A new report from mobile app user acquisition research firm Liftoff points out, among other facts, that the mobile gaming market is set to draw in revenue of around $58.1 billion by 2020. This total will represent about 72% of global app revenue, counting both in-app purchases and upfront game purchases. User engagement in almost all monetization models is up across the board, with in-app purchases in particular seeing a massive spike of 67% year on year, leading to an average rating of around 13.4% of users making in-app purchases. This is all based on data gathered between June 1, 2017 and May 31, 2018.
The data indicates that the average cost to get a user to install an app, accounting for man-hours, advertising, Play Store fees and other associated resources, is $3.31. $6.37 will net you a user who registers and is likely to continue using the app, and the estimated cost to get a user who makes an in-app purchase is a whopping $30.79. All of this is based on a number of factors that boil down to the fact that this is not an amount that app makers have to pay out per user, but rather a cost estimate of sorts. Even so, this makes ongoing engagement all the more important, and Android as a platform tends to under-deliver on these metrics compared to the average. While about 52% of Android users in the app campaigns being studied went on to install and register, only 10.8% of them made an in-app purchase. Of those, females tended to spend more readily, with a 16.7% conversion rate across ecosystems, 79% higher than the same metric for males. Females also cost less to acquire once you’re past the install stage, though they’re more expensive than male users at first. Speaking globally, the United States is a ripe and mature market, with $34.1 billion in predicted spend on Android in 2022, but it’s bested by China, which is projected to have Android spend of around $38.7 billion. Other regions are dwarfed by those numbers, but across all regions, games command more spend than apps. If app and game makers have a hard time convincing users to open their wallets, there’s always rewarded video advertising, which Liftoff’s data indicates that somewhere around 80% of mobile users are open to engaging with.
At the end of it all, the biggest takeaways from the report are that games are much more spend-encouraging than apps, female users are harder to acquire but worth it in the long run, and in-app purchases are a growing market. Other forms of monetization aren’t exactly short on cash flow, but they’re seemingly not as profitable in the long run. The message is quite clear; target a diverse audience and embrace multiple monetization channels for maximum profit.