Ad-funded versus subscriptions: 82% of revenue for non-game apps comes from subs offers

Just 36% of gaming app revenue is driven by subscriptions, while gaming apps see a drop in demand in eight months to March 2022.

More than 80% of revenue generated from non-gaming apps that offer a subscription comes from the subscription on average, finds new research, but across gaming apps with a subscription offer, just 36% of revenue is driven by opt-ins to a regular subscription.

Just over 2% of users that install non-gaming apps convert to a subscription (if it’s offered) within 30 days of install, but the conversion rate for gaming apps stands at just 0.2%. 

However, with market share of apps with subscription offerings heavily geared towards non-game apps, the much lower conversion rate is understandable, according to the research.

The State of App Marketing for Subscription Apps report from AppsFlyer and Liftoff found that apps in multiple categories are adopting subscription models as opposed to being purely ad-funded. 

More than one in 10 of those are gaming apps, but the lion’s share of the market comes from non-games – in categories like health and fitness, photography and entertainment.

Demand for iOS app installs across entertainment streaming apps surged year-on-year, by 13% in the year to March 2022, while remarketing conversion doubled on Android. Within Latin America demand soared by 113% and grew by 47% in India. Demand dropped in North America however, by 15% on Android and by 17% on iOS.

Gaming app installs on iOS dipped 18% between August 2021 and March 2022, with Android installs down 8% but non-gaming apps have hiked up by 25% since last November.

ATT opt-ins vary across non-gaming apps

The analysis of more than six billion app installs in the 14 months to March 2022 also revealed a 54% opt-in rate among users who saw the Apple Transparency Tracker (ATT) prompt in gaming apps with subscriptions. Amongst non-gaming apps the rate varied significantly across different territories, with opt-ins as low as 36% in Eastern Europe and as high as 54% in Latin America, while in North America, users are 32% more likely to opt-in on gaming apps compared to non-gaming.

The report also found that most apps are using the default 24-hour SKAdNetwork (Apple’s privacy-centric user tracking tool for advertisers) activity window, but this jumps among gaming apps, where 78% were found to be using the 24-hour window compared to 17% using the 72-hour window. Among entertainment apps the spread was more even, with half of those analysed opting for the 24-hour window and 25% each waiting 48 and 72 hours respectively. 

The report pointed to shorter activity windows enabling faster, but limited data collection, compared to longer windows that can offer richer data, albeit delayed access.

Shani Rosenfelder, Head of Content & Mobile Insights at AppsFlyer, said: “While app marketers are drawn to adopting a subscription pricing model because it allows them to better predict future income and enjoy a recurring revenue stream, in reality, it’s vital to understand that offering a subscription model is a major commitment.”  

Dennis Mink, SVP Marketing at Liftoff, added: “Subscription app marketers need to focus on long-term retention, given how challenging acquiring new subscribers can be. Best to start by optimising user acquisition campaigns for registration and subscription events, followed by re-engagement campaigns on Android, which can be incredibly effective.”