While the importance of user acquisition cannot be understated, a high churn rate can be detrimental to an apps success, so developers and publishers should give retention the attention it deserves and monitor rates to ensure that campaigns are on track.
The report states that day 14 retention rates fell 6.5 percent from Q3 2021 to Q3 2022 on Android devices, while day 30 retention rates fell 10.3 percent across the same period.
This drop is echoed across different app categories when considering a larger timeframe. Finance (-23 percent), Gaming (-20 percent) and shopping (-12 percent) all saw significant drops in retention rates in Q3 2022 compared to Q3 2020.
A part of this drop is due to the new privacy regulations, making it harder for app marketers to operate at full efficiency due to “the loss of user-level data and data signals beyond the first days of a campaign”.
In short, part of this drop can be attributed to the new privacy regulations, with marketers struggling to operate in the new landscape on Apple, and soon on Android. Marketers will need to take advantage of new methodologies to optimise acquisition campaigns and pinpoint the channels which drive user loyalty.
Japan saw the highest day 30 retention rates, at 5.1 percent, despite the fact that Japanese consumers have been slow to adapt to mobile technology. In contrast, developing countries such as China, Brazil, India, and Vietnam all saw retention rates below 2 percent, despite being mobile first markets. This suggests that the rapid growth of smartphone usage doesn’t translate to increased retention rates. On the contrary, they seem to be less engaged with their apps, quickly finding something new and moving on.
Owned media remarketing is on the rise, and projected to surge further in 2023. Such campaigns, including push notifications, email, and SMS, drove uplifts of over 100 percent in six categories including gaming, social, and music apps. Only one app category utilising owned media, medical, reported a decline in retention. Such marketing methods are cost-effective and reliable, however can be harder to effectively scale.
How can marketers improve retention rates?
The report offers several possible solutions to help improve retention rates.
A strong emphasis on first time user experience can help give consumers a positive view of an app, and drive ongoing loyalty. A seamless onboarding experience can also help engage users quickly and effectively, “moving the user from advertisement to install to conversion without friction.” Marketers should also embrace new measurement framework such as incrementality and cohort analysis to optimise their re-engagement strategies.
The report also stresses the potential of leveraging owned media sources. “Lifts in day 30 retention for apps that use owned media remarketing shows that there is untapped potential for the medium in the coming years.”
Last month, we spoke to AppsFlyer about how to improve user acquisition while maintaining transparency.