Have you been noticing an influx of subscription-based apps making their way into the app store lately? The trend of apps relying on subscription-based models is on the rise and has led to recent developments in the iOS App Store that provide advertisers with enhanced features that are reshaping the mobile app world as we know it. So let’s take a look at these changes and how you can apply them to your marketing strategy.
Imagine registering for multiple subscriptions all in one platform and never having to return to your in-app settings to make changes again. Now you can, and not only is this beneficial to users because of the ongoing services and features that are right at their fingertips, but advertisers can take advantage of the predictable recurring revenue from auto-renewed subscription payments.
The subscription process is now streamlined within the iOS App Store, where user payment information is collected and saved in the store itself and doesn’t require the user to take additional steps to subscribe in-app. Instead, the stored information is leveraged across multiple apps to automatically renew each subscription from the App Store. Advertisers are able to apply that billing information saved in the App Store to automatically renew subscriptions at the end of each duration period, until the user decides to cancel it.
This auto-renew feature drives higher user lifetime values by making it easier for users to subscribe to and maintain services for their favorite apps all within the same platform, without the hassle of executing these tasks within each individual app.
Enriching content, relevant design, and quality user experiences are essential features for a successful subscription-based model. Users who sign up for subscription-based apps are more actively invested in making sure they get as much from the app as possible to merit the recurring payments. In order to sustain these subscriptions, advertisers must align with users’ needs and preferences by regularly expanding content, enhancing features, and updating services.
Apple has also made managing subscriptions as effortless as possible, allowing users to oversee each of their subscriptions all from within their account settings in the App Store. Users can move between service levels to upgrade, downgrade, or crossgrade subscriptions as often as they like. Service changes can go into effect either immediately or at the next renewal date, to ensure there is limited delay in the user’s subscription experience. Advertisers can leverage this feature by keeping their subscription offerings simple and straightforward, to encourage users to make their choices more easily.
But we’ve skipped over the most crucial step: how can advertisers acquire new users to subscribe to their apps? Apps using auto-renewable subscriptions have the ability to offer a discounted price or free trial at the beginning of a subscription within the iOS App Store. Providing users with a limited trial or discounted price entices users to subscribe to your app and evaluate its content – if the user enjoys their experience, then they are more likely to allow the subscription to auto renew at the end of the trial period. It’s important that you clearly and consistently communicate your subscription message, so that users can better recognize the value of the offer you are providing them. This also goes for users of your free, basic service; make them aware of the benefits they could receive if they subscribe to your premium service. Keeping these messages simple and requiring only necessary information at sign up will improve your conversion rate.
As a reward for advertisers who are able to maintain users’ subscriptions for over a year, Apple has implemented a unique structure that increases your app’s revenue from 70% to 85% of the subscription price. What does this mean for you, as the advertiser? After a subscriber has accumulated one year of paid services, you receive an additional 15% of the subscription price at each billing cycle, not including applicable taxes.
Analyzing the performance and live metrics related to subscriptions can help advertisers optimize campaigns for top results. Receipts for auto-renewable subscriptions include real-time information about the status of user subscriptions, determining whether a subscription is currently active, renewed, lapsed, or expired. Access to this information can help advertisers identify opportunities to communicate with users and customize messaging that encourages resubscriptions, or promotes different service levels or content offerings.
Advertisers can gain an understanding of how subscriptions are performing with the use of Sales and Trends in App Store Connect. You can assess A/B testing with multiple introductory pricing types, evaluate the effectiveness of each offer, and compare retention rates across select territories and durations. These analytics provide advertisers the insight needed to make better improvements to their app or offers to drive quality campaign performance and overall success.
Where have we seen the highest rate of success for this subscription-based model? Streaming, including music and entertainment, and productivity apps. More gaming apps are also starting to test subscription options. These verticals provide services and offers that are better suited to maximize the subscription-based model, exchanging recurring subscriptions for quality content, utilities, and even unlocking new game features and levels.
Want to learn more about how subscription-based apps are shaping the mobile industry? Start here to receive our latest findings, including case studies, user flows, and more!
About AdAction Interactive
Driving 300+ million installs since May 2013, AdAction is the mobile app industry’s leading performance-based marketing platform with over 320% average year-over-year growth. Our team of experts deliver over 6 million monthly conversions for Fortune 100 companies and elite agencies, including exclusive partnerships with top media sources around the world.