tl;dr App installs are no longer enough. Mobile marketers differentiate on re-engagement.

Setting the stage

Mobile has continued to grow bigger, faster than anyone anticipates. On iOS, over 1M apps being downloaded cumulatively over 60B times distributing $13B on an estimated 300M devices. Android is neck and neck and has announced 48B downloads of 900K apps on a now estimated 1B devices.

In Ben Evan’s fantastic Mobile is eating the world presentation pegs these numbers at 2B downloads and $1.1B gross revenue on iOS per month. On iOS this works out to an average of 4-5 app downloads and $2 per active device per month. Android has a similarly impressive top line, 2-3B downloads per month, with aslightly less engaged user base averaging 3-4 downloads per device.

Big business

App distribution is clearly big business for the two main platforms. App install ads also represent $2.4B in 2014 in the US for the broader ecosystem. With products like Google app indexing and AdWords, Twitter Cards, Facebook App Install and Engagement Ads, and Apple Smart Banners marketers can drive install and more importantly re-engagement with their apps.

Flurry reports that “86% of time spent on mobile devices is spent inside applications, with just 14% left for the mobile web.” But as Hunter Walk reflects on, just as content is moving to the ephemeral, apps themselves come and go very quickly. The WSJ reports that “More than 60% of apps are opened 10 times or fewer after being downloaded” citing a 2011 study by Localytics.

Opportunity

After the install, users fall off quickly. With a relatively establish ecosystem in install ads, retention is now how to creative competitive differentiation. This is certainly core to an apps product. An engaging app, with great fresh content, and a good UX will drive better retention.

Fred Wilson set the bar at 30 / 10 / 10. 30% of customers will use the app each month, 10% will use the app daily, and 10% of that daily use 10% will be using the app concurrently. This is a great directional guideline and analytics services like Flurry and Mixpanel can help target vertical specific retention.

As the landscape changes from pure distribution (app install ads) to broader engagement (retargeting, push notifications, deeplinking …), the technology required by marketers is changing. Apple and Google have enabled (Google Intents, Apple Tips and Tricks) deeplinks, facilitating a web of apps and targeted notifications. When the illustrious Mary Meeker talks about the 20 Billion ad opportunity on mobile, I believe this deeper web of apps will close the gap. At HotelTonight, I was fortunate to work with companies like URX and HasOffers, who I see as driving the innovation on the existing models.