In partnership, AppLovin and AppsFlyer took a look at data from over one billion devices worldwide and analyzed the growth of mobile video and how effective it is at retention for app installs globally and cross-platform. AppsFlyer U.S. General Manager is Paul Grueber (pictured left).
Mobile video ads aid retention by as much as 40%.
Retention is a crucial metric for publishers because it measures an app’s stickiness. The companies found that mobile video is the fastest growing advertising format — to the tune of 190% growth in the first three quarters of 2015 — and is up to 40% more effective at user retention than non-video ad formats. Additionally, in terms of retention for gaming apps, video ads on iOS outperform those on Android.
A Business Insider Intelligence report from December 2014 estimates that mobile video ad revenue in the US will top $4.4 billion in 2018, up by a five-year CAGR of 73% from 2013, and grow five times faster than desktop video ads. A slightly more conservative eMarketer study from June 2015 predicts that mobile video revenue will grow three times faster than that of desktop throughout the year 2020. But no one is debating that the fact that mobile video has tremendous momentum.
Between AppLovin and AppsFlyer, the two companies have access to hundreds of billions of data points detailing the usage and retention of mobile users.
To examine the growth, we looked at video ads as a total percentage of our advertisers’ spend, over a network that processes 100 TB of data a day, and hundreds of millions of dollars of advertiser revenue annually. The eight months of AppLovin data analyzed represents billions of data points, from AppLovin’s internal DSP (demand side platform) and from RTB (real-time bidding) exchanges. This included both gaming and non-gaming apps.
Because the hyper-competitive gaming vertical is so focused on keeping players playing, we used this vertical to look at retention. We analyzed over 300 million gaming app installs across hundreds of gaming apps running on hundreds of ad networks, and we recorded the effectiveness of each app install and isolated video ads and compared them to other formats. We calculated the normalized retention rate by looking at the unique number of users who were active on days 1, 7 and 30 out of the total number of unique users who first launched the app in the selected time frame: July 1 through August 31, 2015.
The Results: Unprecedented Growth
Industry reports project massive growth for the mobile video ad format, and a review of the AppLovin network to highlight the spending of major mobile advertisers corroborates this: