State of App Marketing in IndiaMarch 2018

- India is a booming app economy, and has just surpassed the US to become the #1 country in the world in the number of non-organic installs.

- The share of non-organic installs in the app install pie has grown significantly -- 30% year-over-year. Low price of media (about 30 cents for an install) and an increase in the share of non-Indian apps running campaigns in India is likely the reason behind this jump. Organic app discovery is largely broken with a 10% drop in the share of the app install pie.

- Because of limited storage space in the Android-dominated market, the country suffers from a high uninstall rate: about 32% of installed apps are deleted within 30 days. Retention is also a challenge with only about 5% of users active 30 days after installing an app.

- Low engagement rate and high uninstall rate are driving marketers to invest 70% more in retargeting campaign in an attempt to improve these KPIs.

- The share of buying users is relatively high in India with 7% of installers making in-app purchases within 30 days.

- App Install Fraud is on the rise in India, up 85% since Jan. 2017. It is still lower than the global average because of low payout in the country, but with scale and the desire to match advertiser expectations, more fraudsters are polluting data in this region.

Key Findings - Executive Summary

Data Study Highlights

1+ Billionapp installs

4 Billionapp opens

950apps

$400Min-app revenue

40 Millionretargeting conversions

Data was pulled across different time frames from January 2017 to January 2018 (inclusive)

A View from Above

27%of households (66 million) make up

‘consumption class’ vs. only 7% ten years ago

39Msmartphones shipped in India during Q32017,

up 40% vs. Q2 and 20% year-over-year

Sources: Kalaari Capital, NCAER, IDC

Accelerated growth of the

‘consumption class’ in India means

that a significantly higher number

of people can afford to buy

relatively costly new smartphones..

Booming App Economy

Source:s: App Annie, AppsFlyer

3x increase in the average number of installs per app (Jan. 2017 vs. Jan. 2018)

country in monthly average number of apps installed

and used (40+)

#1country in minutes per day spent in apps (~170)

#6Booming App Economy

App usage in India has grown

dramatically since September

2016 when Jio introduced

subsidised, unlimited 4G access.

This move has made the cost of

app data affordable for the

majority of the population.

INDIA: OUR NEW GLOBAL LEADER!

In January-February of 2018, India

overtook the US as the country

with the highest number of

non-organic installs, as measured

by AppsFlyer.

The growth rate is impressive. In

the same time period in 2017, the

US was ahead of India by 26% in

the overall non-organic install

count.

Booming App Economy

Non-Organic Installs

Organic Installs

Source: AppsFlyer

drop in share for Indian Apps

-18%

Share of Top 200 Apps By Location of Company HQ

India is top of mind for non-Indian

apps, especially Chinese ones, with

more Chinese owned apps among

the top 200 than Indian ones, as

recorded in January of this year.

Overall, the share of Indian apps in

the pie is shrinking, while the share

of Chinese apps is up 7% and the

share of other non-Indian apps has

increased by almost 30%.

India Increasingly Attractive to Non-Indian Apps

January 2017 January 2018

The Rise of Non-Organic

IncreasinglyAttractive to Non-IndianApps, Especially eCommerce

Whereas the share of Indian apps

has risen year-over-year in the

entertainment category, we can

see that Indian-owned

eCommerce apps face more

competition coming from outside

the country.

Overall, the share of non-Indian

apps is rapidly growing in this

category with a +84% jump in

shopping and a +45% rise in travel.

Source: AppsFlyer

Share of Top 200 Apps Per Vertical By Location of Company HQ

Source: eMarketer

The app boom in India is quickly

translating into significant growth

of mobile ad budgets.

Whereas desktop ad spend is

down, mobile is shooting upwards

with the tipping point predicted

to take place this year, when

mobile will exceed desktop by

nearly 3% to eclipse $800 million

in total spend.

Mobile vs. Desktop Spend: Opposite Trends

Source: eMarketer

In-App vs. Mobile Web Impressions Share (India, H1, 2017)In-App DominatesMobile Web

The share of impressions delivered

in apps is well ahead of the mobile

web. Users in India are completely

focused on apps as we’ve

established in slide 5.

Clearly, the division between

mobile environments as it applies

to ads follow this trend.

Source: AppsFlyer

YoY Change in App Installs By Type

+30%

-9%Share ofNon-OrganicInstalls Growing Rapidly

Broken organic app discovery has

led apps to invest in marketing. This

gives them more control and ability

to scale. By relying on data,

marketers can ensure their

investment is worthwhile.

The non-organic rise in India is

significant when compared to the

global average, which grew by 20%.

Marketing budgets in top verticals

have grown significantly YoY,

climbing at a rate that is about 50%

higher than the country average.

Affordable data means video

streaming via entertainment apps

opens up to a massive audience.

eCommerce has also become

accessible to a sizable amount of

the population, which now has

both more money to spend and the

means to spend it.

App marketers in these verticals are

not blind to this growing demand

and have become increasingly

aggressive in their UA efforts.

Source: AppsFlyer

Growth of Non-Organic Installs (Average Per App)

2.3x2.3x

2.3x

Key VerticalGrowth

Source: AppsFlyer

Cost Per Install Over Time (INR)

Low Price of Media Drive Demand

When the price of media is as low

as it is in India (about 30 cents vs.

a global average of roughly 1.8

USD), marketers can afford to be

aggressive. This is particularly true

for non-Indian apps that allocate

budgets across multiple regions.

For them, India is a bargain.

App Engagement

The app space has become

insanely competitive in recent

years. The choice is all but endless

and as a result users jump from

one app to the next in no time.

Long term app usage is therefore

a daunting task.

Apps Face Uphill Battle with Engagement

2.8 and 2.2 millionApps in App Storeand Google Play → Countless alternativesto your app

Super high user expectations → Apps that don’t rapidly deliver onall fronts won’t get used

Average device hasdozens of apps;time spentdominated by few→ Fighting for crumbs

Source: AppsFlyer

Non-Gaming App Retention Rates By Type

Retention isa Significant Pain

The data shows that 30 days after installing an app, only a handful of non-organic users in India remain active in that app. Three months in, across an entire week, the rate is just over 5%.

The challenge with low retention rates is that it is the basis of monetization. When is it not optimized, apps suffer sub-par LTV.

Retention can be significantly improved by diving deep into the data with retention reports, cohort analysis and granular in-app measurement for optimized re-engagement campaigns.

Source: AppsFlyer

App Retention Rates By Type - Shopping

Source: AppsFlyer

App Retention Rates By Type - Travel

Source: AppsFlyer

App Retention Rates By Type - Entertainment

Source: AppsFlyer

30-Day Uninstall Rate

Uninstalls Are a Major Threat

The average storage space of a smartphone in India is significantly lower than other markets, particularly Western ones, according to market research firm Counterpoint Research. This fact forces Indian users to delete apps at a much higher rate to free up space on their phones.

A vertical comparison shows that the gap between organic and non-organic is insignificant; the gap in entertainment, however, certainly is (more than 2x higher rate in non-organic).

32%

Source: AppsFlyer

Growth* in Number of Retargeting Conversions

* Among apps with a minimum 10% growth rate; same app comparison

+69%

+77%

Doubling Down On Re-EngagementTo Boost Engagement

The challenge of low engagement

and high uninstall rates is a major

pain for apps in India, as

demonstrated.

Therefore marketers are

increasingly looking to maximize

the value of existing users (whether

they’ve uninstalled the app or not).

A proven method for this is

retargeting, which can be very

effective in its ability to reach a

known audience with relevant

direct response messaging.

70%

Revenue

Source: AppsFlyer

Share of Buying Users (After 30 Days)India Boasts High In-App Buyer Rate

Indian consumers have a relatively

high in-app buying rate compared

to the global average, especially in

shopping apps. This makes sense

considering India is a mobile-first

and sometimes mobile only

country that is very app centric.

7%

Source: AppsFlyer

90-Day Average Revenue Per User (INR)

The average Indian app user makes

in-app purchases valued at $5.5

over a 90-day period. When

examining the top verticals, there is

a significant gap between

entertainment and eCommerce

apps.

* Sample size was insufficient for

non-organic data in the

entertainment vertical

User Spend

367

Source: AppsFlyer

Install to First Purchase in Days - Shopping (Cumulative)

Consumers Buy Fast

About 1 in every 2 who make in-app purchases in shopping apps make their first purchase within the first day after downloading an app. Within two weeks, almost all buying users make their first purchase.

Interestingly, more non-organic shoppers who go on to make in-app purchases do so within the first 14 days, compared to organic users.

For marketers this means being extra aggressive in the early stages.

Travel apps in India offer users the

ability to book not only flights and

hotels, but also bus and train

tickets. Whereas the former take

longer, the latter is usually

immediate, which explains the

high rate on Day 1.

Source: AppsFlyer

Install to First Purchase in Days - Travel (Cumulative)Travel App Funnel Mixes Short and Long Term Bookings

Source: AppsFlyer

Install to First Purchase in Days - Entertainment (Cumulative)Entertainment buyers engage quickly

Users who make in-app purchases

in entertainment apps do so

quicker than any other vertical

examined. Over 70% within day 1

and no less than 94% within 14

days.

* Sample size was insufficient for

non-organic data in this vertical

Organic & Non-Organic = Complimenting Each Other

Source: AppsFlyer

The Organic Multiplier (Global Estimation)Organic App Discover Largely Broken

The organic multiplier -- the ratio

between 1 paid install and the

number of organic installs in the

same time frame -- has decreased

significantly in the last couple of

years.

This should not come as a surprise

considering the millions of apps in

the app stores. The chances of a

single app to attract a user’s

attention resemble the odds of

winning the lottery.

1 Non-OrganicInstall

OrganicInstalls

2014

1 Non-OrganicInstall

OrganicInstalls

2017

Source: AppsFlyer

of apps targeting Indian users have more non-organic installs,

up 20% year-over-year*

41%

* Among apps that have both organic and non-organics

When Non-Organic > Organic

Broken organic app discovery is

leading apps to increase their

investment in user acquisition,

with an increasingly higher

number of apps having more

non-organic installs than organic

ones.

Source: AppsFlyer

Organic Non-Organic

Quality V V V (with smart use of data!)

Quantity X V V

Control X V V

The Power Combo: Organic & Non-Organic

Organic and non-organic installs complement each other, as both are required for success.

Organic users deliver superior quality and help reduce overall eCPI. However, because of the organic decline, the ability of most apps to control their scale with organic installs is limited compared to non-organic installs.

With non-organics, marketers have more control and as such can scale. With the right use of data they can also make their investment worthwhile by delivering quality users.

Mobile Ad Fraud

Source: AppsFlyer

App Install Fraud Rate Trend

+85% higher fraud in

Jan 17/May vs. Sep/Jan 18

Fraud Rising

The rate of app install fraud

targeting campaigns in India is

increasing at an alarming rate.

On the one hand, fraud in India is

about 25% lower than the global

average, largely due to low

payouts making region less

attractive for fraudsters.

On the other hand, fraud also has

to match advertiser expectations

and if so much activity is taking

place in india, fraud has to match

that pattern else it can raise

alarms.

Source: AppsFlyer

App Install Fraud Distribution by Type (Jan. 2018)

Install Hijacking Top Threat

App install in India is driven

mainly by install hijacking. But

this can easily change as the next

page shows.

Source: AppsFlyer

App Install Fraud Trendy by Type

Fraud is Dynamic

The data shows that fraud is very

dynamic, especially DeviceID

Reset Fraud. Install hijacking

also has some variance with a

45% increase between Jan. 17

and Jan. 18.

As such, advertisers need to be

constantly monitoring fraud

rates.

Source: AppsFlyer

Non-Gaming / Android / Power Ranking

1. While Taskbucks have fallen in overall volume, they stack up at No. 4 on Power Ranking. This is a great achievement for an incentivised app platform.

2. Twitter has dropped in power rankings likely due to their dip in overall volume as compared to H1-2017. Twitter has just signed-up Httpool as their official re-seller in India to ramp-up volumes.

3. AppLovin continues to grow phenomenally in India thanks to their focus in the region, their engaging Ad Units and predictive insights that target / re-target relevant users.

Insights

Source: AppsFlyer

Non-Gaming / Android / Volume Ranking

1. SVG Media are the latest

entrant in this list after the

Dentsu acquisition earlier in 2017.

2. Appnext makes its first

appearance in this report after

Airpush shutting their India

operations and the entire team

moving to Appnext to scale India

ops.

Insights

About AppsFlyer

AppsFlyer’s technology is found on 98 percent of the world’s smartphones, making it the global leader in mobile attribution and marketing analytics. Data-driven marketers rely on AppsFlyer for independent measurement solutions and innovative tools to grow and protect their mobile business.

Official partners with Facebook, Google, Twitter, Pinterest, and Snap Inc., and Tencent, AppsFlyer empowers app marketers and developers like HBO, Playtika, Waze, Alibaba, Skyscanner, Activision to maximize the return on their marketing investments.

To learn more, visit www.appsflyer.com.

For more data studies and resource for mobile marketers, go to www.appsflyer.com/library

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