Why Emotional Marketing Offers Greater Resonance Now Than Ever
With the economy in a state of flux, and federal interest hikes constantly on consumers’ minds, it’s no surprise that marketers are choosing to be more selective about where they spend their budgets. One area that isn’t facing a downturn is the e-commerce app industry, where marketing spend for attracting new shoppers to apps is expected to reach $5 billion. According to a new report by AppsFlyer, consumer spending on shopping apps climbed 37% in the fourth quarter of 2022, and emotional marketing is being shown to offer a greater resonance now than ever before.
AppsFlyer Industry Lead for eCommerce Sue Azari says the the impact of the economic downturn on advertising expenditure in the first quarter of 2023 has been substantial — perhaps even more so than many industry experts realized — but that doesn’t mean the impact on marketers budgets should be overlooked. Ecommerce marketers spent $4.9 billion attracting app users in 2022, even as threats of an economic downturn led to a 25% drop in spending in the second half of the year.
In order to better analyze the effects of the downturn, AppsFlyer’s analysts compared spending in the second half of 2022 to the second half of 2021, excluding the spike caused by the Omicron wave in early 2022. The results revealed a 25% decrease in spending in 2022.
“This decline can be attributed largely to a significant reduction in the cost of media, particularly on iOS devices. We observed a drastic year-on-year drop of more than 50% in the cost per install on iOS, compared to a 25% decrease on Android,” Azari says. “Surprisingly, however, the number of non-organic installs did not experience a significant change. This suggests marketers may not have fully seized the opportunity presented by the decreased media costs, and instead operated within a more restricted budget.”
Before the economic downturn, Azari says taking a growth-oriented approach would have meant intensifying acquisition efforts to take advantage of lower costs, however the current state of the economy has changed her recommendations. Azari now believes that marketers need to restore confidence in order to stay on their path to success.
“…The impact of the economic downturn on advertising expenditure in the first quarter of 2023 has been substantial, leading to budget cuts for marketers. However, the success of the 2022 holiday season — even in the face of a weakened global economy — should inspire greater confidence among marketers as they prepare for the upcoming holiday seasons,” she says.
Apps have established themselves as crucial channels for connecting with customers, and more ecommerce players are prioritizing “shoppertainment” to enhance the emotional aspects of the mobile shopping experience. With limited budgets, Azari says it’s essential that marketers carefully measure and validate the effectiveness of each campaign.
“Based on our data, e-commerce apps exhibited an average increase of 10% in revenue during the peak month of November 2022, despite the already prevalent economic downturn, compared to November 2021,” Azari says. “Taking a closer look at individual apps, 70% of the top 20 e-commerce players and 60% of the top 100 players observed year-over-year growth.”
Azari says she’s confident that positive trends will continue as economic indicators improve, leading to further expansion in the sector by year-end. The surge of mobile usage driven by the pandemic, along with the extensive availability of products and services, has also prompted more brands to prioritize mobile commerce, providing users with the ability to make purchases anytime and anywhere.
“E-commerce mobile apps have undergone improvements, offering users enhanced experiences through intuitive interfaces, personalized recommendations, and seamless navigation … [and] the shopping journey has become smoother and more enjoyable,” Azari says. “Overall, the positive trajectory in the mobile app sector sets the stage for mobile app marketers to embrace the upcoming holiday season with optimism and strategic planning, leveraging the evolving landscape of e-commerce and mobile commerce to maximize their success.”