Justin Sullivan / Staff via Getty Images
By Aaron Baar
Source: www.marketingdive.com, December 2022

Dive Brief: 

  • Total app installs grew 10% year-over-year in 2022, according to an AppsFlyer report shared with Marketing Dive. This year’s growth represents a slowdown from a COVID-driven digital surge, which saw 35% YoY install growth in 2020.
  • Despite a 5% YoY decline of user acquisition spend, marketers globally spent $80 billion on the effort this year. The total represents a slight drop following a 40% spending surge in 2021.
  • By segment, spend for gaming apps was highest, totaling $27 billion, followed by finance at $8.5 billion, casino real money apps at $5.2 billion and shopping at $3.4 billion, all excluding China.

Dive Insight:

Launched in 2007, the iPhone is a teenager now, and the overall smartphone marketplace is beginning to show signs of age. The modest growth in app downloads follows a jump during the height of the pandemic, with the current rate reflective of the space’s maturation, coupled with recession fears, changes to Apple’s privacy policy and a broader digital retraction.

After dropping precipitously in 2021 as app developers adjusted to Apple’s App Tracing Transparency (ATT) framework, iOS installs grew 16% this year. The ATT framework, however, has hit one of the most profitable and largest categories — gaming — the hardest. After dropping 10% year-over-year in 2021, gaming installations bounced back in 2022, rising 4%.

On the other side, Android installs grew 9% year-over-year, thanks in large part to the platform’s growth in India and developing markets. India’s 18% surge in downloads, however, was offset by a download decline of 18% in Russia, a result of the war in Ukraine.

The challenges in tracking and remarketing in iOS have also led to a surge in owned media marketing from app developers. Consumer messaging, such as push notifications, email and in-app messaging, has jumped 45% on Apple’s platform since April compared to only a 17% gain in those tactics on Android. It helps that owned media is a low-cost channel for developers to build a brand image, AppsFlyer explained.

Meanwhile, ID matching rates increased 10% as app marketers discover that having users provide consent to advertising and tracking delivers a better overall ad experience. This year’s 26% IDFA, however, is down significantly from the pre-ATT days, when ID matching rates were above 80%.

At the same time, many users may be seeing more irrelevant ads. Social networks like Instagram, YouTube and TikTok have introduced new ad units across their inventory. The increasing ad load is leading to more irrelevant ads per user and will eventually impact the overall user experience, according to AppsFlyer.

The ATT is also affecting revenues from in-app purchases (IAP), particularly for gaming apps. Gaming apps saw a 16% drop in IAP, largely because they are more affected by privacy restrictions. Non-gaming apps saw a 20% jump in IAP revenue.