Global ad spend for e-commerce apps drops 50% year-on-year

By Chisom Nwatu

…as app marketers spend $6.1bn on user acquisition

Even though e-commerce app marketers spent $6.1 billion on user acquisition between July 2021-2022, global ad spending decreased 50 percent year-over-year, according to AppsFlyer’s new State of eCommerce App Marketing report.

The report attributed the decreased global ad spend to several reasons, including increasing iOS costs, people returning to their normal lives after the lockdowns and other macroeconomic factors.

The 2022 State of eCommerce App Marketing report also outlines key global trends, guiding marketers in building a mobile-first experience that will drive engagement and sales for the upcoming holiday season.

The report said following the past few years of significant e-commerce growth resulting from the Covid-19 pandemic, e-commerce in general and app marketing, in particular, have entered into a natural slowdown.

In 2022, e-commerce is no longer attracting the same volume of new users, and rising prices are starting to take their toll on marketing budgets and planning.

Heading into the holiday season marked by an economic downturn, supply disruptions, and continuing privacy changes and data restrictions, efficiency should be at the forefront of marketers’ minds.

In Africa, there was a general increase of 54 percent in e-commerce apps between January 2021 and July 2022. Unsurprisingly, the peak time for in-app purchases fell naturally during the Q4 holiday season, particularly in November.

Regarding organic vs non-organic installs, shopping apps slowly saw their share of non-organic installs fall on Android in South Africa, perhaps a sign that marketers are spending less. While in January 2021, non-organic installs made up two-thirds of an app’s total installs, approximately a year and a half later, in July 2022, this fell to 57 percent.

In Nigeria, however, the opposite trend was recorded, with non-organic installs making up the vast majority of an app’s total installs, likely to do with lower cost-per-install (CPI), which has increased over time. In January 2021, non-organic installs made up 64 percent of an app’s total installs, whereas in July 2022, this was 79 percent.

Shani Rosenfelder, director of market insights at Appflyer, said the likelihood of a downward trend for e-commerce apps is not the end for marketers, as November is annually the best month for installs and sales across most markets with the likes of Black Friday and Singles Day.

Other key highlights of the report show that app install ad spend among e-commerce apps fell by 55 percent on Android and 53 percent on iOS between January 2021-2022.

Meanwhile, iOS e-commerce app downloads were down 4 percent Y/Y worldwide and Android downloads dropped 5 percent globally, excluding India where installs grew by 110 percent.

The report also revealed that owned media conversion increased by 360 percent Y/Y between July 2021-2022. According to AppsFlyer, this could be resulted from marketers’ efforts to create more value with their limited budgets.

In the first half of 2022, iOS cost-per-install grew by 60 percent Y/Y to $4.2 while Android CPI dropped 15 percent to $1.43.

In addition, 30-day retention declined 5 percent on iOS and 13 percent on Android since mobile consumers are constantly discovering new apps.

“This year, especially, consumers might still have an appetite for spending in the holiday season thanks to the addition of the World Cup, for this reason, apps should focus on remarketing to retain the users they did pick up over the past few years and publishers need to make the most of their owned media channels,” Rosenfelder said.

AppsFlyer’s State of eCommerce App Marketing, 2022 Edition is an anonymous aggregate of proprietary global data from 5.1 billion app installs from 700 apps and 26 billion remarketing conversions.

AppsFlyer helps brands make good choices for their business and their customers with its advanced measurement, data analytics, deep linking, engagement, fraud protection, data clean room and privacy preserving technologies. Built on the idea that brands can increase customer privacy while providing exceptional experiences, AppsFlyer empowers thousands of creators and 10,000+ technology partners to create better, more meaningful customer relationships.