App Marketing Report for Subscription Apps

AppsFlyer, in partnership with Liftoff, has released The State of App Marketing for Subscription Apps, an in-depth report containing key insights that detail consumer trends and help marketers understand how subscription apps navigate the age of digital privacy.

As subscription-based apps grow year-on-year (YoY), reflecting changing consumer behavior, apps in several categories have started to adopt the subscription model. While gaming apps account for nearly 11% of all subscription apps, it’s non-gaming apps (health and fitness, photography, and entertainment) that make up the lion’s share of apps that offer a subscription.

The growth is also positive for app developers. Subscription monetization strategies are predictable, easy to test, and therefore have the potential to be more profitable. Additionally, subscription apps in app stores receive a higher share of subscription fee revenue compared to non-subscription apps, with developers receiving 70% of subscription revenue, which rises to 85% after a year.

Global trends in the State of App Marketing for Subscription Apps report include:

Gaming app installs drop 18% after ATT from August 2021 to March 2022, but non-gaming iOS app installs have jumped 25% since November 2021. Although gaming apps are well-known leaders in mobile advertising thanks to their mastery of data, the publication – The reality of Apple’s iOS App Tracking Transparency (ATT) data has proven difficult due to their reliance on user-level data . Gaming apps that offer subscriptions saw a steep 18% drop in iOS installs, with Android dropping 8%. Non-gaming apps, however, saw a 13% year-over-year increase in total installs in January 2022.
Demand for streaming entertainment apps jumped 13% year-over-year in iOS app installs, excluding North America. Apple’s penetration into new and emerging markets played a role in this growth, with installs increasing 113% in LATAM and 47% in the Indian subcontinent. However, North America strayed from the trend with installs down 15% on Android and 17% on iOS, perhaps indicating that users have too many choices and are faced with a set of highly fragmented services, some of which may be abandoned in the event of an economic downturn.

Remarketing conversion for entertainment streaming apps increased 2x on Android. Remarketing is a relatively cost-effective solution for closing high-value subscriptions. However, due to much less user-level data due to Apple’s ATT framework, remarketing on iOS has become a challenge. This has led to an increase in remarketing activity on Android.

Gaming apps got the highest ATT activation rates

2.1% of users who install non-gaming apps that offer subscriptions subscribe within 30 days of installation, compared to gaming apps that only convert at 0.2%. In non-gaming applications, content subscription has become practically mainstream, whereas, in gaming, it is only a very small group of users who spend lavishly on gaming applications. Securing the conversions of these players can be extremely valuable for gaming apps.
Subscriptions drive 82% of revenue generated on average for non-gaming subscription apps, unlike games where only 36% of revenue comes from subscriptions. In terms of subscription revenue, despite a very low share of payers, 36% of revenue comes from subscriptions to gaming apps that offer this pricing model. Subscriptions to non-gaming content are well established and are usually the main, if not the only, source of revenue for non-gaming subscription apps.

Gaming apps had the highest ATT activation rates, at 54%. North American users are 32% more likely to opt for gaming apps compared to non-gaming apps, but it was non-gaming apps that showed greater variance, with activation rates as low as 36% in Eastern Europe and as high as 54% in Latin America.

“While app marketers are drawn to adopting a subscription pricing model because it allows them to better predict future revenue and enjoy a recurring revenue stream, in reality, it It’s critical to understand that offering a subscription model is a major commitment. Subscription apps thrive when they provide ongoing value and content and build personal relationships with their users. If an app can’t delivering on its promise of delivering ongoing value and content, the subscription model won’t work,” said Shani Rosenfelder, Head of Content & Mobile Insights, AppsFlyer.

“Subscription app marketers need to focus on long-term retention, given how difficult it is to acquire new subscribers. It’s best to start by optimizing UA campaigns for sign-up events and subscription, followed by re-engagement campaigns on Android, which can be incredibly effective,” said Dennis Mink, SVP Marketing, Liftoff.