Comparing organic to paid: How acquisition channels performed in 2017
One of the few things we didn’t quite cover in our recent mobile benchmarks study was the difference in performance between users who installed from organic sources versus paid channels.
In terms of volume, we’d predict organic downloads to outperform paid. There’s only so much volume that paid advertising can deliver, and only so many users who interact with ads that lead to conversions. With organic, it’s only out of user interest - an almost unlimited resource - that apps are downloaded, and multi-channel efforts through improved word-of-mouth, influencer marketing and such all help lead to organic dominating an app’s overall UA picture.
However, we also believe that it’s becoming more difficult for app users to discover new applications. As the space becomes increasingly crowded, marketers would turn to paid increasingly in order to drive up visibility. In effect, we think that the app economy would see paid installs grow in 2017, particularly toward the end of the year.
But that’s not the full picture. Let’s analyze the distribution of app installs in 2017 and determine whether user behavior differs between those who came from an advertisement and from users who downloaded an app organically. It’s not just volume that drives value, but also how an app user behaves over time, and if they manage to stick around at all – so we’ll also look at retention rates for each cohort and sessions on a per-user basis.
Did paid increase its share of installs in 2017?
In great news for app developers, the sheer number of organic and paid installs increased over the course of the year. While we might have expect paid growth to be static, the opposite is true:
In fact, throughout 2017, the number of paid installs grew hugely from the start of the year to the end - by almost 80%. There’s been an 11% increase in the ratio of paid/free installs, meaning paid apps are taking a much larger portion of overall installs than ever before.
So, what’s the basic takeaway? Well, we’ve seen that share of non-organic installs grew hugely in 2017, by 11% from the beginning of the year to the end. That’s a sizeable chunk that’s been taken away from organic dominance (though their installs grew as well).
There could be a number of reasons behind this behavior, though it’s likely due to how much more difficult app discovery has become. With two million new apps released in 2017, it’s hard for an app to be found, let alone installed. And that’s why we’re seeing more apps investing in advertising spend for acquisition, as well as more downloads from paid sources.
Beyond discovery, advertisers could just be that much better at advertising itself - improved creatives, better targeting and ultimately better apps could be driving more downloads regardless of source.
But that’s just half the story - it’s increasingly important to get to know users beyond the install, and to see how they perform once an app has been downloaded. So let’s first look at retention, then sessions, and see how differently users behave, depending on the channel of origin.
Retention: Which channel keeps users around the longest?
Retention gauges a user’s app interest by monitoring the point at which a user drops off over a certain period - in this case, 30 days. We’d expect organic users to stay longer because they installed apps based on self-interest and not because of enticing advertisements. So, how do users from either channel do?
In 2017, organic users retained better, and the effect was more pronounced over the length of the cohort. On the first day after install, the three channels sit within a 3% difference of each other. By day seven, the gap widens to 4% difference in retention, meaning there are 4% fewer users from paid users staying around than from organic downloads. This gap remains consistent for the lifetime of the cohort.
Sessions: Organic remains on top
Now, it’s time to talk about sessions. Adjust defines a session as a span of activity separated by 30 minutes (minimum) to the next. This is mainly because apps don’t necessarily close at the end of each session - instead, they tend to remain hidden in the background, but still active. As such, we look at activity (such as a new event triggered), instead of opens and closes.
Sessions perform similarly to retention in the distribution between channels - organic users have 12% more active sessions on day-after-install than those from paid. This figure of around 12% remains relatively consistent over the 30 day period. In real terms, this is about .25 more sessions over the lifetime of our cohort.
Ultimately, organic users are more engaged with their apps than paid counterparts. That’s to be expected, but the fact doesn’t rule out paying for users.
The differences in use are slight, and mobile acquisition strategy in 2018 requires a clever mix of paid, retargeting, and well-executed ASO. There’s no doubt that the number of apps in the world will continue to grow, making discovery that much harder. Therefore, using a broad range of acquisition channels effectively will be the main challenge for app marketers in 2018, and beyond.
If you want to get an edge on the competition, and better understand how the mobile marketplace looked in 2017, download Adjust’s mobile benchmarks today to view mobile app performance from a variety of verticals, countries and OSs. The report goes in-depth to help contextualize what’s happening in the market and provides a wealth of data to back up our discoveries.