A global pandemic that led to a surging demand for mobile experiences followed by an economic and digital cooldown, an increased focus on privacy and transparency that limited the amount of data mobile marketers had access to, and a negative trend in user sentiment have made the last few years particularly challenging for app marketers and developers alike, heightening scrutiny around marketing spend and demanding more accountability on ROI.
As we prepare for what seems like another challenging year ahead, let’s explore the most industry-sweeping trends in mobile marketing to look out for in 2023 to help you drive profitability and sustainability and ensure your app’s stable growth. As always, we will be taking a deep dive into key data points to paint an insights-driven picture of the current state of mobile marketing. So, without further ado, let’s get started.
A post-COVID digital cooldown will see brands shift their focus to long-term retention
The COVID-19 pandemic led to a rise in demand for escapism, entertainment, and mobile experiences, which in turn resulted in unprecedented mobile growth between 2020 and 2022, with surging app installs and record user spend. In 2021 alone, first-time app installs grew to 143.6 billion, while user spending grew a much larger 19.7% year-over-year to reach $133 billion.
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This artificially-inflated growth in demand for digital consumption led to brands spending 40% more on UA (user acquisition) in 2021 compared to 2020. However, the economic slowdown and rising inflation and a return to real-life experiences following the COVID-19 pandemic are all due to reshape the mobile market in 2023. As a result, mobile marketing teams will be operating with tight budgets and will have to be more selective in their activities and prioritize those that will have the greatest impact on their bottom lines.
As users return to real-life interactions and experiences and spend less time in apps in 2023, the cost of UA will rise. As a result, many brands will see their focus shift to long-term retention and engagement as loyal users will be hugely important to drive sustainable growth and/or survive a potential crisis scenario. Additionally, ad spend will start blending with organic growth in 2023 as organics become an increasingly important acquisition channel in the wake of tightening marketing budgets.
Being able to learn, implement, and iterate quickly to adapt to fast-paced changes will prove of paramount importance to any marketer looking to drive sustained app growth in 2023. Resourcefulness, adaptability, and efficiency will be the game’s name in 2023. Maintaining a steady focus on execution, delivering results, and proactive problem-solving and trying to be as flexible and agile as possible will guarantee that you will be able to weather any potential storm ahead.
User privacy will be front, right, and centre
It probably won’t come as a surprise to you, but 2023 will be the year of user privacy. Recently, many big tech companies have found themselves fined over breaches of privacy regulations, especially in the EU. Consider, for example, TikTok and Meta. Combine that with the increasing demand for transparency on the part of users, Apple’s ATT (App Tracking Transparency), and Google’s upcoming depreciation of cookies and Privacy Sandbox initiative and you can easily see why there will be no more deterministic data points for the entire funnel in 2023.
Instead, app marketers will have to rely more on bottom-up measurement methodologies like SKAdNetwork 4.0, which will become more modeled when mixed with top-down measurement like incrementality and MMM. As a result, creating a new measurement framework should be on top of your priority list for 2023.
To deliver performance advertising efficiently without individual user addressability, marketers will need to bring privacy and measurement together by funneling their data sources (e.g. SKAN data, MMP’s attribution data, Apple Search Ads data, MMM, and incrementality) into a single source of truth in order to assess their campaigns’ performance holistically. By shifting focus to long-term engagement and understanding the balance between the implicit limitations on measurement and the added value for your end users, mobile marketing teams can move to a new paradigm where measurement and privacy can coexist.
Pro tip: With ad targeting no longer as good as it used to be due to recent privacy changes made by Apple and Google, organic store search will become even more important and competitive than it is today. This will, in turn, mean that more ad spend will be devoted to app store search ads.
Personalization will reign supreme
While obtaining new users is still going to be crucial moving into 2023, achieving sustainable growth by prioritizing long-term engagement and retention, fostering user loyalty to prevent churn, and combatting the effects of fewer user data points (see above) will be even more important. To that end, personalization to enrich the user experience and story-based creatives, delivered in a way that captures users’ attention, will carry far more weight now than ever before.
Offering an exceptional user experience (UX) is quickly becoming a top priority for brands in 2023 as a way of fortifying their existing user base. After all, why neglect the very users you’ve spent countless dollars acquiring? You should also consider that acquiring a new user is 5-25x more expensive than retaining an existing one while increasing retention by 5% can increase profits from 25-95%.
Investing in user experience and raising your app’s retention rates can have a major impact on your bottom line, especially in light of the ongoing economic slowdown and the post-COVID digital cooldown. And what better way to increase retention and offer better UX than through personalization and by optimizing the user journey?
In 2023, marketers should focus on uncovering obstacles and pain points in their user journeys that cause users to churn. By leveraging customer engagement technology, first-party data, and understanding communication channel preferences, marketers can then optimize and improve the mobile experience using additional touchpoints and/or reminders where necessary. Interacting with users on their terms and listening to their feedback will allow you to cultivate critical relationships and have a substantial impact on your user lifetime value (LTV) and long-term loyalty.
Channel diversification will be more important than ever
Going hand-in-hand with personalization, channel diversification is another key way to ensure long-term brand loyalty and user retention. Users are omnichannel these days, so you should be too. Brands that take a cross-channel approach and blend in-app and out-of-app (e.g. email, SMS, push notifications, etc.) communication combined with audience segmentation also see more installs, more purchases, higher retention, engagement, and user loyalty as well as better LTV and user value.
Diversifying your channel mix will also allow you to expand your reach, attract as many new users as possible, and engage your existing ones across multiple platforms. Worthy channel diversification tactics to consider coming into 2023 include web-to-app, loyalty programs, AI- and VR-driven mobile marketing, and CTV (connected TV).
Influencer marketing is another great option that you should definitely consider in 2023. It combines performance and branding into a single medium, making it a great way to promote and grow an app by increasing brand awareness and reinforcing your marketing message in a non-invasive way. App marketers even have the option to choose between different types of influencers to reach their desired audiences. Want to reach a broad, diverse audience? A bigger industry name is probably the way to go for you. But if you are looking to target specific niches, there are plenty of micro-influencers to work with too. Check out our research page on influencer marketing trends to learn more.
User-generated content (UGC) will continue to be important going into 2023. UGC is defined as any content created by users of your app or influencers that you can use for marketing purposes. It is one of the most convincing ways to attract new app users. Because UGC content feels more authentic and less like an ad, it’s more likely to be effective. So, definitely don’t sleep on UGC if you want to attract new app users but only have limited marketing resources.
Another great way to stay competitive in 2023 will be by implementing video content. It is one of the most engaging forms of content and will likely remain so in 2023. As a result, social media platforms with solid video-based content will keep growing. Ever heard of TikTok? It is currently one of the most downloaded apps worldwide, and its cultural imprint grows bigger and bigger. The company has also been steadily expanding its ads business, allowing many apps and mobile games to thrive thanks to TikTok advertising. The success of TikTok is what also brought UGC-like ads to the forefront. Additionally, platforms like TikTok, Instagram, YouTube, Snapchat etc. is where you will find most influencers, big and small, because of their large user bases, so there are plenty of reasons for you to include them in your mobile marketing mix in 2023.
And finally, remember to be creative and try new things. If you are not actively looking to try new platforms, new trends, and new formats, you’re already out of the loop. A great example of an up-and-coming social media platform with a lot of promise is BeReal. Many brands were initially sceptical about TikTok too, but those who got on board quickly saw their efforts pay off. So, if you want to engage new audiences (and especially if you want to target Gen Z) and grow your reach, consider checking out BeReal. Some brands are already experimenting with it to great success.
- Privacy changes, the economic downturn, rising inflation, and a return to real-life experiences are all going to reshape the mobile marketing world going into 2023.
- Creating a new measurement framework that combines top-down and bottom-up methodologies should be a key goal for mobile marketing teams in 2023.
- Boosting the user experience through personalization is becoming a top priority for marketers looking to fortify their user base and mitigate churn.
- Resourcefulness and efficiency are going to be the name of the game in 2023. Focusing on long-term retention and engagement, providing strong user value, and diversifying your channel mix through lifecycle efforts than span across email, SMS, push notifications, etc. will grow in importance.