Since the beginning of 2020, the whole world has been all about the outbreak of the coronavirus, also referred to as COVID-19. Labeled a pandemic on March 11, the epidemic affects practically every country and every individual, changing the way we interact, work, study, entertain ourselves, shop, work out, etc.
The mobile marketing industry has also experienced the effects of COVID-19. Social distancing policies and other restrictive measures imposed by governments globally make people isolate and look for ways to pass their time under quarantine. It’s not surprising that there’s been an uplift in daily hours spent in mobile across multiple countries:
Source: App Annie
In the chart above you can see the countries split into three phases. These are waves of the coronavirus spread with China being the most affected region.
We’ve decided to take a closer look at the impact of COVID-19 on Apple Search Ads specifically, taking into account the phases of the coronavirus spread. We can’t research China, because obviously Apple Search Ads is unavailable there. So we focused on the following storefronts:
- The 2nd phase countries affected: South Korea (KR), Japan (JP) and Italy (IT);
- The 3rd phase countries affected: the US, the United Kingdom (UK), Spain (ES), France (FR) and Germany (DE).
The research is aimed to:
1. Understand how the coronavirus outbreak has affected key Apple Search Ads metrics (Downloads, CPA) in different regions, especially the worst–hit countries;
2. Understand how the outbreak has affected user behavior in different categories (Games, Work from Home, Photo & Video, etc.).
3. Check whether there is a growth in the usage of entertainment and remote collaboration apps;
4. Confirm the expected dramatic drop in the usage of travel apps and booking apps for offline events.
To understand the impact of the coronavirus on Apple Search Ads, we’ve researched 6 category groups:
- Work from Home: Education, Business, Utilities
- Photo & Video
- Health & Fitness
- Travel, Transportation, Booking
If you feel like comparing your performance with Apple Search Ads Benchmarks in Q2-Q4 2020, get our free report:
- The 2nd phase countries (KR, JP & IT): 36 apps, 14.4M impressions, 249K downloads.
- The 3rd phase countries (US, UK, ES, FR & DE): 67 apps, 36.5M impressions, 821K downloads.
While being under quarantine, people seek ways to stay entertained and connected. As expected, games appeared to be one of the key ways to pass time while social distancing.
So, in Gaming, we’ve seen a significant increase in Downloads in both country groups. They follow the same exponential trend, but the countries most affected by COVID-19 are the bigger game downloaders. See for yourself:
From the charts above, you can see that a huge uplift in downloads starts at the beginning of March 2020 for both country groups.
South Korea (SK), Japan (JP) and Italy (IT) have downloaded remarkably more games compared to the 3rd phase countries: the boost in Downloads is 60% against 27% respectively.
We’ve also looked at the changes in Cost per Acquisition (CPA) in the Gaming category for both country groups.
In the 2nd phase countries, CPA has slightly increased by 10-20%, which is likely to result from more aggressive bidding strategies that publishers are adopting. Companies are aware of the situation and understand that they can seize the moment. Therefore, UAs are increasing bids, which intensifies the competition:
As for the 3rd phase countries (US, UK, ES, FR, and DE), the current CPA trend is stable. While people are downloading more games, advertisers don’t raise their bids.
However, this is just a matter of time: publishers are likely to start raising their bids to win users, which may bring about an increase in CPA. But until this occurs, there is an opportunity to scale to these storefronts.
Scaling Apple Search Ads for gaming publishers is usually hard, but this is the perfect time for them to try that. Moreover, it makes sense to plan marketing activities in these storefronts now, as it can result in a major further boost.
2. Work from Home: Education, Business, Utilities
- The 2nd phase countries (KR, JP & IT): 27 apps, 21.3M impressions, 789K downloads.
- The 3rd phase countries (US, UK, ES, FR & DE): 50 apps, 47.4M impressions, 2.1M downloads.
With social distancing policies introduced due to COVID-19, multiple companies had to make the switch to remote working for their staff. Consequently, the demand for work from home apps has significantly boosted, and “Zoom” has become the defining app of the pandemic period.
We took a look at Downloads in this category for the two country groups to find out that in both 2nd and 3rd phase countries the number of Downloads has grown by 120%. As of the end of March, the number of Downloads has more than doubled compared to the period before the coronavirus outbreak.
Average CPAs for the period are $0.79 and $1.72 in the 2nd and 3rd phase countries respectively. Cost per Acquisition has barely changed, even decreased by 10-15%, which hasn’t been caused by the increase in auction bids but rather by the natural boost in search traffic:
3. Photo & Video
- The 2nd phase countries (KR, JP & IT): 10 apps, 1.2M impressions, 86.3K downloads.
- The 3rd phase countries (US, UK, ES, FR & DE): 36 apps, 4.5M impressions, 270.1K downloads.
Social distancing doesn’t prevent users from downloading apps in the Photo & Video category.
In the 2nd phase countries, we’ve seen a significant 80% growth in the number of Downloads. While being confined to their houses, users are likely to look through vacation photos they took before, edit them and upload to social media.
Since online communication is switching from text-based to visual, social distancing increases the popularity and adoption of Photo & Video apps:
The average CPA in the 2nd phase countries has been up by 21%, meaning that the industry is quickly adapting to changes caused by COVID-19 and publishers are advertising more aggressively.
Let’s move on to the 3rd phase countries. The number of Downloads there has grown by 15%, while CPA has dropped by 5%. As you can see, COVID-19 has barely impacted the Photo & Video category in these countries, but growth is likely to occur in the near future.
4. Health & Fitness
- The 2nd phase countries (KR, JP & IT): 27 apps, 5.5M impressions, 220.4K downloads.
- The 3rd phase countries (US, UK, ES, FR & DE): 36 apps, 16.2M impressions, 840K downloads.
We discovered that the downloads trend for the 2nd phase countries follows a U-curve: a sharp decline at the beginning of the outbreak is followed by a sharp increase from March 2020:
What are the possible reasons for the U-curve?
Firstly, it is likely that some publishers in this category have chosen a moderate advertising strategy and lowered their budgets. Secondly, other publishers may have modified their strategy, in other words, they reconsidered their apps positioning, for example, from regular fitness to home workout apps.
Overall, the average number of Downloads in the 2nd phase countries has decreased by 25%, while CPA has dropped by 42%. The drop is more likely to be caused by the previous holidays – Christmas and New Year. The post-holiday season is a peak time for fitness apps as many people make resolutions to work out and lose weight. Given this circumstance, the influence of COVID-19 on the decrease in downloads is not so big.
As for the 3rd phase of countries, Downloads have dropped by 17% and CPA by 38%:
We’ve also found out that the popularity of mindfulness and meditation apps has grown, meaning that people seek ways to cope with anxiety caused by the coronavirus outbreak.
Publishers in the Fitness category who manage to quickly adjust their positioning to the needs of users have a good chance of winning a large market share.
A/B tests can help a lot when you make product decisions. Even before the development and release of a new feature or product, you can run A/B experiments with rebranded assets and understand whether the repositioned product can resonate with your audience. You can save your resources – time and money – by using the SplitMetrics platform.
- The 2nd phase countries (KR, JP & IT): 6 apps, 3.3M impressions, 35.6K downloads.
- The 3rd phase countries (US, UK, ES, FR & DE): 9 apps, 3.6M impressions, 56.2K downloads.
The sample size is based on apps linked to SearchAdsHQ. The limited number of financial apps may affect the accuracy of data.
In the financial sector, we’ve seen the rise of such financial instruments as investments in stocks, as well as e-wallets and wire transfers.
As seen from the trends below, the average number of financial apps Downloads in the 2nd phase countries has increased by 150%. At the same time, CPA in South Korea, Japan and Italy has grown by approximately 35%, which indicates that traffic and competition are growing.
We’ve seen a slower increase in Downloads (compared to South Korea, Japan and Italy) in the 3rd phase countries – by 67%:
As for Cost per Acquisition, it has barely altered, hovering around $6.3:
We dug deeper into the data to discover that the growth was mainly due to the US (in the 3rd phase group) and Japan (in the 2nd phase group). It turns out that advertisers are allocating bigger budgets for these segments, which is coupled with an increase in the popularity of financial apps.
As for Europe, publishers of financial apps don’t follow aggressive advertising strategies there, which can be attributed to industry regulatory restrictions.
Given the data above, it makes sense to try winning the US market with your financial app.
6. Travel, Transportation, Booking
- The 2nd phase countries (KR, JP & IT): 5 apps, 261K impressions, 29K downloads.
- The 3rd phase countries (US, UK, ES, FR & DE): 12 apps, 3M impressions, 150.4K downloads.
The sample size is based on apps linked to SearchAdsHQ. The limited number of Travel, Transportation and Booking apps may affect the accuracy of data.
In the 2nd phase countries, we can see a significant decline in the number of Downloads. It has decreased by a factor of three during the period under research, making up only 33% of the Downloads number as of the beginning of January.
At the same time, the average CPA in the category group has decreased by 55%.
Obviously, publishers in Travel are aware that the demand for their apps is going to fall sharply, so they choose a moderate acquisition strategy: they cut their Apple Search Ads budgets in the 2nd phase countries.
Budget cuts and the decrease in search traffic in these countries result in such a significant drop in the number of Downloads. Regardless of the limited sample, we can still predict that the downtrend will hold true for the entire Travel segment.
As for the 3d phase countries, the decrease in Downloads is not that significant, having dropped by 25%:
The average CPA in Travel, Transportation, Booking has also declined, by about 51%:
Obviously, the decrease in the 3rd phase countries lags behind the decline observed in South Korea, Japan and Italy. However, advertisers are already cutting their budgets, getting ready for tough times.
In addition, a moderate fall in the 3rd phase countries may result from the fact that ride-sharing apps had been in big demand until the restrictions on movement were imposed. The popularity of these apps balanced out the fall in other niches.
1. It’s likely that the majority of the App Store publishers who run Apple Search Ads won’t be severely affected by the changes in user behavior resulting from COVID-19.
Publishers in Games, Business, Education, Entertainment, Photo & Video will only benefit from the crisis since users are increasing the usage of apps belonging to these categories.
Such categories as Travel, Booking and Transportation will be negatively affected.
2. In the 2nd phase countries, we can observe significant changes in Downloads and Cost per Acquisition. Tougher restrictive measures imposed by governments in South Korea, Japan and Italy due to the COVID-19 outbreak influenced the behavior of the App Store users and impacted Apple Search Ads.
3. COVID-19 had a significant positive effect on Games (the usage of apps has increased by more than 160%), as well as Business and Education (where the usage of apps increased by up to 200-300%).
4. The Finance category has seen the rise of stock investments, e-wallets and wire transfers. The number of Downloads has grown by 150% in the 2nd phase countries, while CPA in these countries has risen by approximately 35%.
The growth is mainly due to the US (in the 3rd phase countries) and Japanese (in the 2nd phase countries) Apple Search Ads storefronts. Along with the increased popularity of financial apps, publishers in this category began to allocate a bigger advertising budget for the US and JP storefronts.
Meanwhile, the growth in Europe is insignificant, which is possibly caused by the financial industry regulations.
5. Publishers in the Fitness category who manage to make quick changes in their positioning will be able to win a large share of the market.
For South Korea, Japan and Italy, the Downloads trend follows a U-curve: a sharp drop at the beginning of the coronavirus outbreak is followed by a sharp increase from March 2020.
This can be partially attributed to the lowered advertising budgets and moderate strategies that some advertisers have chosen. Other publishers have modified their positioning from regular fitness apps to home workout apps.
We’ve also seen the popularity of mindfulness and meditation grow.
6. As opposed to text-based communication, visual communication keeps gaining momentum. When in isolation, users continue downloading Photo & Video apps, which is reflected in an increase in downloads by 80% in South Korea, Japan and Italy.
The essence of the visual content has changed though: there are more cats, selfies, and vacation memories.
7. Travel, Transportation and Booking are experiencing a sharp decline in popularity. Additionally, publishers in these categories opt for a more moderate strategy and cut their Apple Search Ads budgets. The number of Downloads has decreased by a factor of 3, and bids have more than halved.
Hopefully, our research on the impact of COVID-19 on Apple Search Ads will give you a better understanding of the industry changes.
For more performance and cost benchmarks (TTR, CR, CPT and CPA), trends and tips, get our Apple Search Ads Benchmarks Report Q2-Q4 2020.