App developers should “rigorously” measure metrics about their audience in order to gain loyal and profitable users, advised Verto Analytics.
The firm’s data shows that number of downloads can help measure an app’s initial success, but less than 2 per cent of downloads lead to long-term users who can be monetised. Plus, apps retain only 5 to 10 per cent of users after 30 days.
Instead, the potential size, structure, quality and profile of an app’s audience is more important for monetisation, and also crucial to benchmark performance against competitors.
Verto will use this methodology to determine the value of a user based on its newly launched Verto Retention Reports framework. It claims that, for the first time, companies will be able to calculate the return on investments of their ad spending on mobile.
The framework can also help optimise future campaign spend for the right types of users and measure profitability on an app title or consumer segment.
Metrics it will measure include number of active users during and after the first 30 days; time spent in an app; the number of sessions users allocate to a single app versus other on-device activities; and user demographics – device ownership, gender, geographical location and age.
Using this framework, Verto also made some discoveries about app usage. For instance, games have the highest share of downloads (21 per cent), social apps have the highest share of time spent in apps (40 per cent) and communications/social apps are the only category to retain at least 20 per cent of users after 30 days.
It also found that games, photo/video, utility and lifestyle apps have the highest cost of successfully acquiring a long-term loyal user.