFFORTS
“We carefully consider uninstall rates for installs driven
by different media partners and channels.”
Somewhat Agree,
33%
Strongly Agree,
21%
Neither Agree Nor Disagree, 17%
Strongly Disagree, 4%
Don’t Know, 6%
Somewhat Disagree, 18%
40. 40
80% ANALYZE PARTNER/CAMPAIGN LTV &
ROI AS KPIS TO OPTIMIZE UA EFFORTS
“Our team closely tracks the cost of acquiring
a user relative to the lifetime value of that user.”
Somewhat Agree,
37%
Strongly Agree,
43%
Neither Agree Nor Disagree, 3%
Strongly Disagree, 1%
Don’t Know, 8%
Somewhat Disagree, 8%
41. 41
Neither Agree Nor Disagree, 8%
Don’t Know, 3%
78% HAVE CONCERNS ABOUT THE COSTS OF APP FRAUD
“I am very concerned about the costs of fraud in the app category.”
Somewhat Agree,
36%
Strongly Agree,
42%
Strongly Disagree, 3%
Somewhat Disagree, 8%
42. 42
Neither Agree Nor Disagree, 13%
Somewhat Disagree, 12%
Strongly Disagree, 6%
64% OF MARKETERS HAVE SOME UNDERSTANDING OF
HOW APP FRAUD IS PERPETRATED
“I have a strong understanding of how fraud is perpetrated in the app industry.”
Don’t Know, 4%
Somewhat Agree,
44%
Strongly Agree,
20%
43. 43
Somewhat Disagree,15%
Strongly Disagree, 9%
LESS THAN 20% STRONGLY AGREE THAT
THEIR COMPANIES KNOW HOW TO ADDRESS FRAUD
“My company has a good handle on how to address
app fraud and protect our business from fraudsters.”
Neither Agree Nor Disagree,17%
Don’t Know, 8%
Somewhat Agree,
34%
Strongly Agree, 20%
44. 44
Somewhat Disagree,10%
Strongly Disagree, 13%
Strongly Agree, 11%
ONLY 1 IN 10 STRONGLY AGREE THAT
THEIR COMPANIES HAVE MADE
ADEQUATE INVESTMENTS IN FRAUD PROTECTION
“My company has made adequate investments to protect our app businesses from fraud.”
Don’t Know, 9%
Somewhat
Agree,
28%
Neither Agree
Nor Disagree,
29%
47. Thomvest is an early-stage venture capital firm with over $250 million under management. We primarily focus on
opportunities in Silicon Valley with early stage B2B startups in the fields of financial technology, mobile ad-tech,
SaaS, and security. The capital we invest is our own, enabling us to be more creative, flexible and patient with our
entrepreneurial partners. More than two-thirds of the companies we have funded in the last decade have either
gone public, been acquired, or continue to grow as independent businesses.
About Thomvest
L E A R N M O R E
info@thomvest.com or visit our website at
www.Thomvest.com
CONTACT PERSON
Nima Wedlake
Associate
Thomvest Ventures
Nima@thomvest.com