The app opportunity in affiliate marketing

 

The pandemic outbreak has dramatically reshaped e-commerce as we know it.

From shopping and entertainment, to education and business, from the comfort of their homes or in the workplace, users rely on mobile to adapt to social distancing norms. According to an App Annie study, monthly time spent in mobile apps grew 40% year over year in Q2 2020, speeding up the transition to a mobile-first world. 1

In the middle of macroeconomic headwinds, affiliate marketing for apps is a fast-growing opportunity for advertisers and publishers looking to adapt to increased consumer spend in apps.

 

The benefits of promoting apps through affiliate marketing are undeniable: it is cost-effective, speeds-up app discovery, and increases user retention in apps.

 

Cost-effective

Affiliate marketing is one of the most cost-effective tactics in the digital industry. While most search, social, and display players will charge you for clicks and impressions, you will pay your app affiliate partners for sales or conversion events defined by you. Thus, launching your app affiliate program is virtually risk-free because you only pay your partners after they make money for you.

 

Speeds-up app discovery

Affiliate partners influence crowds of loyal and well-segmented users and can massively speed-up discovery of new apps in less invasive ways than push notifications and pop-ups. Affiliate partners offer the right mix of product discovery, recommendations, deals, and discounts to immerse the users along their journey towards purchase.

 

Increases user retention

Acquiring new users is only the first step in growing a healthy user base. Keeping users engaged with your app is a bigger challenge.

An Appsflyer study from 2019 shows that user retention in apps drops to 10.3% in Android and 11.2% in iOS just 7 days after an app has been installed. By day 30 it is as low as 4.2% on Android and 4.5% in iOS. 2

Re-engaging your users via affiliate partners is guaranteed to increase your customer retention and enhance the lifetime value (LTV), which in turn opens a host of possibilities for applying more acquisition methods.

Market research suggests that even a 5% increase in customer retention can lead to increasing profits by 25% to 125%. There is a 60 – 70% probability of selling to existing customers while that of a new prospect is just 5 – 20%. 3 

 

Performance insights from our partners at Global Savings Group

 

To illustrate the impact of affiliate partners on app performance, I have addressed a couple of questions to Alexander Hold, Senior Manager Business Development at Global Savings Group, a leading Commerce Content platform for consumer rewards, cashback, shopping info and savings opportunities.

 

Q: As an affiliate partner, what results have you delivered for clients who track in-app transactions ?

Alexander: For many advertisers, in-app tracking is the foundation of their affiliate program, as their business is born app-first. Clients like Uber, Deliveroo, and even Airbnb process the majority of their transactions via their app and less so via desktop. For other merchants we work with at Global Savings Group (GSG), their business was born desktop-first and app is a more recent channel that has grown into significance.

With app commerce growing at an average rate of 20% year over year, app is quickly becoming the core channel for reaching high value customers that shop frequently and spend more.

For example, at GSG we work closely and successfully with one of Europe’s largest sports brands on growing their newly launched app. Leveraging our global platforms, we are advertising coupon codes that can only be used on the brand’s app. Every month the campaign is driving thousands of new app installs and app now accounts for over 20% of all sales generated by GSG.

 

Q: In your view, what are the advertisers missing out  on when they don’t track in-app transactions?

Alexander: App is going to be the biggest environment for online commerce in the years to come, so merchants that are not investing in their app strategy are per definition going to be behind their competition.

For example, mobile traffic is today contributing 70% of all traffic on GSG’s UK domains, an increase of 27% in just 3 years. Among merchants that track app sales, 63% of mobile users complete their transactions in-app. This equals to a 41% performance increase for the advertisers’ affiliate channel.

The numbers speak for themselves: app commerce is the future and the affiliate channel has a low cost and high impact in driving app transactions.

 

What the future holds

We can no longer imagine a world without apps. There are over 2 million apps available for download in app stores and this number is increasing every day.

Technology advancements such as 5G networks, Beacon, Internet of Things (IoT), Artificial Intelligence will allow app developers to innovate strategies to attract new users and grow their business faster than ever before.

The only constant in this dynamic environment is the need to create performance-driven partnerships that will maximize the return on your app investment.

 

Resources 

  1. App Annie – Mobile app usage in Q2
  2. Appsflyer – App retention benchmarks
  3. Whatech – User retention study
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