Mobile App Marketing Predictions for 2017

By John Koetsier January 1, 2017

It’s that time of year. Time to look back at how mobile app marketing changed in 2016, and look ahead to what the future holds.

Mobile app marketing has changed in so many ways over the past 12 months. Some highlights:

  • Digital marketing and advertising spend continued to rocket upward as the great mobile app “land grab” continued.
  • Mobile app sectors like retail, travel and on-demand services gained real share in both downloads and media spending versus the long-dominant gaming category. But total gaming spend also grew very strongly as well.
  • “Brick and click” retail giants in North America and the EU responded to the growth of pure play retail apps by investing big in their applications, and in acquisitions.
  • In the developing world, install spending growth slowed as VCs and other investors demanded that their mobile app businesses start making more money.
  • Many marketers saw their KPIs shift from a focus on raw install counts to mobile app revenue and ROI. Plus, install fraud and other forms of mobile app fraud became front-burner issues across the industry.

While no one can predict everything that will happen next year, the following list of mobile app marketing predictions stands a good chance of coming true during the next 12 months.

Mobile App Marketing Prediction 1:

Post-Install Advertising Will Capture More than 20% of Mobile App Industry Marketing Budgets

While the mobile app space has grown at a remarkable pace, our industry still suffers from a massive user retention problem. The average mobile app loses the vast majority of its users in just a few weeks. In fact, a typical mobile app that acquires 100 installs on day one can expect to have only 5 DAUs by day 90, according to our analysis.

95% customer loss is a tragedy. What business can survive and thrive on 5% retention?

Fortunately, brands with iOS and Android apps are learning that post-install engagement advertising strongly increases user engagement. Across our footprint, which is composed primarily of enterprise-sized mobile app businesses, the percentage of paid marketing events focused on re-engagement has skyrocketed 1500% in just the past two years.

Post-install marketing’s share of total paid events across ALL mobile apps is likely lower, as the largest category players tend to innovate more quickly than do smaller app publishers. But in a recent survey we conducted among mobile app marketers around the world, 58% said that they had tested or implemented re-engagement marketing, and another 28% said they would in the next year.

Mobile App Marketing Prediction 2:

Brands with Large, Established Install Bases Will Radically Increase Their Post-Install Marketing Spending

Related to the prediction above, we expect that large app brands – ones with large install bases already in place – will funnel a far larger percentage of their ad spend into post-install marketing by the end of 2017. Most such businesses have already made huge investments in driving installs, but now their plan objectives will emphasize revenue and ROI, rather than vanity metrics. Those brands will focus on retaining and monetizing users in a more robust set of ways. Specifically, enterprise mobile app marketers will implement post-install re-engagement programs for:

  • New user activation: Advertising to get new installers to relaunch the app. For example, a media marketing property delivering ads to get a first-time viewer to return to the mobile app.
  • Converting cart abandons: Delivering ads to bring users back to buy. For example, a retail app messaging cart abandoners to complete their transactions before they buy somewhere else.
  • Driving reinstalls: Getting people who have uninstalled an app from their mobile devices to download it again. For example, a mobile travel app driving former users to reinstall when they need to book new travel plans.
  • Reactivating lapsed users: Driving people who have not launched an app in n days to return. For example, a mobile game developer messaging past users to relaunch.
  • Cross-sell/upsell: Stimulating incremental purchases from existing users. For example, a retail mobile app targeting its heaviest users with customized messaging.
  • Re-engagement display and video ads work so well in part because they can reach everyone, not just those that opt-in to CRM programs like push or email. Naturally, the specific post-install marketing audience within each of the above use cases varies. For mobile game marketing, one popular use case is targeting past purchasers of IAPs, to get them to make an incremental transaction. By contrast, a marketing campaign for lapsed users of a travel app would leverage a dynamic audience of Android and iOS app users that have not launched the app in n days.

Net, from mobile game developers to the leaders of app-based retail channels, post-install marketing is a big focus.

Expect big brands to rely on post-install display and video advertising as primary tools to drive rich user engagement, transactions and revenue. They will play a central role in 2017 marketing strategy.

Mobile App Marketing Prediction 3:

Lots More Companies Will Deploy Mobile Marketing Automation Platforms

The mobile marketing automation sector has increased penetration in 2016, and we expect that trend to continue in 2017. That’s because messaging to your existing installs and app users can help drive significant boosts in engagement.

Mobile marketing automation can help with the app user retention crisis we discussed in (1) above – at least among those users that opt-in to receive emails and push messages. Data from Localytics show that use of push notification messages results in 171% more app launches than when users don’t receive push messages. And over time, delivering push messages results in about 240% higher app retention rates over time. It’s all about delivering a more personal – and more welcome – user experience.

Post-install email marketing to users of Android and iOS apps also has positive and lasting effects on engagement and user longevity.

Any big brand that expects to drive revenue and cultivate long-term relationships will be getting on the automation bandwagon in 2017 – if they haven’t already.

Our recent survey of app marketers revealed that 23% of marketers expected to add an automation platform in the next 12 months. That represents 62% growth over 2016 penetration in our sample and is part of a long-term marketing trend toward personalized CRM.

Mobile App Marketing Prediction 4:

Opt-In Rates for Push Notifications Will Drop as Marketers Relentlessly Over-Message to Drive Re-Engagement

So, here’s the flip side of our last prediction. More brands are going to be delivering more push notification marketing messages to users. Some will do so prudently, with appropriate content and cadence. But many others will press the push notification “on button” too often, or deliver content that feels spammy to users.

In 2017, we predict that the rise in unwelcome push notifications and email activity will frustrate users. As a result, opt-in rates for push notifications will show significant declines. Over the past several years, average opt-in rates have been in a slow but steady fall, and we expect this trend to accelerate.

With lower opt-in rates, savvy marketers will need to pursue a COMBINATION of CRM and re-engagement advertising to engage all app users and customers. But this sort of double-barreled marketing strategy will likely pay strong revenue dividends.

Mobile App Marketing Prediction 5:

Marketers Will Start to Spend Big on App Retention/Rewards Programs

We’ve already discussed using ads and CRM to improve retention. But in 2017, we predict that many more marketers will incorporate tangible reward programs into their apps so that they can retain and monetize more users.
Several digital marketing startups focus on empowering app marketers to reward app usage. We expect more e major apps to incorporate these tactics into their core app user experience.

Rewards for engagement and retention come in multiple forms. Here are a few examples:

  • App-only discounts and offers that are only visible/available at the moment of app launch.
  • Escalating rewards and discounts for more frequent app launches and usage.
  • Hyper-location-based rewards revealed as users shop store aisles.

Mobile App Marketing Prediction 6:

Media Consolidation Will Continue at a Fast Clip. Top 20 Media Partners Will Capture 80+% of Total Category Dollars

The mobile app media market is very fragmented. Apsalar, for example, has more than 1,000 integrations with a broad range of app marketing vendors, from the top social and search communities to niche mobile ad networks.

Nevertheless, over the past year, we have seen significant media consolidation, with the leading players grabbing a larger and larger share of total install and remarketing spend. Earlier this year we conducted an analysis of our digital media footprint and discovered that the share of spend for the top ten vendors grew by almost 40% over the past 18 months. The share of the second ten largest grew by about 20%. All that growth came out of the hides of smaller players – especially those with an exclusive focus on incentivized inventory. To put it simply, digital marketers in the mobile app space want to hedge their bets with proven partners that deliver installs of the highest quality.

On our platform, we see the top 20 app media brands take about 70% of total paid installs in 2016. That figure will likely climb to over 80% in 2017.

Mobile App Marketing Prediction 7:

Optimizing to Conversions Versus to Install Counts Will Become the Category’s New Normal

Historically, app marketers and their media partners optimized media and marketing efforts to maximize install counts. But over the past 18 months, we’ve witnessed many marketers demand optimization to deeper conversion types.

This is all part of an uber-industry-trend toward “user quality” – recognizing that all users are not of the same value to a brand.

Given this, smart marketing maximizes attracting and retaining more of an app’s most profitable users. The user experience goal is refined to focus on the needs and wants of the most profitable app users.

In the mobile app marketer survey we conducted last summer, 78% said they were now more focused on user quality than they were a year before.

While it can be difficult to scale CPA media buys, many digital marketing leaders are keeping their CPI and CPC contracts but asking their partners to optimize media spend to maximize the number of deeper conversions. We expect more brands to pursue this “dual objective” strategy in the future.

Mobile App Marketing Prediction 8:

Around the World, Consolidation in the Retail App Space Will Accelerate

Credit a tightening of VC funding or a recognition that there may be too many pure play mcommerce startups in some categories. But these days, the biggest mobile app players are snapping up the mid-pack to grow scale and reduce competitive threats. The trend is most pronounced in India, where VCs who once cheered INSTALLS! INSTALL INSTALLS! are now asking for revenue in addition to install growth. Some examples:

  • India’s travel giant ibibo acquired bus booking service redBus.
  • India’s hotel booking app Oyo Rooms bought its competitor, Zo Rooms
  • India’s m-commerce leader Flipkart first acquired Letsbuy, then fashion retail apps Myntra and Jabong
  • But it’s not just an India phenomenon. Consider:
  • French retailer Vente Privee’s acquisition of a series of retail concerns, including Złote Wyprzedaże, Designers and Friends, Privalia and Vente Exclusive.
  • China’s Alibaba purchase of a controlling interest in Southeast Asia mcommerce leader Lazada
  • Rocket Internet’s acquisition of multiple food delivery companies including HelloFresh, Delivery Hero and Food Panda.

Expect this type of consolidation to continue throughout 2017.

Note: This blog post was published first on the Apsalar blog, prior to Apsalar’s merger with Singular. Learn more about our united company at

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