It’s getting harder to make app economics work. So says AppsFlyer in a report [download page] produced with Facebook, which argues that declines in high-value organic users and rising paid media costs are making it more important than ever for apps to maximize revenue streams, particularly given ongoing issues with app loyalty and engagement.
Understanding average revenue per user helps to set benchmarks for how much can be spent to acquire a user. So here are some figures based on an analysis of 3,800 apps covering $2.4 billion in total worldwide revenue during Q1 2018.
Globally, the report reveals that combined in-app purchases and in-app advertising revenue totaled $1.70 per user over the 90-day period of analysis. This figure is derived from an examination of both organic and non-organic traffic.
Only 3.8% of users make in-app purchases, per the report, however these paying users spent $70.27 each on average during the 90-day period.
Globally, revenue per user was higher for iOS players ($1.99) than for Android users ($1.56), although the 28% higher figure for iOS is low in comparison to other verticals, per the report.
The share of users who paid for purchases was roughly 50% higher for iOS players (4.7%) than for Android players (3.2%).
Meanwhile, the share of paying users was not much higher for organic (3.8%) than non-organic (3.6%) users, something the report attributes in part to organic discovery in gaming being somewhat experimental and therefore lacking brand affinity.
While organic users weren’t much more likely to pay than non-organic users, they did spend more. Paying organic users outspent their non-organic counterparts by 34% ($1.76 and $1.31, respectively).
Shopping apps boasted a much higher percentage of paying users than gaming apps, at 9.7% across organic and non-organic traffic.
Average revenue per user was also much higher, at $13.88. This is partly due to greater brand affinity among users, as they typically know a brand before downloading its app.
Once again there wasn’t much of a difference between iOS (9.8%) and Android (9.6%) users with respect to the share of users making a purchase. However, average revenue per user was 70% higher for the iOS ($19.64) than Android ($11.49) platform.
The gap was also quite profound between organic and non-organic users. More than one-tenth of organic users (10.9%) made a purchase during the 90-day period, compared to 8.9% of non-organic users. Moreover, organic users averaged a spend that was almost triple that of non-organic users ($20.63 and $7.10, respectively).
Given the longer timeframe to make purchases, the report details average revenue per user based on a 180-day lifetime value as opposed to the 90-day period used for Gaming and Shopping apps.
The analysis reveals that almost 1 in 10 travel app users (9.6%) made a purchase during the 6-month period, resulting in an average revenue per user of $29.42.
Travel apps saw higher buyer rates among iOS (13%) than Android (8.5%) users, with average revenue per user 60% higher among the former ($32.29) than the latter ($20.47).
Finally, organic users were 2.5 times more likely to make a booking through a travel app than non-organic users (14.7% and 5.5%, respectively). The gap in average revenue per users was not quite as high, but averaged $29.28 for organic users against $17.97 for non-organic users.
The full report, which contains much more data – including country breakdowns – can be downloaded here.