According to a new AppsFlyer report, global ad spending on app installs in Q4 2020 and Q1 2021 reached $5.4 billion, with the US leading the way, followed by Brazil and the UK. That momentum continued as ecommerce app installs saw a 48 percent increase between January and July 2021, with Android gaining 55 percent and iOS 32 percent. Around that same time, ecommerce app spend experienced a 55 percent increase as compared to March to July 2020. 

Ahead we’re breaking down additional global and US ecommerce app insights from the report as well as AppsFlyer’s tips on how marketers can respond to the holiday rush and the challenge of iOS updates.

Impact Of COVID-19

COVID 19’s impact on consumer behavior can’t be understated. The ongoing digitization of our lives won’t taper as the pandemic seems to be – 70 percent of teen and adult smartphone users in the US stated they would continue their COVID-19-induced smartphone behaviors even after the pandemic is over.

Globally, mobile commerce grew roughly 30 percent in 2020 and made up 64 percent of retail ecommerce sales. According to eMarketer, mobile commerce sales will approach $3.2 trillion this year and surpass $5 trillion in 2025.

In addition, Global ecommerce app installs rose by roughly 50 percent in 2021 – the same level reached during the 2020 holiday season – as consumer spending rose by 55 percent YoY. Accordingly, ecommerce app usage during the 2021 holiday season will be unprecedented.

To capture the most value out of these behaviors, retailers should put mobile apps at the center of their Q4 marketing strategies and secure seamless transitions from mobile web to app, where, according to a Google report, performance is significantly higher. Additionally, marketers must communicate with existing buyers where they are and use deep linking to smoothly reach the correct destination within the app.

State Of Ecommerce Apps In North America

While growth is more widespread around the world on Android, iOS dominates the US market share in ecommerce, comprising roughly one-quarter of the market, based on AppsFlyer’s data. The US comprises one-third of global ecommerce user acquisition (UA) budgets at over $18 billion in H2 2020 and H1 2021 combined. This is due to the US’ massive scale and a particularly high cost of media. Scale plays a larger role than the cost of media in developing markets like Brazil and India while the opposite is true for developed markets like Germany and Japan.

AppsFlyer also found that app installs are up 36 percent YoY compared to pre-pandemic levels, with 2021 in-app spending having peaked in March with a 156 percent increase over March 2020. Additionally, the 2020 COVID-19 app install surge surpassed the holiday rush, which begins in November, by 8 percent.

iOS 14.5 Leads To Decline In Remarketing Conversions

iOS remarketing conversions declined by 50 percent after the launch of iOS 14.5 while Android remarketing conversions witnessed a 10 percent decline over the same period between April and July 2021. As of August 2021, 83 percent of US iOS ecommerce app users have upgraded to iOS 14.5 or newer. Of those, 42 percent of users prompted have opted in.

To get the max opt-in rates, AppsFlyer suggests ensuring that apps evaluate when and how to display the ATT prompt and optimize the user experience to harness users’ trust. To acquire full iOS attribution coverage, marketers should also make sure their media partners are integrated with SKadNetwork (SKAD) and that reporting includes SKAD data without double counting. 

Lastly, marketers can prepare early for the holiday rush by utilizing the lower cost per install (CPI) in Q3 and increase UA before Q4 rush. AppsFlyer reminds marketers that remarketing reaches its peak effectiveness in November and December while CPI rises dramatically in Q4.

2021 Spending In Ecommerce Apps Up 35 Percent YoY

March 2021 saw an in-app revenue spike that was just 6 percent less than the peak in November 2020 and 9 percent higher than the July 2020 spike resulting from the first COVID-19 lockdown. Despite the fact that in-app spend has declined by 16 percent since March 2021, it’s up 35 percent YoY through July 2021.

November 2020 experienced a 16 percent holiday season spike over that year’s previous high watermark. This year, AppsFlyer predicts ecommerce in-app spend will rise by 42 percent between July and November.

App Install Ad Spend Down 10 Percent YoY In 2021

Despite ecommerce app installs being up 2 percent YoY in 2021, app install ad spend per app is down 10 percent this year, according to AppsFlyer. Nevertheless, ad spend is very likely to surge during Q4 based on the consistent holiday rush.

iOS app install ad spend per app was 22 percent higher, on average, than Android between January and April. In the months after the iOS 14.5 launch, Android install ad spend per app surpassed that of iOS spend by 4 percent on average.

Marketers Aren’t Capitalizing On Low Android Cost Per Install (CPI)

Compared to non-organic installs being 14 percent below the average for the same period last year, Android CPI was 50 percent below average in July 2021. Consequently, Q3 and Q4 2021 will likely serve as strategic moments to invest in Android UA given the holiday season and that overall Android installs in July 2021 were just 5 percent below average.

In addition, AppsFlyer found that iOS CPI surged leading up to iOS 14.5. Q1 2021 iOS CPI is up 129 percent over Q1 2020 while the average Android CPI is up 20 percent over the same period.