Data Snack: As finance apps’ ad spend soars, their conversion rates are declining
- The average ad spend on an app store by a finance app rose by 51% between 2020 and 2021, crossing the half-a-million dollars mark.
- Conversion rates for finance apps fell across the App Store from 6.8% to 5.8%, and Google Play Store from 60% to 55%.
The proliferation of fintech services into American consumers’ financial lives started building before 2019, but the pandemic dramatically accelerated the trend. Today, digital financial services claim 88% of U.S. consumers, challenging the 95% that traditional banks claim. In this environment, AppFollow’s new study reports on how the finance category is performing in terms of user engagement and satisfaction across the App Store and Google Play Store.
“The category is growing like a jungle,” the app store optimization service found.
The finance category saw a trend of rising downloads between Q1 2020 and Q1 2021, as they increased from 5.9% to 18.6% on the App Store, and 5.4% to 17%.
In addition, the number of apps in the category with over 10,000 downloads a quarter rose by 21% between Q4 2020 and Q1 2021. Much of this can be attributed to financial services’ increase in ad spend, as competition in the space grew over the past two years. Average spending went up by 51%, to more than half a million dollars. The cost-per-install across the industry rose by 46% between Q3 2020 and Q2 2021.
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Consequently, conversion rates for finance apps fell in both the stores between 2020 and 2021. As an increasing amount of providers compete for the same pool, customer acquisition generally becomes more expensive.
A breakdown of financial apps into the niche functions they serve — like saving, investing, and paying — helps gauge how conversion rates changed across the market.
Except for mobile banking, finance apps generally saw a decrease in conversion rates:
- Mobile banking platforms’ CR increased from 59% in 2020 to 62% in 2021
- Personal finance platforms’ CR remained at 50% across 2020 and 2021
- Mobile payment platforms’ CR fell from 51% in 2020 to 50% in 2021
- Cryptocurrency platforms’ CR fell from 44% in 2020 to 42% in 2021
- Investment platforms’ CR fell from 50% in 2020 to 47% in 2021
The report suggests that the decrease in conversion rates can be viewed in the light of ad spend, and the general rise of interest in finance apps.
Another factor that could drive page views could be the increase in the general attention around financial offerings. Today, there is significant media interest in digital finance tools, with social media also becoming a hub for such hype — this could get more people searching up for what’s available in the market. Perhaps some people are researching with less of an intent to download – more to just feed their curiosity. The report speculates that such users may be harder to convince than early adopters.
How can apps improve performance on app stores?
The average rating by stars for financial apps, which is driven by customer satisfaction, stood at 4.7 for the App Store, and 4.2 for Google Play Store. The average rating in terms of reviews, which is driven by user complaints, stood at 3.7 for the App Store, and 3.8 for Google Play Store.
Any strategy to improve customer experience and ratings on stores has to start from reviewing customer feedback. The most common topics that customers wrote reviews for fell into four categories: reporting a concern, bugs, monetization, and user feedback.
Reports of bugs dominated the reviews, indicating that financial apps could turn focus to their services, improving their products’ technical performance, to create smoother customer experiences. The second most significant factor is monetization — consumers don’t like hidden fees. Across niches, users complained about poor customer service or dissatisfactory onboarding processes.