Yesterday, Blackberry unveiled a deal with Amazon to include the online giant's app store on its phones. In addition, Google Play and Apple's App Store both offer a million apps in their respective stores. As more apps flood the market, driving engagement rates among users has become a crucial component of an app developer's monetization strategy.But it is easier said than done. A rich user experience, combined with contextual engagement ads, are key to attracting loyal app users, according to experts. App analytics firm Fiksu reported its App Store Competitive Index reached 7.1 million daily downloads in March, a 41 percent increase year-over-year.
"Continued growth in app usage means more downloads, more launches and more time spent in apps, but at the same time, marketers are still hit with the challenge of attracting loyal app users," wrote Fiksu content and communications manager Jeremy Sacco, in a blog post.
Fiksu also reported a 20 percent increase in Cost per Install (CPI) in iOS compared to the same period last year, but only a 7 percent increase in Cost per Loyal User (CPLU), which the company defined as someone who opens an app at least three times.
This suggested that while marketers are spending more to acquire first-time users, they are becoming more efficient in engaging users, Sacco speculated.
App engagement is a lucrative business. Facebook rolled out mobile app engagement ads last year and startups like Adenda, Celltick and HomeBase show users app notifications and alerts on a smartphone's lock screen before a user even opens the app.
Twitter acquired the lock screen startup Cover in April, which learns when and where people use specific apps and displays them on the lock screen for easier access.
However, reminding consumers to use an app with a targeted ad or pushing it onto the lock screen is not enough. Apps need to offer relevant information and an attractive user experience, noted Forrester Research analyst Katyayan Gupta.
"Users don't want 'dumb' apps on their devices," Gupta wrote in a blog post. "Mobile apps need to leverage the power of social, cloud, analytics, and the powerful sensors embedded in today's mobile devices to deliver information that is useful in a user's moments of need."
In addition, the user experience should include an elegant design, ease of use and personalization capabilities, Gupta added.