2017? Pretty great year for mobile.

Google Play has over 3.3 million apps (as of September 2017). The App Store’s most recent numbers put them at over 2.2 million apps. Year by year, the app market continues to grow: 2017’s app revenue is projected to be $77 billion.  In 2014 — just 3 years ago — the market saw $35 billion worth of revenue. That's less than half of the revenue we're seeing now. 

Mobile also saw it’s biggest Black Friday ever with 42% of sales happening via mobile. And on Cyber Monday, mobile sales accounted for $2 billion out of $6.59 billion in total sales — a new record for mobile.

Clearly, there's plenty of growth and opportunity. But that means more competition, too. And as mobile tech progresses and users depend more on their mobile devices and apps for just about everything happening in their lives, the challenge for mobile marketers goes beyond app installs. Experiments need to be conducted that help drive engagement and retention.

Don't have an app? Consider this:

Americans spend more time looking at their mobile phones than watching TV, and 89% of that time is spent in an app. With the right app experience, you can increase engagement with your audience and improve mobile transactions. So if you’re still on the fence, kick off 2018 by bringing an app into your marketing mix.

In this guide, we'll review some different ways to approach app marketing in 2018 to stay relevant. We'll also review new features you can consider adding to your app's tech stack to streamline payments and make push notifications convert better.


FOCUS ON RETENTION Onboard, Then Optimize.

FOCUS ON RETENTION Onboard, Then Optimize.

Back in 2016, we (being the Localytics team) discovered that 23% of users who download your app will only open it once — and never again. 

Yeah. It wasn’t our favorite data point to share, but mobile marketers needed to know. That’s the only way we can do better, right?

We revisited this question again in 2017 to see what, if anything, changed over the course of a year. The results? The number of users who will download and only open your app once rose by a percentage point in 2017 to 24%. 

So a percentage point isn’t huge. But it does tell us that we haven’t figured out how to create a first-time experience that sets the stage for long-term user engagement.

What does that mean for 2018? Mobile marketers continue to be challenged to create app experiences that emphasize user engagement from the very first time they open the app. 

Users give you one chance to prove your app offers them real value. And most users will be skeptical. With onboarding, you can make the most of that chance and create a first-time interaction that shows users:  

  1.  Downloading your app was the right call
  2.  How to find the features and functionality they’re looking for
  3.  Set them on a proven path to success (it's up to you to define what that looks like for you users)

How to Convince Your Team

The data tells us that if you get onboarding right, it works. We compared onboarding experiences that include welcome or beginner tutorial screens that get users up to speed and showcase value with apps that initiate new users with a request to create an account, without clarifying why.

Apps with a true onboarding experience: 9% abandonment rate after the first use. 61% of these users ultimately visited the app 11 or more times.

Apps without onboarding (just a directive to create an account): 17% first-time user abandonment rate, and only 41% visited the app 11 or more times. 

How else does onboarding benefit long-term engagement?

1) You're more likely to convince users to allow push notifications. When users have push notification enabled, 65% return to an app within 30 days. Only 19% of those who don’t will return in that same time period. 


Airbnb clarifies the value of enabling push before the user sees the generic Apple permissions message.


2.) Same for location services. The generic request sent by iOS doesn’t give a user any compelling reason for them to allow you to access their personal data. With onboarding, marketers get the gift of context: you can add a step to your experience that spells out exactly why giving permission to access location data is in the user’s interest. More targeted offers, status insights, whatever you have to offer. 

How to do it? In app messages.

Most apps utilize in-app messages as a way of creating an onboarding experience, or at least targeting messages to users that appear as soon as they open the app. And according to our data, it’s paying off:

App User Retention - In App.png

54% of users who receive an in-app message on their first visit will return 11 or more times. Only 33% of the users who don't receive an in-app message will. So it stands to reason that an in-app message on first visit adds helpful context for new users who don't yet know your app. 

Here’s a little inspiration for you...

Rent the Runway does an excellent job highlighting the features users care about and that represent the most value to them, like easy returns. They keep the text light, and the whole onboarding experience is only four screens. As important as onboarding is, your user is impatient to get started. There’s a limited amount of time you’ll keep them interested.



 Prioritize Mobile Payments


 Prioritize Mobile Payments

Mobile payments are on the rise: by 2020, it’s predicted that over $319 billion of sales will take place through mobile apps.  So if you haven’t taken some time to streamline and optimize your mobile checkout in 2017, put it at the top of your 2018 to-do list.

According to Forrester, 41% of users indicated that they’re likely to try out a digital wallet in 2018. Accordingly, merchants are looking to mobile wallets, too; 55% of merchants plan to update their point-of-sale (POS) systems to include more mobile wallet solutions. 

And these are the groups that haven’t already embraced mobile wallets! Wait much longer, and you risk falling behind your competitors in terms of providing the kind of experience your users expect, as more of them come to depend on mobile wallets.

What do users want from a mobile wallet?

  • Order and pay-ahead functionality. Delivery apps like GrubHub and Postmates are leaders in providing a seamless mobile payment experience, but more retailers like Target and CVS are offering users the chance to do so too. 
  • Easy offer and coupon redemption. Target recently rolled out their own mobile wallet that integrates the offers from users’ REDcards when users order via app. The app offers Apple Pay, too.
  • Streamlined experience throughout the whole purchase experience. Carry the optimized, tested experience you’ve created through the bulk of your app through to the checkout screen.

Integrate with one of the major platforms: Apple, Android, PayPal or Samsung Pay.
All of them are now widely utilized, so you’re tapping into a platform many users are already comfortable with having as part of their buying habits. 

Or build your own.
Payments made via mobile now make up 30% of Starbucks’ transactions. Users have embraced the ease of paying with their mobile device. And despite Walmart’s slow start with mobile, it saw enormous success with Walmart Pay in 2016. One in 5 users have tried it, and considering the retailer’s success is built on the in-store retail experience, that’s huge. 


 Image Source:

Image Source:

If you decide to build out your own mobile wallet/payment processing experience, here's what to keep in mind:

Listen to your users. Conduct user research into your own payment flow to find the places people are dropping off. Perform A/B testing on copy, testimonials, and layout to improve conversions.

Integrate data and user research from your other channels, too. Making a purchase online — from ordering food to buying expensive tech — typically utilizes lots of channels these days. See how users are making purchases through other channels to drive in-app optimizations.

Make sure you put together a cross-functional team. Mobile experiences don’t just belong to app developers anymore. We did our own research into our customer base and found that apps managed by cross-functional teams saw higher numbers of monthly active users (MAUs). And only these teams saw positive year-over-year MAU growth. (More on this later.)




More personalization & rich content

Marketers haven't always hit the nail on the head when it comes to push notifications. We can be pretty sure of that since 50% of users with push enabled think push notifications are annoying.

It’s kind of like email: Spam is a huge problem. People are routinely frustrated by uninspired, impersonal messages that aren’t relevant to them. Industry leaders have been saying that it’s dead for years. But when it works, it works well. For every $1 invested in email, companies see an average ROI of $38. 

But figuring it out is a priority for marketers, especially considering stats like this one. Users that allow push notifications are more engaged than users who don’t: 88% more. 

There are two things we need to do:  

  • Improve the experience of asking users to enable push notifications (we covered that in the last section)
  • Make push notifications better. And that's where rich push comes in...

What makes a push notification “rich”?

The difference between a rich push notification and a push notification is that rich push includes imagery, sound, or video.


Many brands are still focused on text-based push notifications, but we’re seeing more of our customers embrace push and the results are paying off:

  • In December 2016, our customers sent 5 million rich push notifications. By March 2017, that number eclipsed 40 million — over an 8x increase.
  • Customers sending rich push notifications saw over 30% increase in engagement.

Rich media is dominating how we interact with brands. Using only text communication makes it harder for you to stand out when competing for your audience’s attention. 

How to Use Rich Push in 2018

Is your brand promoting a sale on particular product? Include an image to draw users.

Are you sending a message about a user’s abandoned cart? Add an image of one of the items to remind users what they’re missing.

Add a video to the latest breaking headlines. That way, a user doesn’t have to read the whole message to get a sense of what’s going on.

Use rich media to personalize your push. Check out the example below. Fitness tracking app Strava is sharing a message designed to build long-term engagement thanks to positive interactions with people the user actually knows. Rather than include a generic image, Strava added the profile image of the person giving the kudos. That makes the message itself feel more personal (and we’re more likely to be drawn to images we recognize).     



Acronyms to Keep An Eye On


Acronyms to Keep An Eye On

Artificial Intelligence

More major enterprise companies are committing to artificial intelligence as a means to successfully create personalized, intuitive, context-related mobile app experiences. There’s no industry that artificial intelligence doesn’t have the potential to transform. And we’re already seeing the impact in the mobile space, especially with virtual assistants and the voice-recognition software that drives them.

32% of executives say voice recognition is the most-widely used AI technology in their business.
Narrative Science

Artificial Intelligence is how mobile adapts to users, faster.

Thanks to pop culture, A.I. is more likely to bring something like the humanoid robot Pepper from Softbank Robotics to mind than the ways we’re actually seeing it out in the wild. Without users realizing it, artificial intelligence is behind many of the ways we’re seeing app experiences personalized and streamlined.


Pepper, the Softbank robot. You can find Pepper at a few stores in Palo Alto. Image

Where We’re Seeing It Now

A.I. is driving the more personalized experiences users demand, and plenty of apps are already putting it to work.  We're used to Waze automatically adjusting our routes when we take a wrong turn — hat's A.I. at work.

This past year, Wayfair launched a new app feature that lets users upload their own photos to find similar items in Wayfair’s inventory. 

Matt Zisow, Wayfair product director, said at launch:

What sets our application apart is the rich, massive, proprietary furniture & décor data set that we used to train our models, which continue to get smarter as users engage with visual search results. 

That’s what makes artificial intelligence such a powerful tool for mobile marketers — that capacity to get smarter.  

How Can You Use Artificial Intelligence in Your App?

Customer service.

Artificial intelligence is about making decisions faster. And when you’re dealing with frustrated users, helping you identify and resolve issues on the device that they always have in their pocket is a powerful way to delight users.

Connect users to the products they’re likely to love.

Especially when they don’t yet know what they’re looking for. Data (shopping history) from similar users can predict the products individuals are more likely to buy. 

Experiment with virtual assistant integration.

Platforms like SoundHound’s Hound can be integrated in your own app, letting you create an even more engaging experience for users. Voice recognition tools are getting better. In fact, 32% of executives say it’s the most used A.I. tech in their business.  


SoundHound uses push notifications to prompt app users to interact with Hound.


Streamline user productivity.

Artificial intelligence is about finding patterns, which makes it particularly well suited for apps that manage routines and regularly occurring activities. Google’s Smart Reply feature in its Mail app automatically creates replies for users based on the content of an email, saving them the time it takes to type it out themselves.



The value to mobile marketers? The ability to anticipate user needs before a user has to take action in the mobile app. And as artificial intelligence and virtual assistants learn more about users, experiences become more targeted.

Augmented Reality

Just like A.I., augmented reality is permeating every type of industry, and every kind of app. It’s become a mainstay of social apps like Instagram and Snapchat. Snapchat even launched an AR developer platform in December of 2017, indicating that Snap’s strategy will likely continue to be focused on AR through 2018.

Snapchat’s not the only one. Deloitte’s 2018 predictions included this one

More than a billion smartphone users will create AR content at least once in 2018. Tens of millions of these users will be doing so weekly.

So what exactly does Deloitte mean by user-generated content? Plenty of that will be Snapchat-type social content — the dancing hotdog was a bright spot during a tumultuous 2017 — but that’s not the only type of AR app audiences will be using.

You wouldn’t think of translation as something that might typically utilize AR, but here we have Google again. In 2017, Google Translate launched an AR feature that allowed for instant text translation via the user’s camera.



  Put together the right team to make it happen.


  Put together the right team to make it happen.

Remember that stat we talked about earlier? The one where we found out that 24% of mobile users will only open an app once? This is the kind of thing that keeps our head of sales and marketing, Lou Orfanos, up at night. 

So, like every good marketer, he turned to the data. Specifically, Lou looked to see what Localytics customers with the best-performing apps had in common. 

What he found? Across industries, companies that had cross-functional mobile teams saw higher numbers of monthly active users (MAUs), a metric that many apps use to measure engagement — 43% higher MAUs. “In fact,” notes Lou, “only the brands with cross-functional mobile teams showed positive year-over-year growth in MAUS.” 

Enterprise brands with cross-functional mobile teams saw a 43% increase in MAUs.

Cross-functional teams aren’t standard across enterprise companies. Traditionally, only the mobile engineers and product managers managed the marketing and engagement strategy. This effectively siloed mobile strategy away from the overarching goals and strategy of the brand — and limited the resources used to drive success on mobile. 

When the group responsible for mobile performance touches multiple areas of the organization — tech, marketing, customer success — you’re better able to create mobile experiences that are part of an overall user journey. It’s how teams can actually succeed in building the kind of omni-channel experiences that your audiences will demand in 2018.

Your Big Takeaway for 2018

Last year, we said 2017 was all about individualization.

In 2018, mobile analytics and engagement platforms have the data — and can translate it into the insights you need to create app interactions that make sense not just for mobile, but as part of your user’s overall experience with your brand. It’s a cohesive experience —and users expect it to be relevant to them. But with the help of the tools and tech we've covered, you're better positioned than ever to provide it.