New Pew Figures on Apps Hint at Why App Ads Might Fail

New Pew Figures on Apps Hint at Why App Ads Might Fail

Click to enlarge New figures from the Pew Internet Project provide some insight as to why app-based ads might not deliver the returns companies expect: a sizable number of users download apps but never get around to using them. Among cell phone owners, 29% have downloaded apps to their phone and 13% have paid to download apps. Yet according to Pew, of the 35% of U.S. adults have apps on their phones, only 24% use them. The apps users tend to be younger, more educated, and more affluent than other cell phone users. The users tend to skew male and slightly Hispanic when compared with other adult cell phone users.

How Engaging?

The statistics holding interesting implications for companies that are forging ahead with new mobile marketing strategies, namely Apple's iAd. Certainly there are compelling reasons to use the platform: click through rates and other engagement metrics are much higher compared to other online ad formats, some early adopters have reported.

But other companies that have used the iAd platform report being disappointed. David Smith, founder of Cross Forward Consulting can be counted in that camp - possibly for reasons that Pew's statistics capture. "I have tried just about every advertising platform around and have generally found none of them to be demonstrably effective," he wrote in a blog post describing his campaign. "I think that this stems from the fundamentals of why people buy apps. I believe most people buy apps based on receiving a recommendation, either directly from word-of-mouth or indirectly by their position in the Charts."

He ran the campaign from August 19 through August 25 for its Audiobooks Premium app. The results were disappointing: for $1,251.75, his campaign generated a total of 84 downloads, thus a Cost Per Acquisition (CPA) of ~$15. "For a $0.99 app, those economics just can’t work out."

Other stats from Pew on app users:

•Women in the sample were more likely than men to have used a social networking app in the past 30 days (53% v. 42%), and women who used the Facebook app were also more likely to use that app everyday (64% v. 55%).
•Women in the sample were more likely than men to have a used a game app in the past 30 days (63% v. 58%), while men were more likely to have used a productivity app (29% v. 21%) or a banking/finance app (31% v. 25%).
•Among the Nielsen sample of recent downloaders, whites (53%) and Hispanics (47%) were more likely than African-Americans (36%) to have used a map/navigation/search app in the month prior to the survey Hispanics, on the other hand, were the most likely to have used a music app recently (48% of Hispanics v. 42% of whites and 42% of African-Americans).
•In the Nielsen sample, 75% of 18-24 year-old Twitter app users reported using that app every day, compared with 52% of the 25-34 year-olds and 48% of the Twitter users age 35 and older.
•In contrast, among Nielsen's Facebook app users, 25-34 year-olds were more likely than both younger and older Facebook app users to report using their Facebook app daily.
•The African-Americans and Hispanics in the Nielsen sample were significantly more likely than whites to be daily users of their Youtube apps (33% of African-Americans v. 24% of Hispanics v. 12% of whites) and their Pandora music apps (33% of African-Americans v. 27% of Hispanics v. 14% of whites).