Today apps are more like a necessity for smartphone users. Thus, marketers are turning to app-marketing in order to connect with users. Apps are mostly used for communication, social networking, bookings, entertainment and gaming. While some apps are completely free, many come with in-app purchases and many are paid apps.
According to a recent survey by Google and Ipsos, half of the smartphone users in the US have never paid to download an app, while the remaining 50% have. This indicates that value offered by an app and the content quality acts as the deciding factor of whether an app is worth paying or not. Before getting into the details of app usage, let’s take a look a the U.S. app market.
Understanding the U.S. App Market and User Behaviour
In U.S., the number of smartphone users is expected to reach 207.2 million by the end of 2016. Across all the app stores, there are more than 5.7 million apps available for download. The most used apps are from the social and communication category, followed by gaming and entertainment apps.
On an average, the US smartphone users have 35 apps installed on their smartphone, the report highlights. 52% of these apps are used at least once in a week, against the 17% users who never use the installed apps. The US smartphone users spend nearly 50% of their online time on installed apps.
On Google Play store there are 2.2 million apps are available to download, followed by Apple App Store that offers about 2 million apps.
Users Pay for an App only if it Delivers Value
It’s interesting to evaluate the factors that convince a smartphone user to spend money on mobile apps. Out of the 50% smartphone users that pay for an app, 45% pay because they receive the content that they wanted, according to the report.
The report also highlights that 35% of the users have paid for apps because they offer some features or functionalities that are unavailable on free alternatives. Most of the paid apps are ad-free, making it clear that 33% of the respondents pay for a no-interruption app experience. This also validates the fact that advertisements are not welcome by this group of respondents.
Suppose a user wants an app for a particular task or action that is not available for free. In such scenario, 31% users buy these apps. Only 28% of the users depend on reviews before downloading an app.
A user will never pay for an app that has nothing relevant or valuable to offer. Hence, if an app is a paid one, it comes upon the shoulders of the developer to ensure this. It is a tough call to convince a user to pay for an app, especially if a free alternative is already present in the app store. Thus, no unique value addition means no downloads, which results in no revenue for developers.
Ads Aren’t the Most Influencing Factor to Download Apps
As per the survey report, advertisements do not drive app downloads. Rather, it is the word of mouth that catalyses downloads. When you get referred by a friend or family or relative, you tend to download it and use it. The fact that someone reliable and known is already using it triggers more downloads. About 51% agreed to download apps referred by friends or family or relatives.
48% users discover and download a new app while casually browsing app stores. This is fuelled by the need or requirement of the user. Users either download apps for a specific purpose or they opt for gaming and entertainment apps while casually browsing through the app stores. The survey also revealed that recommendations from the app stores influenced 34% respondents.
As user behaviour evolves, marketers are also on their toes to change their methods of marketing their apps. It is pivotal on their part to understand the market thoroughly and approach users accordingly. This doesn’t rule out advertisements altogether! Ads are still touted as an effective method to inform users about an app.
Price and Privacy are the Most Important Deciding Factors
Interestingly, app users in the U.S. seem to be extremely price sensitive and highly concerned about the security. 85% respondents agreed of considering the price before deciding whether to download an app or not. Another 84% were more concerned with the privacy and security. This group were mostly dealing with payment apps, wallets, and other apps that involve transactions. 71% users decide based on their requirements and how often they might want to use that app. Surprisingly, around 71% agreed of downloading an app based on the app description alone.
The app developers need to ensure that an app is safe and secure to use and it doesn’t affect the user’s data or privacy, no-matter-what! Even the marketers need to ensure that they convey the most about the app in a very effective manner, which can attract the users to download it. The pricing should be justified and made worth downloading the app.
User Engagement and App Retention
The most challenging part about an app is to engage the users and retain them as the app retention rate in U.S. is only 42%. It means, more than half of acquired users turn the back to downloaded apps after some time.
Users stop using an app either for some personal reasons or due to app-related issues. The top three reasons under personal reasons are:
- Uselessness – 55%
- Phone memory clearance – 53%
- Not matching expectations – 50%
On the other hand, the top three reasons of app-related issues are
- Bigger file size – 46%
- Technical problems – 39%
- Too many ads – 32%
There are several ways in which engagement and retention can be controlled. Push notifications are one the most effective ways to control this. 85% of the respondents said that they find push notifications useful, especially when they are tracking a purchased product (42%), reminders (35%), discount or offers (35%) and so many other information of similar nature. According to a report by Localytics, push notifications improve user retention by 56%. It helps in interacting with the user and enhances the overall value of an app.
Moreover, 91% of the respondents admitted that they would consider using the app again if the is an improvement in the quality and the size is trimmed down.
Actionable Insights
- Since 61% of the users value apps that are easy to use and navigate, developers must ensure that the user-interface is very simple but attractive.
- 29% mostly use apps that can be personalised to give the best experience. Therefore, app developers need to make personalised apps for the users to enhance their experience.
- Apps should add value or at least fulfil the expectations of a user in order to avoid uninstallation.
- An app should offer a wide range of features since 66% of the respondents said that they prefer such apps.
- An app should ensure data privacy and security.
- Marketers need to deliver the best about the app in the description sections and also via the advertisements.
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