Consumers Want New Apps, Yet Mobile Marketers Fall Behind On Discoverability

NEW YORK, Nov. 16, 2017 /PRNewswire/ -- The mobile economy is seeing explosive growth - that's no surprise. According to the 2017 Index: The Mobile Consumer, a new report commissioned by mobile partnership platform Button and most trusted app market data and insights company App Annie, alignment with what consumers want and where marketers are focused is not there. Released today, the report dives into the views of three important constituents when it comes to mobile: industry growth, the consumer's wants and needs, and how marketers are approaching it all. 

Overall, consumers are turning to their favorite apps daily for a range of reasons, spending more time than ever in them. In mature markets this breaks down to one month out of every year spent in apps. But people still feel they're missing out, so much so that over a third of respondents feel they're actually missing out on great new apps (37%), and even feel they're hard to discover (38%). They aren't willing to download just any app though; people not only want quality but also a known source. According to consumers, the top two scenarios for finding and installing a new app: searching the iOS App Store/Google Play and if prompted by a trusted app/source they're familiar with. In fact, they're 2x more likely to install from a trusted source compared to an ad on social media, and 4.5x more than an ad on a search browser (e.g. Google Chrome).

Consumers rely on sources they trust when discovering new apps. A majority (64%) stated they'd be more willing to purchase through and/or install a new app if prompted by a source they trust. Yet when you look at where app marketers are spending mobile ad dollars, more than half (57%) goes to the Facebook/Google duopoly.

• 55%: have never downloaded an app and/or make a purchase immediately after seeing a Facebook ad
• 64%: "never" or "rarely" intentionally click on a mobile ad (only 8% stated they intentionally click "often" or "very often")
• 52%: have intentionally clicked on a mobile ad for another app (a decline from 57% in 2015), but only 44% have clicked on a mobile ad and downloaded an app

There's a big opportunity at hand for brands to get ahead, especially emerging brands. Younger, digital-first shopping brands such as Poshmark, Wish, and Walmart-owned Jet ranked much lower as consumers' favorite apps compared to retail giants such as Amazon, Walmart, and Target. However, app marketers need a solution to increase discoverability in a cost-effective way while targeting the places consumers trust most.

"Consumer intent lies elsewhere in mobile, beyond Google and Facebook and in significantly higher-converting channels," stated Michael Jaconi, Founder and CEO of Button. "For instance, affiliate partnerships see purchase conversion of 25% on average, whereas paid social and search see conversion rates of 1% and 4%, respectively. Brands on mobile need to focus on targeting the moments of intent among users, connecting people to what they want in the moment they want it."

ADDITIONAL KEY HIGHLIGHTS FROM THE 2017 INDEX: THE MOBILE CONSUMER

In Times of Growth, Discovery Remains an Opportunity.

THE INDUSTRY VIEW
App Usage is on the Rise. According to App Annie, Google Play and the iOS App Store feature a combined 5.9 million apps and time spent is expected to hit 3.5 trillion hours by 2021. Q3 2017 saw historic performance worldwide with a combined 26 billion downloads and $17 billion in consumer spend (28% increase YoY).

THE CONSUMER VIEW
They're picky about what apps they do download. Most (38%) cited the top reason they don't download a new app is because they don't want to clutter their phone with 24% stating they won't use the app enough.

People want more, they just don't know where to turn. Over a third of respondents feel they're actually missing out on great new apps (37%), and even feel they're hard to discover (38%).

Those clicks aren't intentional (but for apps they still manage). Nearly two-thirds (64%) "rarely" or "never" click intentionally on a mobile advertisement. In looking at generational differences, millennials are most likely to click on a mobile ad with 39% stating they intentionally click "sometimes" (31%) or "often" (8%). Baby Boomers are least likely to engage with mobile ads as almost three-quarters (73%) stating "never" or "rarely."

People trust their sources. 64% of users are more willing to purchase through and/or install a new app if suggested by another brand they trust (compared to a mobile ad). A majority of respondents (78%) stated the most likely scenario for finding/installing new apps would be through "App Store/Google Play" or by "being prompted by a trusted source."

Facebook doesn't necessarily foster intent to engage. Over half of people (55%) have never downloaded an app and/or made a purchase immediately after seeing a Facebook ad.

THE MARKETER VIEW
Consumer intent lives at the bottom of the funnel, but that connection has been broken on mobile. The mobile partnerships channel, commonly referred to in the desktop area as affiliate, makes up almost 20% of all commerce in desktop, but has been largely untapped in mobile. Challenges unique to this growing platform have made it nearly impossible for building partnerships between apps, the highest converting channel for users.

Brands need to build mobile strategies beyond social and search. While more than half of mobile ad dollars goes to Google and Facebook alone, that's not what converts best. Mobile partnerships, the new category of affiliate in mobile, see an average purchase conversion rate of 25% compared to paid social (1%) and paid search (4%). This new category of affiliate in mobile today only represents a small fraction of the mobile economy's GDP - yet it's what users want.

Now's the Time as Mobile Commerce Grows

THE INDUSTRY VIEW
The app economy is expected to grow tremendously. According to App Annie, the user base alone will nearly double from 3.4 billion people in 2016 to 6.3 billion in 2021.

Mobile commerce is the leading driver of growth in the mobile and app economy. Per user mobile commerce is expected to increase (more than 250%) from $344 to $946 by 2021 globally. In the US specifically, strong growth is expected with consumers becoming more likely to spend in-app with growing basket sizes. 

Users are turning to apps for shopping needs. Globally, overall downloads of Shopping apps grew 20% year-over-year in H1 2017 across both iOS and Google Play. And across all smartphone users in the US, consumers spent nearly an hour on average in Shopping apps each month.

THE CONSUMER VIEW
Users prefer apps to mWeb for the "convenience factor," especially in Millennials. On average, more than half of respondents are turning to apps for shopping needs. We see 62% of Millennials prefer apps compared to 44% of Baby Boomers.

And why? Of those that preferred mobile app, when asked "why" the top reason included:

• 69%: apps are easier to navigate on a phone (compared to a mobile site)
• 61%: login details are saved/easier to enter
• 57%: faster load time
• 54%: personal info and payment credentials are already saved/easier to enter

Traditional retailers lead the way in shopping apps. Amazon (87%), Target (51%), and Walmart (48%) lead the way in consumers favorite shopping apps. Digital veterans Groupon (44%) and eBay (32%) don't fall too far behind, but opportunity still stands for younger digital-first retailers like Wish (13%), Jet (4%), Poshmark (4%), and Spring (>1%). 

Connecting a consumer's trusted source where intent fosters to brands where they can take action on mobile is becoming more common. In fact, 63% of respondents have been prompted to go from one experience to another. And from here, they want simplicity. If they already have the retailer's app installed that they're being prompted to complete a transaction within, 84% of respondents expected to be taken to that app. If they were not taken to the retailer's app (and to mWeb instead) over a third (36%) stated they would not have completed the transaction out of convenience's sake (not wanting to login and/or re-enter payment details on mWeb).

THE MARKETER VIEW
Mobile partnerships between brands create rewarding experiences for all parties. Leading consumers through install flows through brand partnerships on mobile proves successful, with install conversion rates peaking for various industries:

• Fashion: 46% install conversion rate
• On-demand: 38% install conversion rate
• Travel: 39% install conversion rate
• Grocery: 40% install conversion rate

And leading consumers to a brand's native app see a higher purchase conversion rate than mWeb, especially in various industries:

• Fashion: apps (18% CVR) convert 3x more than mWeb
• Grocery: apps (21% CVR) convert more than 10x mWeb
• Retail: apps (51% CVR) convert more than 4x mWeb
• Travel: apps (23% CVR) convert roughly 4x more than mWeb

A HOLIDAY SNAPSHOT

Holidays have begun, and that means it's time to shop. Starting with Alibaba's "Singles Day," which hit a record $25 billion in sales, according to App Annie the holiday also saw record success with the brand's app - AliExpress - taking the #1 spot for daily iOS and Google Play downloads in the US, France, the UK, and Germany that day (11.11.17).

Up next, Black Friday. Last year marked the first billion-dollar Black Friday for mobile shopping, and it's expected to do it again. It's expected there will be well over 12 million hours spent in the top five digital-first apps on Android phones alone in the US this year - a 40% growth from 2016.

Consumers are ready and plan to use their mobile devices. A majority of respondents (80%) said they do plan to use mobile sites/apps while shopping this holiday season, which is moreso for Millennials (84%) and GenX (83%) than Baby Boomers (62%).

Mobile starts far before the purchase. The ways consumers plan to use their mobile devices:

• 79%: research items for purchase
• 54%: price compare while shopping in-store
• 46%: purchase a few items on mobile
• 36%: purchase most items on mobile
• 25%: access mobile-only savings
• Fun fact: 5% of people plan to do all of their holiday shopping on mobile.

You can download the "2017 Index: The Mobile Consumer" or to learn more about the report methodology here. To learn more about Button or App Annie, visit www.usebutton.com and www.appannie.com. 

About Button
Button (www.usebutton.com) is the premiere mobile partnership platform for the world's leading brands, providing a scalable solution and the simplest way to build partnerships that drive commerce. Through proprietary technology and hands-on service, Button facilitates discovery and transactions among consumers with a user-first experience. Current partners on the platform feature industry leaders such as Walmart, eBay, Groupon, Hotels.com, and leading publishers around the world.

The company was founded in 2014 and was voted as a top 50 Best Workplace by Inc. Magazine and a Best Place to Work in New York by Fortune in 2017. Button has raised more than $35 million in Seed, Series A, and Series B funding from Norwest Venture Partners, Redpoint Ventures, Greycroft Partners, DCM Ventures, Accomplice Ventures, VaynerRSE and others.

About App Annie
App Annie delivers the most trusted app market data and insights for your business to succeed in the global app economy. Over 900,000 registered members rely on App Annie to better understand the app market, their businesses and the opportunities around them. The company is headquartered in San Francisco with 450 employees across 15 global offices. App Annie has received $157 million in financing, including from investors such as Sequoia Capital, Institutional Venture Partners, IDG Capital Partners, e.ventures, Greenspring Associates, and Greycroft Partners.

SOURCE Button

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