Mobile measurement firm Adjust has launched a subscription-tracking service and found that people in the U.S. spend an average $20.78 a month on app subscriptions.
Subscriptions for apps and games have exploded during the pandemic, and many companies are benefiting from consumers’ increased willingness to subscribe to apps. More than a third of people in the country are using their smartphones to stream video and TV services every day.
Berlin-based Adjust is coming out with its subscription-tracking service as subscription services move well beyond Netflix to Disney+, health and fitness, investing, and other services. During the pandemic, companies like Disney are pivoting hard into streaming and subscriptions as a result of the shift in online behavior.
“Subscriptions are one of the key strategies that many of our clients are moving to,” Adjust VP Katie Hutcherson Madding said in an interview with VentureBeat. “The big transition to subscriptions began in 2018. Subscriptions were about 21% of revenue last year, or $4.6 billion in 2019. With COVID-19, we are seeing that grow even further.”
With its new service for subscription data, Adjust is doing some pivoting of its own, as its measurement business on iOS won’t be as easy after Apple curbs access to user-level data for mobile ad targeting. Adjust provides key mobile attribution measurements in performance advertising that allow advertisers to learn whether a specific ad caused a user to buy something in an app or game. To do that, it needs enough tracking information to make the connection.
But as Apple retires its Identifier for Advertisers (IDFA), that measurement will become very difficult if not impossible on iOS. And yes, Adjust is figuring out what it can do about this fundamental roadblock for its business. Adjust will still provide other services, such as Android mobile ad attribution and fraud protection, along with the new subscription service and “probabilistic” reports of user activity, said Hutcherson Madding.
Regardless of what happens with the IDFA, the subscription service will tell developers a lot of things they didn’t already know, Hutcherson Madding said. Up until now, developers might not have had access to a full overview of subscriptions and attribution data in one place. Hutcherson Madding said crucial pieces of the conversion funnel might have been missing or a developer could be working across multiple platforms to understand how subscribers discover or engage with their game or app.
With Adjust’s new solution, developers can now track all subscription events and revenue in one dashboard — giving them insights into all subscriber data so they can take action and boost return on investment (ROI) from subscriptions, increase subscriber loyalty, and reduce churn through engagement.
Adjust’s subscription-tracking product also promises to help marketers build accurate lifetime value (LTV) models that increase return on investment. Previously, marketers were missing access to important subscription data, which impacted their understanding of the user funnel, or how many people moved through the channel, Hutcherson Madding said.
She also noted that service subscribers may be more willing to share their identifier information than other users, based on the company’s initial research.
“We’ve been working with a ton of different clients at a global level to basically optimize something we’re calling a pre-permission prompt. We’re really focusing on our user experience expertise, giving our clients design tips in order to optimize toward that,” Hutcherson Madding said. “So we’ve seen for certain clients upwards of a 70% opt-in.”
That’s far better than the 20% opt-in many expect from users when Apple’s IDFA change takes effect. By combining subscription measurement with attribution data, Adjust can tell clients what marketing channels drive the longest-running and most valuable subscriptions. Marketers should then be able to invest far more accurately in user acquisition and run engagement campaigns that boost loyalty and prevent churn.
“We will be able to get the subscription-level data, which is what companies that offer subscription tracking standalone are able to do,” Hutcherson Madding said. “The real competitive advantage is when we can tie that data back to specific Facebook ad campaigns that drove this user to subscribe.”
Apptopia estimates that app-based subscriptions generated over $200 million in August 2020 alone, and many U.S. adults are planning to keep their subscriptions after the pandemic winds down.
Adjust also released the results of a survey of U.S. consumers that examined the intensification of subscription and streaming consumption on mobile devices. The research shows that 46.9% used smartphones to stream video/TV services during the pandemic, and they are increasingly doing so using subscription-based apps.
More than a quarter of millennials (those born between 1981 to 1996) and Generation Z (born between 1996 and 2015) consumers said they have stopped paying for other services in order to buy subscriptions on mobile app services (for example, subscribing to fitness apps over going to the gym). This compares to 17.9% of consumers overall.
And 25- to 34-year-olds spend the most on subscription apps — $25.85 dollars a month — while those over 55 spend the least at $13.97 a month. Streaming apps were the most frequently downloaded subscription-based app (30.7%), followed by gaming (9%) and news (4%).
Younger consumers lead the pack in mobile streaming, with Gen Z and millennials more likely to pay for streaming and on-demand entertainment services than any other generation. About 57% of millennials and Gen Z also said they had been using their smartphones more often to stream video/TV services while social distancing.
Consumers who subscribe to streaming and on-demand entertainment spend an average of $33.58 a month for those services, with Netflix, Amazon Prime, Hulu, Disney+, and YouTube TV listed as respondents’ top five favorite streaming services.
Adjust will offer complete visibility into subscription events without asking marketers to work across multiple dashboards or undergo complicated integrations. The launch forms part of the company’s wider mission to make marketing simpler, smarter, and more secure for the 40,000 apps working with the Adjust platform.
The survey was conducted by Censuswide on behalf of Adjust using a nationally representative sample of 1,003 TV/streaming customers aged 16 to 60 between September 23 and September 29, 2020.
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