It’s Time for Shopping Apps and Games to Double Down on User Acquisition

About 25% of the average American's waking hoursare spent on mobile apps, a statistic we know and love. These include messaging and social media apps, but gaming and shopping apps are starting to increase their share of the pie.

Mobile games are growing in popularity across demographics. If the Wordle sensationdidn't prove the ubiquity of the medium, the market stats, courtesy of Statista, speak for themselves:

• Mobile games are expected to generate $98.74 billion in revenue worldwide this year, and that number will be close to $119 billion by 2027.
• By 2027, the number of mobile game users worldwide is projected to hit 1.9 billion. (That's 23.3%-nearly a quarter of the global population.)
• These mobile gamers are not just 25-year-olds in Mom's basement, either: 55% of US adults play mobile games at least once weekly, and while the most hours are spent among 18- to 34-year-olds, adults between 35 and 54 are not far behind. (Statista)

The growth in mobile commerce is no less impressive. The pandemic fundamentally changed the way we shop: When stores closed, we went online. And, according to the World Economic Forum, we never looked back. In a PwC consumer insights poll conducted in June of 2023, half of respondents said they'd be increasing their online spending over the next six months, up seven percent from a poll taken six months earlier.

More and more, these e-commerce purchases are happening on mobile devices.

Mobile commerce accounts for a larger share of e-commerce every year and will comprise about 60% of all e-commerce revenue by 2028.

As mobile commerce grows, downloads for shopping apps are also on the rise. While Amazon has a significant head start in the US, China-based Temu and Shein don't seem daunted by competition. The two bargain-priced retailers began aggressively marketing their apps in the western hemisphere over the last few years and have gained a strong foothold, proving that Americans are increasingly comfortable with in-app purchases.

That said, Americans still lag behind most of the world in mobile shopping.

Source: Business of Apps

Traditional retailers may feel discouraged by the number of shoppers favoring pureplay e-commerce megastores, but their success is good news for the entire industry. While more Americans are downloading and making purchases via shopping apps, many are also embracing the trend toward conscious consumerism, opening the door for brick-and-mortar retailers with both an app and a local footprint. In a recent survey by Nielsen IQ, 78% of consumers stated that a sustainable lifestyle was important to them. McKinsey data supports that research, showing a boost in sales among retailers with ESG claims.

Given this surge in mobile gaming and shopping apps and with growth in both markets expected to continue, user acquisition professionals in both industries should be ready to amp up their marketing efforts.

Mobile gaming: Find your competitive edge

Gaming is a wildly competitive category that has, due to its accessibility, surpassed other forms of digital video games.

While the market has experienced ups and downs over the past few years, it is improving and stabilizing. Some industry experts believe this could be "The Year of Gaming"-ultimately, the year major advertisers begin seriously investing in mobile advertising, particularly in-game advertising. What seems likelier is that the industry will continue to experience steady, stable growth as brands start to recognize the benefits of in-app advertising.

Regardless of whether or not this is true, both shopping and gaming apps need to focus heavily on user acquisition to maximize growth and revenue.

User Acquisition Trends

There are several key trends in UA that can be successfully applied to both app categories.

• According to the 2024 Creative Trends report,playable ads are an effective way to engage users for both gaming and non-gaming apps.
• For gaming apps, these are a no-brainer-playable ads are a tried-and-true format for driving UA.
• Interestingly, the SparkLabs team saw a lot of success with stripped-down and even borrowed gaming mechanics. While these ads may have offered gameplay that differed from the app itself, the playable element still appealed to the same gamer motivation, ultimately driving engagement and meeting user expectations.
  • Non-gaming apps, including retail apps, were able to drive higher engagement rates with playable ads. While shopping apps obviously aren't games, one popular app invited users to create outfits within their ad. Another app created a Subway Surfer-type gaming experience that reflected the savings users could experience by downloading and using their app.

• All apps can benefit from adding CTV to their UA marketing mix.
  • Diversifying your media mix is important, but many marketers tend to depend on what they've always done, namely, social media, display, and search. As competition in these channels grows, becoming more costly and less effective, CTV is worthy of consideration.
  • More importantly, as the number of Americans streaming video on their mobile phones increases, UA marketers who leverage CTV are reaching audiences capable of downloading apps with a single tap - although nearly all TV viewers also have their mobile devices in hand.
• Trust a purpose-built, AI-powered platform for user acquisition marketing. Not all DSPs are created equal, and platforms that aren't designed for app marketing use different targeting criteria.
  • Yes, traditional DSPs rely on data for their powerful targeting, but UA platforms are different. Limited to app users, they look more closely at behavior than demographics.
  • In the case of AppDiscovery, which has global reach a of over 1.4 billion daily active users, AI-powered user targeting delivers high-quality users and helps discover new, incremental audiences to fuel further growth.

Understanding your target market based on a detailed analysis of your most profitable projected users is key, as is knowing the competition.

Second, apply your efforts to the channels and tactics that offer the greatest return. There's no point investing in a CPI campaign in the UK if your average user there has a lifetime value (LTV) that's a fraction of users elsewhere.

Finally, never forget that user acquisition is a process, not a task. You'll need to continually optimize your campaigns, test new channels, and experiment with new creatives.

And don't discount the power of creatives! Good ads are essential, especially in cases where you are running cost-per-install (CPI), cost-per-purchase (CPP), or cost-per-acquisition (CPA) campaigns. Making a strong impression with your ads is not only vital to good UA, but it also has a direct impact on your campaign ROI.

Both shopping and gaming are hyper-competitive app categories. To achieve and maintain success, it's important to focus on user acquisition tactics and tools that have been proven to engage audiences, earn trust, and drive optimal outcomes.

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