Shortly after the news that 2022 saw mobile gaming revenue decline broke, we now see that the larger app economy is experiencing a similar slowdown.
As TechCrunch reports, “An annual review of the app economy by mobile analytics firm data.ai (previously App Annie) found that consumer spending on mobile apps declined for the first time in 2022 after seeing 19% year-over-year growth the year prior.” While some numbers are trending down, others are growing, making this an interesting puzzle to solve:
- Consumer spending dropped by 2% in 2022 to $167 billion
- Downloads grew by 11% year-over-year to 255 billion
- Hours spent in Android apps alone grew 9% to reach 4.1 trillion
As worries about the larger economic picture spur app consumers to tighten their spending, they have not actually abandoned their apps. Not only did downloads increase, but so has time spent in apps. The question is, as always, how to best monetize those users.
3 tips to grow your app even when times are tough in the app economy
Refocus on product and retention
We have all heard the stats around the costs of acquiring new users vs. investing in existing users. And it’s more important than ever that your existing users are getting value out of your app. Ask your product team to refocus on existing users’ UX and to address pain points or user requests. Meanwhile, the marketing team should be focused on re-engaging unengaged app users. From push notifications and in-app guides to content marketing, there are many strategies marketers can take to keep their users engaged and compel them to spend more money.
Reconsider your monetization mix
If your team has been focused on one monetization source, like subscriptions, it may be time to rethink your strategy. If you’re seeing attrition in your subscription revenue it’s time to find new ways to supplement that revenue. Perhaps a free (or less expensive), ad-supported option of your app is necessary. Digital Content Next reports, “Similarly, a Morning Consult study demonstrated users of all ages prefer ad-sponsored content that is free or lower cost to higher subscription costs — and Gen Z adults are the most cost-averse when it comes to monthly fees. Only 16% of Gen Z adults surveyed spend more than $30 a month on streaming services, compared to 31% of Millennials. These findings suggest ad-funded tiers could cut churn rates, as subscribers are unlikely to cancel a service with no monthly fee.” These preferences extend beyond streaming, so if your subscription-dependent app is starting to see revenue declines, it may be time to add another monetization method into the mix.
Explore new user acquisition channels
We all know that ATT has impacted apps’ ability to find and accurately attribute new users, especially regarding search and social. Google and Facebook have been the go-to networks for user acquisition marketers, but they have been deeply impacted by ATT. And GAID is still coming. If you haven’t already experimented with SKAN-friendly channels, it’s time. UA marketers should look outside of the duopoly to find new sources of users and revenue or risk falling behind the competition.
To get more in-depth tips on how to grow your app from some of the mobile industry’s most successful leaders, find an MGS event near you.