Retention rates: A deeper look at the benchmarks
In the wake of releasing our app benchmarking data of Q1 2016, we started thinking about user retention. Though one metric among many, app retention rates can provide some pretty special behavioural insights, not only about users, but also about marketers too.
On their own, rates of retention show us how many users re-use an app - it’s essentially the figure that tracks continued usage. If a user re-opens an app, then the retention rate stays the same. If a user doesn’t return, then the rate is lowered. It’s a pretty binary figure on a single user, but on thousands of tracked installs it can provide some interesting user trends. It’s the reasons behind the user behaviour that we want to understand better.
This report intends to delve into the current numbers, and compare behaviors from Q3 2015 to Q1 of 2016. We’ll look across categories and over iOS vs. Android performance in order to discover the differences and the motivations behind them. First, let’s find out which category, on which platform, performed better than anywhere else.
Which apps have the best retention?
Getting straight to business, what are the top performing categories? We’ve looked at the numbers and tabulated the results across 10 verticals, comparing median/Q2 results to find our top three performers. And now, here they are:
- Utilities on Android has the unique distinction of having the highest consistent retention out of all categories and OSs, appearing and alternating in the top two on day one, seven and 30.
- Finance & Business on iOS reaches the second highest retention of apps on the OS on day seven, and third highest on the final day. It’s only one of two to feature twice in the top three.
- Travel & Transport on iOS is the other category that features in the top three more than once (and maintains a high rate by the seventh day).
With that reveal, let’s take a look at the categories in a little more detail.
Utilities is Android’s top performer - but are native apps on iOS ‘good enough’?
Utilities apps (such as translation software, tools, and organisers) have been well-used by the Android crowd for some time. In 2015, retention was high, but much flatter, sitting at around 13 percent of retention from day five to day 21. In 2016, the curve is steeper, with a retention rate more than 5 percent higher than the previous year. By day 13, the two have reached parity, and from there 2015 remains on top.
While Utilities perform excellently on Android devices, the category doesn’t hold up on iPhones. By day seven both datasets dip below 10 percent of retention, and while 2016 downloads do start stronger, they follow the same trend as Android.
Why is there such a disparity of Utilities apps between OSs? Unfortunately, it’s hard to tell. While there are more apps in our study on Android, it’s also purely a fact of just how many we track, not how many are available to download. However, as we’ve found, verticals which appear more often per OS tend to do better, suggesting that app makers follow their audiences, not vice-versa.
A more likely reason could be due to the the number of native apps on iPhones themselves. Utilities on the platform could reduce the need for third party solutions by merely being ‘good enough’ for users who don’t seek sleeker solutions. Such a trend is seen with Apple Maps being used three times as often as the next competitor as of 2015. If it ain’t broke, so to speak.
Whatever the reason, iOS Utilities apps start with around 10 percent less retention on day one, but the fall in retention rates over time is slightly slower, with a division of 0.4 percent.
On the flipside, Android users needs Utilities apps, particularly as perhaps people using them might need them for work, not just casual use. As such, tools have a higher presence, and a consistent day-to-day number of sessions.
The New Year’s effect on Finance & Business
The first few days of a newly downloaded Finance & Business (or Finance) application are some of the most volatile of all, and positions switch frequently until about day 17, by which time clear trends emerge. adjust tracks quite a number of apps in the category, which include bookkeeping as well as stock market tracking, with more of our dataset appearing on iPhones.
Android retention rates on day one were exceedingly high, reaching over 35 percent - the third highest category on the day. However, by the 30th they were less popular than iOS equivalents, and well below 2015 results. It’s a remarkable start, as it outstrips its past performance by almost 10 percent, but also a fast fall. We’re not sure what’s changed in that time, but an obvious point would be to do with context. Although the data wasn’t drawn from January, a mixture of new phones, and new resolutions, could have resulted in higher downloads, and higher retention, of financial applications for those interested in either new technology, or prioritizing finance in 2016.
Yet Android isn’t the main success story here. Looking at iOS, the category begins with 26 percent of users returning. A good start, but not all that impressive by comparison. By day seven, and then later by 30, Finance retention has risen to the second highest then highest rate of all iOS applications in 2016. Though conjecture, it’s likely that an expensive product draws in a wealthier crowd, one that might use Finance apps more than other demographics of people, which could lead to a higher retention dropping in a shallower line.
At any rate, in the current market Finance applications are doing very well indeed.
Travel & Transport has become a roller coaster ride
Travel and Transport (or Travel) is a small surprise. The category includes timetables, accessibility information as well as travel services. Travel apps could be used either daily, weekly or monthly, and may not be as consistently used as other verticals. However, this behaviour shouldn’t affect the rate of retention because of the method we’ve used to collect it, but it’s important to note that the apps have a varied timeframe of use when compared to a lot of other categories in the market.
The most obvious point to remark on is that travel has improved on the previous year - iOS in particular saw big gains throughout the period.
If there’s one trend to really notice, is that apps retention peaks on days seven, 14 and 21. Before you think this means that people return on weekends, truthfully, that’s not the case. In fact, it brings into view marketer behaviour, and the impact on users, rather than trends in a week. Typically, these particular periods are used as milestones - as weeks from download. What could explain the growth trend beyond weekly re-visits is the idea that retargeting and advertising efforts increase around these periods by (some might say arbitrarily) increasing advertisement. What results is users being reminded to re-use their recently downloaded app, and doing so - which spikes retention to day three and nine levels - not too shabby, but not seen so much in other verticals. It seems Travel users are more susceptible to retargeting efforts, a fact that app makers and publishers know all too well.
It’s interesting to note the position swapping between the iOS and Android. Both retained well, keeping nearly a 6th of their users by day 30, and between 13-14 percent on day seven as of the median results. Whatever has happened to the category, users that do stray away from standard travel applications bundled on their phones seem to be sticking with their new found solutions in greater numbers.
Games at their best on day one
As the overall largest category on both platforms, there’s no way we can ignore games.
Games in general have a remarkably smooth curve, and only change positions once (Android has marginally outperformed itself in 2016 by day 30.) What we see from the smoothness of the curve vs. categories like Travel is that re-engagement campaigns aren’t clustered, but rather likely on-going, day-to-day, and multi-channel. As such, no clear trend emerges.
On performance, nothing beats 2015, a period which used to retain almost 40 percent of their users on the first day. In 2016 it’s around 25 percent retention. The drop-off over the period is much more rapid, settling at 6 percent of users by day 18.
The general rule is this: games on Android perform as well as they have historically, but on iOS there has been a large drop. Why? Market saturation, difficulty of app store navigation, or player fatigue could all be reasons why iOS games are getting a short shift, but it could also be performance or even memory based – as in there’s not enough space for games to fit on app-laden devices. Comparing the data versus time per session could provide more clues, but Games’ performance is tricky to explain for a multitude of factors. You can’t complete a Utilities app, for instance.
One interesting data point to note is that games come out second of all apps on iOS for retention on day one, so more than most return for a second round before calling it quits, by then it’s a race to completion, or distraction by the competition. Further to this, demographically, games are focused towards a younger crowd, so perhaps the shorter attention span may also belie this fact. Children may have dozens of apps to choose from, and want to play them all. So while we see a drop in retention, we’re fairly certain that there’s never been a better time to create new games.
If you’d like to know more about Games performance over time, we conducted a deep-dive on the vertical here.
So what does it all mean?
While most categories have high retention rates on day one, by day 30 the rates are, in general, lower than the previous year. This isn’t the case for all apps; in fact, results are pretty equal, though they do tip in the favour of Q3 by a sliver. Educational, Entertainment and Travel & Transport applications have improved, whereas Books & Magazines, Games and Social have had a weaker year.
When it comes to changes in 2016, the data seems to suggest that users are much savvier about what they like, and drop away faster if they’re using an app that they do not. This is particularly true of apps that provide information and learning. Meanwhile, apps that focus on entertainment (Games, Books & Magazines, Social & Communications, though not Entertainment itself) fall off quicker by comparison. This could indicate a myriad of things, from strong competition to user fatigue, but it’s certain that there is a divide between what’s fun, and what helps, when it comes to keeping users returning for another session.
If we take the angle of thicker competition, then we find that with more apps competing for the same pool of users (by serving more ads), the more attention fractures, and the bigger retention rates lower for everyone. With the app world developing to the point where they take up TV airtime and spin-off into books, movies, and diverse merchandise, we could see retention rates drop further, even if sessions per user, or time per session, stay relatively constant. As mentioned in the discussion on Games, perhaps what we’re seeing more evidence of is the increasing demographic of younger users lowering the rate of retention, whereas older users are more likely to keep using useful apps (and in some demographics less likely to download games), while also being more open to following re-targeting campaigns.
Ultimately, as everyone who creates apps becomes more entrenched in best practices, and as competition increases along a path well trodden, retention rates could become lower, quicker, by Q2.
The quick summary
• Utilities applications have had a strong year on Android, with the distinction of the highest retention rate by day 7.
• Games applications are being treated more disposably by iOS users, with a high retention rate on day 1, but a sharp fall after.
• Overall, retention rates were higher in Q3 of 2015 for apps that provide entertainment. For those that provide information, Q1 2016 was a higher performing period.
• No category retains more than 14 percent of retention over 30 days.
• No category has reached 1 percent of retention at day 30.
• Apps in the education category perform surprisingly well. Although the numbers seem average, they keep their long term users around - from day 22 to day 30 the curve is practically flat. Social & Communications and Utilities apps on Android have similar performance toward the end of the quarter as well. Why this is, well, it likely stems from the same reason as Utilities performance has been so high - people using their phones more like tools as opposed to entertainment consoles.
• While we’ve been keen to highlight big differences, some apps perform really similarly per platform. Entertainment applications both experience a larger drop of a tenth by about day 17, and sit at similar retention by day 30. Lifestyle applications also perform identically – 11% of users coming back by day seven on respective devices.
• Books and Magazines on Android had the highest rate of retention on day one, but the lowest by day 30. This illustrates a wider trend. Day one performers such as Games or Lifestyle on iOS, all perform well until day 12 of installation, when their numbers tend to drop quickly. The trend isn’t reflected in other categories such as Social, Travel and Utilities, but it’s interesting to note that at least by day 15, the numbers begin to reduce a little quicker.
Where was the data sourced and why is it segmented?
We began by collecting performance data from all apps tracked by Adjust over a period of two months in Q1. Then, once we had all the figures together, we took every period across the set, from day one to day 30, and averaged them per category. What is presented is an average of each period across three quartiles.
We’ve done this so that app developers, marketers and others can find themselves within the dataset - comparing their performance to see where they lie across a spectrum of averages within their category.
Quartiles themselves are a group of four values, quartered according to a set distribution. While the segments are divided, when presented on the benchmark report they are represented in threes. The image below will illuminate this a little more.
While there are four sections, there are three quartiles from which we can plot the data as definite values within a range.
We’ve presented our data this way because it’s easier to make relevant comparisons. Instead of a single column representing the median, we have three. Depending on your app’s performance, you can find the best data relevant to your own benchmarks. If you would like to compare across the entire vertical, Q2 represents the median.