BIA’s Local Commerce Monitor reveals that 45.1 percent of SMBs use mobile apps. These SMBs rate this marketing channel highly in terms of ROI for their ad spend. Overall, about half (49 percent) rate their investments in mobile apps as returning as least 10x what they spend. Breaking this down further, about a quarter each say the ROI is 10-19x (24.3 percent) or 20x+ (24.7 percent).
Results like this help explain the high growth in mobile advertising targeting local audiences. BIA’s forecasts that fast growing spend in mobile targeting local audiences will reach $19 billion in 2018, making the #3 media platform for local advertising. Nearly half (49 percent) download at least one mobile app per month (Statista, June 2017). However, the churn rate is high. Localytics reports that, “Across all industries, 71 percent of app users churn within 90 days.” Media and entertainment apps actually are among the stickiest with a 24 percent retention rate past that 90 day mark. Localytics reports that while 50 percent of app users opt-out of push messaging, remarketing to app downloaders can be an effective means to reengage users.
We had the chance recently to sit down Alex Chemenda, CRO for Apps and U.S. Managing Director of Adikteev, a Paris-based firm that focuses on mobile app retargeting, among other services. Adikteev just raised $12M series B round in February 2018 largely for its U.S. launch. Chemenda reports the firm, launched in November 2012, has about 120 people and works with about 400 clients including top brands and holding companies. His New York-based office is looking to recruit a couple dozen people, largely in sales.
Chemenda says a key Adikteev strategy is to work with marketers to help increase app usage and revenue via retargeting mobile apps downloaders. He says larger advertisers often focus on Facebook for user acquisition. But for high scale advertisers who have essentially maxed out on using Facebook as an acquisition platform, mobile app user retargeting is an important new path to growth. Chemenda reports Adikteev’s clients can see a 100 percent ROI on spend within 7 days. the increase in Lifetime Value (LTV) is often in the 50-100 percent range, making this a highly effective marketing tool.
Adikteev gets about 20 percent of its revenue from the U.S. but looks to at least double this by the end of the year. With competitors like Criteo and Remerge, Adikteev has its work cut out. But Chemanda expects their mix of expertise in data science, creative strategies, and technology will position to be strong competitors. About half the company’s headcount now comprises data scientists and engineers.
Circling back to app downloaders and retargeting those who have churned can be a promising strategy for marketers seeking to reengage with strategic audience segments that have shown previous interest. And given the experience to date and expected high growth and ROI for mobile apps, it certainly makes sense to prioritize this marketing strategy when planning or reallocating marketing budgets.