The app marketer's survival guide to navigating economic downturns
While the mobile app industry is showing very positive signals and trends in 2023, we are in a period of economic decline, and a potential recession is still looming. This has presented a daunting challenge for businesses, especially those still trying to establish themselves in the market. App marketing and developers have undoubtedly been impacted by the downturn as less money enters the economy for ad spend, and users are potentially less likely to spend as much as they did during more fruitful economic times, putting pressure on most apps’ monetization models, from subscriptions to in-app purchases, and more.
Thinking outside the box and developing innovative marketing strategies to pull through and flourish in this environment is crucial. This also means that mobile marketers are expected to lower budgets while still growing their apps and staying profitable. In this blog post, we first explore whether reducing campaign budget is the right choice. Then, we look into some key app marketing opportunities during an economic downturn, focusing on remarketing and retention strategies.
Should you maintain your marketing budget during an economic downturn?
While cutting marketing budgets might seem like an easy, quick way to plaster over a loss in revenue during, there are better long-term strategies to consider. In fact, businesses that make significant cuts to their marketing budgets during a recession often struggle to recover. On the other hand, companies that maintain or even increase their marketing spend are more likely to come out of times of economic difficulty stronger.
During the 2008 recession, for example, companies that maintained their marketing spend and invested in growth enjoyed a 17% compound growth rate, according to a comprehensive study of 3900 companies worldwide. Careful allocation of marketing budgets is vital. Using best-in-class tools and strategies to optimize investments is also critical.
Companies that re-allocate their marketing budgets to suit the new context tend to fare better than those that cut their investment. This means that app marketers must adapt to consumer behavior and industry trends to succeed during an economic slowdown, similar to the phenomenon the app industry experienced during the COVID-19 pandemic. Apps can increase brand awareness and market share at a time when others might be scaling back. This, in turn, can help reduce the recession's length and position businesses for long-term success.
How to grow your app during an economic slowdown
In times of economic uncertainty, creativity and strategic thinking is the crucial factor mobile marketers, particularly if their budgets must be limited. This is where retargeting and remarketing come in. By re-engaging users who already have the app installed, marketers can save money while still driving impressive results. And the numbers don't lie: retargeting can increase conversion rates by up to 150%. Plus, as ever, retention is key. A higher retention rate is better overall, but it also means that users who remain active longer provide more engagement and greater monetization opportunities.
So, how do you remarket your app during an economic slowdown? Check out the following strategies to take your remarketing efforts to the next level and unlock even more success:
Audience segmentation: Divide and conquer
A successful retargeting plan for an app begins with a robust audience segmentation strategy. RFM analysis is a valuable framework for segmenting users based on three significant in-app behaviors: recency, frequency, and monetary value. Begin by dividing the user base into big spenders, consistent purchasers, and highly-engaged users. Experiment with sub-segments by inactivity windows or purchase frequency. By prioritizing granular segmentation and personalization, you can target users most likely to convert and make additional purchases.
Increase user engagement with personalization
Personalized remarketing can be the secret weapon for your app's success, especially during tough economic times. By slicing your user base by demographic, lifetime value (LTV), and past app usage, you can deliver customized messages that cater to your users' specific needs and wants. You can send users a reminder to complete a purchase, an exclusive holiday deal that can only be redeemed in their area, or a special offer on items they've previously shown interest in. With fewer competitors' advertising, now is the perfect time to stand out with personalized messaging that keeps your users engaged and returning for more. Take the chance to boost your user loyalty during challenging times.
Boost retention rates with gamification
Who doesn't love a little bit of fun and excitement in their daily routine? Gamification elements can keep your users interested in your app and incentivize them to come back for more. You can create a personalized and enjoyable experience within your app by providing users with rewards, challenges, and incentives. This way, you can keep your existing user base engaged rather than solely focusing on acquiring new users. Leveraging gamification tactics can increase the likelihood of users sticking around and generating revenue through in-app purchases or engagement with in-app ads.
Unleash the power of loyalty and referral programs
During an economic downturn, you can maximize your remarketing efforts with loyalty and referral programs. Encouraging customers to leave reviews and offering referral incentives can help apps attract new users and build brand awareness. Making it easy for users to share content and links within the app can further promote it and increase engagement. These tactics ultimately lead to increased revenue. Building and maintaining a solid brand presence effectively increases trust with potential users, even when consumers hesitate to purchase from unfamiliar brands.
Stay competitive with innovative ad creatives and testing
In these challenging economic times, apps can maintain their competitive edge and drive better results by getting creative with their ad creatives and testing them out. To gain an advantage, advertisers who are the first to market with new ad formats or creative direction often see more conversions and a higher return on ad spend. Using innovative formats like hybrid and playable ads can help you stand out in a crowded market. However, don't stop there - keep a close eye on new ad formats adopted by industry pioneers and test them out yourself. Continually testing and optimizing each ad element helps ensure it is designed for high engagement, allowing you to be strategic with your ad spending.
Transforming economic challenges into growth opportunities
A recession can be a challenging time for app marketers but can also be an opportunity for growth and innovation. App marketers can maintain their position in the market and continue to drive impressive results by thinking creatively and adopting innovative solutions. You can build user loyalty and increase revenue by implementing strategies that focus on user retention and engagement, including personalization and gamification. Moreover, you can keep your messaging fresh and your campaigns effective by staying on top of industry trends and testing new ad formats. With the right approach, app marketers can survive and thrive during an economic downturn while positioning themselves on solid ground for more economically advantageous times.
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