Insights & Events
The True Value of Organic and Paid Users
How much attention do you focus on acquiring organic app users versus paid? We take a deeper look into the value of organic and paid users.
Insights & Events
8 January, 2018
The first quarter of the calendar year is important for a number of reasons:
Whether you are launching a new app or looking to grow the user base of an existing app, Q1 presents a significant opportunity that shouldn’t be ignored!
Internet ad spend is clearly impacted by seasonal elements (IAB/PWC 2017). Since 2010, US internet ad revenue has followed this same seasonal pattern – a distinguishable peak in Q4 (evident in the graph below), followed by a dip in Q1, and an upwards swing in Q2. Over time, each new Q4 peak is higher than the previous year’s, indicating an overall upward trend.
With larger portions of ad spend being consumed in Q4, this time of year is bound to be the most competitive. More advertisers will be vying for the attention of your potential app users, making it more difficult to reach them and keep them engaged.
On the flip side, Q1 is likely to be the least competitive. Marketing budgets tend to contract after extreme holiday spending, providing an opportunity for savvy marketers to reach their next app users when the air waves are less congested.
Think about the events that happen late in Q4 and early Q1. Singles Day, Black Friday, Cyber Monday, Christmas, Boxing Day/New Year sales. All of these events trigger consumer spending on an epic scale. With the latest flagship smartphones becoming increasingly expensive, these consumer events are an opportunity for consumers to buy new smartphones for themselves or as gifts for their loved ones, at a fraction of the cost. As a result, smartphone sales tend to peak in the December quarter (Statista 2017).
Major smartphone models are released at the Consumer Electronics Show (CES) in January, or Mobile World Congress (MWC) in February. Following these announcements, many people upgrade to the latest model, or take advantage of the discounted prices of their predecessors.
A peak in smartphone sales means millions of smartphone users will be starting from scratch. Apps take up valuable real estate on a phone’s limited storage so when users upgrade their devices, they begin the process of critically evaluating which apps they will reinstall, and which will go.
Q1 success can be boosted by reinforcing the app’s value to existing app users to increase the likelihood of install after the user has upgraded their device. It is also a great time for building awareness among net-new app users as they may be more receptive to new app suggestions after a device upgrade.
Not every install of your app is going to be from a loyal user. Some people download apps and then forget about them, or uninstall if the app doesn’t meet their expectations. However, app retention also exhibits its own seasonal patterns. At certain times of the year, many apps see an uptick in the likelihood of a user returning to their app and becoming a loyal customer.
Analysis of 10 popular gaming apps of 2016/2017 shows that retention in Q1 is greater than in Q4. This could be a result of December’s peaking ad spend continuously persuading users that other apps deserve their attention.
If cost-per-install (CPI) stays the same over the entire period, and the percentage of installs that become returning users is greater, then cost-per-loyal-user (CPLU) declines in Q1 making it a great time to get new loyal users.
Don’t let your app campaigns slump after the excitement and frenzy of the holiday period. The first quarter of the calendar year presents awesome opportunities to build on the momentum of Q4 to grow an engaged and valuable user base.