The mobile marketing industry has been growing at a rapid pace in recent years, with more and more businesses investing in mobile advertising to reach their target audience. The US mobile advertising market size is projected to grow 10.8%, reaching $393.4 billion in 2024. This year ad spending on mobile has already surpassed spend on desktop at 51% versus 49%. However, the economic status of the United States has had a significant impact on the mobile marketing industry.
Find out how the economy has changed the mobile landscape and the strategies mobile marketers can implement to use these changes to their advantage.
Changes in Consumer Spending Post Pandemic
The COVID-19 pandemic has had a massive impact on the global economy, and the United States has not been spared. With millions of Americans losing their jobs, businesses shutting down, and consumer spending declining, the economy has been in a state of flux.
The impact of the economic downturn on the mobile marketing industry can be seen in several ways. First, businesses that have been hit hard by the economic downturn are cutting back on their advertising spend, including their mobile marketing campaigns. With less money to spend, businesses are being forced to analyze which marketing channels to prioritize.
Second, consumer behavior has also changed as a result of the economic downturn. With less disposable income, consumers are more likely to cut back on unnecessary expenses. This means that they are evaluating where and what costs are truly important to them. They are also choosing to stay home and spend more time on their devices rather than spend money on expensive dinners or trips.
Rather than fighting these changes in consumer behavior, mobile marketers need to iterate and experiment with new advertising techniques that may resonate with their target market.
How to Take Advantage of Changes in Consumer Behavior
Economic-related changes in consumer behavior aren’t necessarily negative when it comes to app marketing. An increasing number of consumers are working from home, relying more on mobile devices rather than their desktops, and being more conscious of overall spending. From 2016 to 2022, smartphone usage expanded at an annual growth rate of 10.4%, showing expansive landscape of mobile marketing.
By making mobile marketing a top priority, capitalizing on rewards and loyalty programs and doubling down on re-engagement initiatives, app marketers can use the changes that the pandemic brought to their advantage.
Making Mobile Marketing a Top Priority
Cutting down unnecessary spending comes hand in hand with economic downturns. CFOs want to make sure they are constantly maximizing their return on investment and limiting any costs that aren’t driving revenue. However, cutting mobile marketing spending can actually hurt the wellbeing of a brand.
On average, US adults spend five and a half hours daily on their mobile phones. Additionally, in 2022, mobile phones generated 60.66% of website traffic, while desktops and tablets were responsible for 39.34%. Because of this increased use of mobile devices across generations, deploying marketing messaging on these platforms is the best way to drive engagement and retention.
Mobile marketing initiatives allow marketers to reach their audience anywhere and at any time. It is the fastest way to communicate with consumers and get a brand's message out immediately. It’s also significantly cheaper compared to traditional marketing techniques. Ad clicks coming from mobile are 24% cheaper than those coming from desktop. In times of economic uncertainty, marketing techniques that are cost effective cannot be overlooked.
Frugal Spending Habits
The global pandemic has created a tsunami effect of layoffs and uncertainty in our economy. Because of this uncertainty, consumers are more conscious of their spending than ever before. Consumer spending is forecasted to drop at a 0.5% annualized rate in the second and third quarters of 2023, the first back-to-back quarterly decline since early 2020.
However, despite the forecasted drop in overall consumer spending this year, app spending has actually been growing. Mobile consumers spent an astounding $34.1 billion in app stores in Q1 2023, marking the highest quarterly spending on record. App marketers can capitalize on this spending by pushing for their users to join subscriptions. They can also encourage them to purchase tokens within an app in order to improve their experience. Loyalty programs are a great way to ensure consistency with a user base and keep them motivated to keep frequenting the app.
Invest in Retargeting Campaigns
Investing in retargeting campaigns not only increases app engagement and retention, but also drives overall revenue for a brand. Retargeting campaigns help increase overall engagement by reminding users of key features, new updates or exciting rewards that can be accessed within an app. By being consistent with retargeting campaigns, brands can save money and convert more free users into paying ones.
Acquiring a new user can cost five times more than retaining an existing one. Additionally, increasing customer retention by 5% can increase profits from 25-95%. The success rate of selling to a current customer is 60-70%, while the success rate of selling to a new customer is 5-20%. By investing in re-engagement technology, brands can hit their revenue goals without spending excessive budget on user acquisition campaigns.
Takeaways of How Retargeting Drives ROI Post Pandemic
The US mobile advertising market size is projected to grow 10.8%, reaching $393.4 billion in 2024. However, the economic status of the United States has had a significant impact on the mobile marketing industry. Here, we outline how the changes in consumer behavior affect app marketer’s overall growth strategies.
- Making Mobile Marketing a Top Priority: On average, US adults spend five and a half hours daily on their mobile phones. Mobile marketing initiatives allow marketers to reach their audience anywhere and at any time. It’s also significantly cheaper when compared to traditional marketing techniques.
- Frugal Spending Habits: Despite the forecasted drop in overall consumer spending this year, app spending has actually been growing. App marketers can capitalize on this spending by pushing for their users to join subscriptions. They can also encourage them to purchase tokens within an app in order to improve their experience.
- Invest in Retargeting Campaigns: Investing in retargeting campaigns not only increases app engagement and retention, but also drives overall revenue for a brand. By being consistent with retargeting campaigns, brands can save money and convert more free users into paying ones.