The rise of on-demand apps
In the digital-first world, consumers have become accustomed to convenience and immediacy. From streaming services and food delivery, to e-commerce and comparison sites, our needs can be fulfilled with just a few clicks on a smartphone. The online on-demand economy has grown tremendously since it began, with a compound growth rate averaging 10.92% annually. Today for example, it’s estimated that over 50 million people regularly use food delivery apps in the USA alone.
In more recent years, increased competition in the app space has led to a gradual but inevitable plateau in market penetration. This means that on-demand apps are forced to make more strategic marketing decisions to ensure customer growth and revenue. On-demand apps are rich in customer data, which makes in-app retargeting an extremely powerful and precise marketing channel. By working with a trusted DSP like Remerge, you can use your app's data stream to inform your retargeting efforts and run highly-targeted, performance-driven campaigns.
Why you should combine user acquisition with retargeting
Advertising an on-demand app requires a two-prong approach. The first stage is user acquisition (UA), in which your ads typically focus on conveying brand awareness and product benefits to potential customers who haven’t yet downloaded your app. A new install however is only the first step, because it does not guarantee that the user will use your app or make a purchase. Reports have shown that in 2024, 46.1% of all downloaded apps were uninstalled within the first 30 days.
Because revenue and retention is the key to success, the next stage of your marketing strategy should involve retargeting campaigns. Retargeting is when you show ads to your existing users who have already installed your app. By segmenting these users into groups based on their in-app behavior, you can present them with highly tailored messaging that encourages them to perform specific actions – such as registering an account after the installation, using certain features within the app, or making first-time and recurring purchases. This helps to move users through your sales funnel and reduce customer churn. It also helps to drive retention, in-app engagements and revenue events.
Four key tips for app retargeting
The traditional approach to retargeting is to segment users according to where they are in your sales funnel, then run ads with tailored messaging to move each group closer to the point of purchase. This approach addresses key stages across the user’s journey and can be scaled to your whole user base - but there are many other user signals that app businesses can use to improve their ad performance and return on ad spend (ROAS). Here are four key things you should consider for your retargeting campaigns:
1. Timing
On-demand apps are used spontaneously by their customers – but this doesn’t mean their behaviors are hard to predict. By analyzing your existing user’s purchasing history, you can retarget them with ads in anticipation of peak sales windows. A food delivery app for example can drive up sales by retargeting its users shortly before meal times. Pair that with a sense of urgency, (like offering them a discount on their favorite restaurant if they order before 7pm) and the user is much more likely to make a purchase within your app.
2. Location targeting
In-app retargeting allows you to retarget your existing users based on their location. Although segmenting your audience to target specific geographic areas can be somewhat time consuming, there are many ways that on-demand apps can benefit from it. For example, people living in an area that is relatively underserved by supermarkets or public transport may be more inclined to purchase from on-demand apps that deliver groceries or offer mobility services - such as car hailing and bike rental.
3. Personalized recommendations
On-demand apps with a wide range of products (such as shopping platforms), can leverage their user’s previous purchases to recommend items that they might wish to buy in future. You could target users with ads for a product that they’ve viewed before but never purchased, or you might advertise a product to them that they’ve bought a few times in the past and may wish to buy again. You could even show your users entirely new products that have proven popular among other users with similar attributes and purchasing behaviors.
4. Dynamic product ads
Dynamic product ads (DPAs) can connect to your app’s ‘product catalog’ and automatically populate itself with relevant product recommendations based on the attributes of the user who is being retargeted. This means you don’t need fresh ad creatives and copy for each product ad, because the information is pulled directly from your app. You can even use deep links in your DPAs so that when a retargeted user clicks on the ad, they will arrive directly at that specific product within your app. This allows for a much shorter user journey as the user does not have to manually search for the product in your app.
Summary
Marketers tasked with promoting on-demand apps must advertise strategically to drive revenue in an increasingly competitive marketplace. UA campaigns are crucial for growth, but retargeting remains the best way to retain users and increase their customer lifetime value. For on-demand apps, programmatic in-app retargeting is one of the most powerful channels. By working with a trusted DSP like Remerge, on-demand apps can connect their in-app event data with their retargeting efforts, allowing them to leverage real-time customer insights like purchasing habits, current time or current location. Doing this enables app businesses to identify and retarget their existing users with personalized ads that convert more effectively.
For specific examples of how we've helped different app businesses with their retargeting strategies, check out our case studies here.
