Liftoff Q3 2015 Mobile App Engagement Index

Q3 2015

MOBILE APPENGAGEMENT INDEX

Liftoff Mobile App Engagement Index Q3 2015 2

Introduction

The Liftoff Q3 Mobile App Engagement Index measures the costs

associated with the actions marketers want their users to engage

in on their mobile apps. The Index tracks the costs of App Installs,

Registrations, Shares, Purchases, Subscriptions, and Reservations

and further breaks those costs per action (CPA) down across gender

and operating systems. It’s focused on five major non-gaming app

categories: Dating, eCommerce, Social, Travel, and Utility.

This Index gives mobile marketers a way to benchmark the

performance they’ve seen with their user acquisition channels

against what others in their app category are experiencing.

While Q2 saw the CPA decrease in most categories, the Q3

results were a bit rockier. In July, CPAs spiked across the board,

but so did install-to-action (ITA) rates, providing a silver lining

to mobile marketers. Following July, non-transactional events

decreased for the remainder of the quarter, closing with a lower

average than in Q2.

Among transactional events, only cost per first purchase finished

the quarter with a decreased average. Subscription and first

reservation prices increased significantly, and it’s expected they’ll

continue to do so during a competitive Q4.

The Index is based on an analysis of 45 million app installs and 1.1

billion post-install events, 60% of which are based in North America

and 40% in Asia, Europe, South America, and the Middle East.

Mobile AppEngagement Index


Highlights

Mobile advertisers spent an average of $9.46 to acquire

a new registered user, the lowest it’s been in 2015.

The cost per subscription rose 10.6% in Q3. Prior to the

third quarter, cost per subscription steadily decreased all

year.

Utility app marketers spent an average of $42.88 to

acquire a first-time purchase, up 19.5% from the end of Q2.

Travel app reservation costs increased significantly,

closing at $56.42 per reservation, a 24.6% increase from Q2.

iOS users are 68.1% more likely to make a first-time

purchase than Android users but the cost per first

purchase is even.

Males are much more likely to purchase from a finance

app. The acquisition costs to acquire female purchaser of a

finance app are 334% higher.

July is more expensive and effective for marketers. CPAs

increased across the board, but the rate at which users

converted rose by 58.4%.


Mobile Engagement Benchmarks

The app engagement index benchmarks the average cost

to acquire a new user from a paid app install campaign who

engages in a post-install event for the first time. The events

measured are registering, making a reservation, making a

purchase, subscribing to a paid service, and sharing content.

2015 has seen the cost per registration remain relatively

flat, while the cost per first share and purchase decreased

throughout the year. Cost for first time reservations continue

to rise incrementally, while subscription costs remain dynamic,

posting a 10.6% increase in Q3 after a 13.5% decrease over Q1

and Q2.

Mobile CPA benchmarks

are influenced by several

factors including volume of

users, app install campaign

targeting and optimization,

ad creatives, app store

rating and reviews, and the

in-app experience.

Register Share Reserve Purchase Subscribe

$9.46$16.01

$56.42$67.16

$193.61

Q3 2015 Mobile Cost per Action Index



Average Cost per Registration

The Registration Index measures the cost to acquire a mobile user

from a paid app install campaign who creates an account in an app.

Over the last year, costs haven’t fluctuated far from the mean in one

way or the other until hitting a high in July and settling into a year-

long low in September, likely due to Summer break-related device

inactivity.

Mobile Indexes

Register: A user installs an app and creates an account.

Average Cost per Registration

$9.98

$10.66

$9.25$9.09

$9.58 $9.60

$11.27

$9.46

$8.72

$9.43

$9.55

$10.43

$12

$10

$8Jul-15Jun-15May-15Apr-15Mar-15Feb-15Jan-15Dec-14Nov-14Oct-14 Aug-15 Sept-15


Average Cost per Share Index

The Sharing Index measures the cost to acquire a mobile user

that shares content for the first time, including a photo, video, or

message. As content sharing becomes a standard practice on

social apps, the cost per share has steadily decreased in 2015,

finishing September at $14.90, 35.55% less than in January.

Share: A user installs an app and shares content for the first time, including a photo, video, or message.

Average Cost per First Time Share

$30

$25

$20

$15

$10

$22.10

$25.46

$23.12

$23.12

$23.14

$24.30

$20.01

$18.54

$16.65

$18.07

$16.01 $14.90

Jul-15Jun-15May-15Apr-15Mar-15Feb-15Jan-15Dec-14Nov-14Oct-14 Aug-15 Sept-15


Average Cost per Reservation Index

The Reservation Index measures the cost to acquire a mobile user

who makes a reservation, such as a flight or hotel room. Influenced

by winter holiday travel shopping and increased ad spend, Q3 saw

a continued rise in average reservation costs, though September

CPAs fell to the same level we saw in June.

Reservation: A user installs an app and makes a reservation, including airlines, hotels, and taxis.

.

Average Cost per First Time Reservation

$60

$60

$40

$50

$30

$20

$37.13

$31.98$34.15

$37.05

$39.52

$43.85

$40.37

$45.27

$50.59

$61.09

$56.42

$51.09



Average Cost per Purchase Index

The Purchase Index measures the cost to acquire a mobile user

that makes a first purchase. Hitting a year-long low of $62 per

purchase in September, mobile marketers happily took advantage

of this reprieve in advance of Q4’s inevitable CPA increase.

Purchase: A user installs an app and makes a first purchase (not including in-app).

$101.23

$85.07

$104.45

$81.07

$87.25 $86.57

$84.18

$73.38

$66.89

$76.40

$67.16

$62.00

Average Cost per First Time Purchase

$100

$120

$80

$60Jul-15Jun-15May-15Apr-15Mar-15Feb-15Jan-15Dec-14Nov-14Oct-14 Aug-15 Sept-15


Average Cost per Subscription Index

The Subscription Index measures the cost to acquire a mobile user

who subscribes to a paid service, including dating and prosumer apps.

After enjoying a steady decrease in costs per subscription for a majority

of 2015, marketers saw huge spikes in July and September as mobile

activity dropped.

Subscribe: Subscribe: A user installs an app and subscribes to a paid service including dating apps, business apps, and other consumer-related apps.


Average Cost per Subscription

$200

$250

$150

$100

$229.94

$192.10

$215.09$207.37

$181.60

$211.60

$180.95

$164.09

$149.10

$193.61$197.92

$172.13


Engagement by Platform iOS vs. Android

Q3 perpetuated some long-standing mobile CPAs between iOS

and Android users, with notable differences in the costs of non-

transactional events. Android continued to deliver lower CPAs

on registrations and content sharing, whereas iOS generally

outperformed Android on transactional events, save for purchases.

Android closed the gap on cost per purchases in Q3, coming in at

$67 while iOS CPAs on purchases averaged $67.11. Both operating

systems posted significant CPA drops on purchases, but Android’s

decrease was much greater.

Subscription costs rose significantly for each operating system, but

iOS only holds a 6.2% lead on that CPA as Android has narrowed

the 12% gap it faced at the end of Q2. iOS distanced itself from

Android in mobile reservations yet again, as marketers paid 26%

more for reservations on Android devices in Q3.

The cost to acquire a registered user on Android was 44% less

than on iOS.

The cost to acquire a reservation on iOS was 21% less than on

Android.

21%

44%

Cost per First Time Engagement by Platform

Register Share Reseve Purchase Subscribe



Dating

In Q3, the install-to-register rate for new users of dating apps came in at 39.1%, a slight drop

compared to Q2. The install-to-subscribe rate dipped a bit as well, coming in at 1.3%. The

average cost-per-prescription was $193.61, as prices ranged from $100 - $500. After three

quarters of decreasing costs, cost-per-subscription prices jumped nearly $20, a result of

reduced app usage during the summer months.

Though registration rates between male and female users evened out around 39%, the

costs associated with user engagement by gender still differ greatly. Female subscribers

cost marketers $224.82 while male subscribers came in at a lower $185.32.

In Q2, male users converted to subscribers for only $152.77, suggesting that an increased

focus on advertising to males has begun to dilute the market.

Dating App Engagement Funnel

Engagement by App Category

Install to action (ITA) is the % of users who install an app and convert in a post-install event.

*

Dating App Engagement Funnel by Gender


Shopping App Engagement Funnel

eCommerce

In Q3, the install-to-registration rate for eCommerce apps was 64.2%, down 12% from

Q2. The install-to-purchase rate improved from 2.1% to 2.6% and the average cost to

acquire a first-time purchaser was $162.14, down from $210.78 in Q2. The CPA range

for an eCommerce purchase was $30 to $400. With the holiday season coming up,

marketers welcomed a lower CPA on purchases during the summer break.

Females still outperform men on each eCommerce metric, but when it comes to making

a purchase, males are only $5.15 more expensive. The gap is expected to further close

in the future as males have become more likely to make purchases via mobile.1

*

1

Install to action (ITA) is the % of users who install an app and convert in a post-install event.

Internet Retailer, Dec. 2014 https://www.internetretailer.com/2014/12/15/men-purchase-mobile-commerce-more-often-women

Shopping App Engagement Funnel by Gender


Finance

In Q3, the cost per install of financial apps (eg. financial protection, credit score

monitoring, investment advice) decreased by 4.6%. The install-to-registration rate for

new users of financial apps fell from 47.5% in Q2 to 42.44% and install-to-purchase rates

climbed a bit to 9.7%. The average cost per purchase decreased to $75.28 in Q3, with a

range of $50 to $400.

Mobile engagement behavior continues to be extremely different between genders in

financial apps. Females are 29% more expensive to acquire as registered mobile users.

The even bigger divide is the difference between cost per first purchase: It costs 4.3x

more to acquire a female purchase than a male. Marketers should continue to approach

the two groups separately with creative optimized for each distinct gender.

Finance App Engagement Funnel by Gender

Finance App Engagement Funnel

* Install to action (ITA) is the % of users who install an app and convert in a post-install event.


Social

In Q3, Social apps demonstrated incremental decreases in both CPI and registration

CPA, but a $2.19 increase in average cost per share. Install-to-registration rates are down

a couple percentage points from past quarters. The install-to-first-share rate fell 28.5%

in Q3, likely due to lessened mobile activity during summer, as well as Facebook’s

dominance of mobile users’ minutes.2

Acquiring a new social app user cost marketers $3.77, with a registration range of $3 to $6.

While male users were cheaper to acquire installs and registrations for, women were

much more likely engage with social apps. 98.8% of female users registered after

installing a social app, while 41.6% went on to share content within 30 days of installation.

Social App Engagement Funnel by Gender

Social App Engagement Funnel


TechCrunch, June 2015 http://techcrunch.com/2015/06/22/consumers-spend-85-of-time-on-smartphones-in-apps-but-only-5-apps-see-heavy-use/

2


Travel App Engagement Funnel by Gender

Travel App Engagement Funnel

Travel

Q3 saw little change in the CPI of travel apps at $5.75, nearly equal to Q2, while cost per

first time reservation increased 24.6% to $56.42 as travelers shopped around to find the

best deals on winter holiday airfares.3 Reservation CPAs ranged between $20 and $400.

Travel app marketers saw registration rates rise to 50.8% and cost per registration drop to

$11.32, but install-to-reservation rates fell to 10.2%.

Both CPIs and CPAs for registration remained consistent with the numbers seen in Q2,

but over the course of Q3, male reservations became cheaper to acquire than those

from females. Cost per reservations for males increased slightly to $54.93 while female

reservation costs jumped 46.3% to $57.91, leapfrogging male CPAs in the process.


Business Insider, August 2015 http://www.businessinsider.com/when-to-book-holiday-travel-2015-8

3


Utility

In Q3, the install-to-registration rate amongst utility apps continued its 2015 slide, falling

to 16.47% in Q3, down 18.1% from Q2. Install-to-first-purchase rates fell to 6% as the

average cost to acquire a first-time utility app purchase rose to $42.88, with a range of

$30 to $200.

As many utility apps don’t require registrations to be useful, it is not a huge surprise

that CPAs for registrations has gone up while registration rates have decreased. On

the other hand, utility app cost per purchase prices are nearly 4x less than those of

eCommerce apps at $42.88. Utility apps tend to deliver instant gratification, making it

easier for consumers to make purchasing decisions.

Utilities App Engagement Funnel by Gender

Utilities App Engagement Funnel



The Bottom Line

As predicted in the last App Engagement Index, CPAs fluctuated more this quarter than

those previous. Marketers can expect more change going into Q4, where growing mobile

marketing budgets and an increase in competition during the holidays will play a huge role

in successfully driving growth.

While gender differences will continue to influence the way marketers plan app-install

campaigns, the gap is closing in several industries. Dating apps see male and female users

register at nearly the same rate, while eCommerce and travel apps see a very narrow gap

between male and female purchase and reservation rates. Marketers have begun taking

advantage of the fact that males are becoming more willing to make purchases via mobile

devices.

Mobile operating systems are still a telling variable when it comes to user behavior, but

Android users have become much more likely to engage in transactional activities than in

previous reports. Now that purchase CPAs are lower on Android than iOS, marketers will

be paying close attention in Q4 to see if those costs hold, as well as whether or not the

historically cheaper Android app install and registration costs will rise.

Fueling Mobile Growth.

Liftoff is a full-service mobile app marketing and retargeting

platform which uses post-install data to run true CPA-

optimized mobile user acquisition and retention campaigns.

With Liftoff, campaigns are optimized to drive specific

actions beyond the install, to acquire users who engage

in more profitable post-install events like booking a hotel,

subscribing to a service or making a purchase.

[email protected] @liftoffmobilewww.liftoff.io

Documents

Liftoff Q3 2015 Mobile App Engagement Index