Germany has long been regarded as the economic engine of continental Europe and is now developing into a global powerhouse in the mobile and app market. More importantly, it’s home to Europe’s biggest app donors.
New data from Sensor Tower, a company that provides market intelligence and analytics for the mobile app economy, shows Germany has risen to become the Number two market in Europe for app expenses. At $3.4 billion in 2021 (up 22.5% year-on-year), Germany came in a close second behind the UK, which reported $3.5 billion in user spending. In total, European consumers spent $18.3 billion on the App Store and Google Play in 2021.
Significantly, Germany was also home to the biggest spenders on Android. According to Sensor Tower, revenue generated from the Google Play app store led the European field, generating $1.8 billion, or nearly 22% of the total.
“Reaching new highs in key metrics, including consumer app spend and time spent in app, cements Germany’s leadership position in the ever-changing mobile app industry,” said the author, mobile consultant and experienced marketer Markus Waechter tells me in an interview. “Fortunately, consumer appetites for mobile devices and apps are as great as they are deep, opening up opportunities for all players who can unburden everyday life.”
A wealth of possibilities
The upside potential of mobile revenue in the market is also increasing. Advertising budgets have grown in double digits (10.4%), defying the pandemic and positioning Germany as the fastest growing Western European country in the category. Mobile devices and apps accounted for the lion’s share of spend 69.2% of the digital ad market, or $7.49 billion.
Understandably, mobile app marketing and retargeting platform Liftoff saw a place for it Mobile Hero program in Germany. Along with practical advice on mobile creative strategy, A/B testing, and how to boost results in a privacy-centric market, the program spotlights the marketers, or “heroes,” behind the country’s top-performing apps. [Disclosure: Liftoff retains my services as an online talent, producer and content consultant.]
The development of Germany’s mobile gold mine requires regional know-how. To help foreign companies demystify this exciting yet complex market, I recently spoke to three of Germany’s top recognized mobile marketers Mobile Heroes for their marketing services.
#1 Build consumer trust with expertise
Germany, which was once slow to embrace digital health, is changing rapidly, creating many opportunities for companies ready to meet consumer demand for guidance and health advice since the pandemic began. Another driver is the Digital Healthcare Act, which allows doctors to prescribe digital health apps to patients, offer online video consultations, and issue e-prescriptions — and receive reimbursement for doing so. It is a combination of favorable market conditions that have been triggered record investments in healthcare companies and apps.
One of the winners’ companies is based in Berlin Good health, which recently closed a $90 million Series B Funding round led by Leaps by Bayer, the impact investment arm of German multinational pharmaceutical giant Bayer AG. “In a pandemic, people want to actively manage their health on their own terms and make a personal assessment based on their individual conditions, risk factors and symptoms,” Stas Rosenbaum, Director of Growth at Ada Health, tells me in an interview. Ada was founded by physicians, scientists and industry pioneers to create new possibilities for personal health.
“Campaigns that communicate our core values of medical expertise, accuracy, and a neutral approach resonate with our users,” says Rozenbaum. “Now the focus is on storytelling and branding to reinforce positioning and drive performance.” Rather than relying solely on paid campaigns to spread the word and fill the user acquisition funnel, Rozenbaum has the focus and investment on the App Store Optimization (ASO) relocated. By building a team and using app store landing pages to test logos, colors, tone of voice, and search terms, Rozenbaum has grown organic app installs from 40% to 70% in just over a year, and the proportion of Keywords increased by more than 4x.
His advice: “Team up with experts to inspire trust and build a brand.” Our users in Germany, he adds, tend to be drawn to brands that combine expertise and empathy. So make sure to focus on metrics down the funnel to drive connection and conversion.
#2 Get to know the preferences of local audiences
Lockdown opened up new opportunities for apps and services that make shopping for everyday essentials easier. A result was a 67% increase in online food orders in 2020 compared to the previous year, according to the German E-Commerce and Mail Order Association (bevh). The other was the emergence of a new megatrend of ultra-fast food delivery. The avalanche of demand for quick trading options Stores pushed to their limits, forcing some to hire additional staff and others to put tens of thousands of newly registered households on food delivery waitlists.
This perfect storm of conditions paved the way for gorillas, an on-demand grocery delivery startup looking to take a risk and win big. The company recently “nearly $1 billion” in new investments, bringing the valuation to $3 billion. Not bad for a company founded at the height of lockdown in May 2020 with a promise to deliver groceries within minutes of ordering.
According to a survey by the German daily mirror 46.9% of German city dwellers are familiar with gorillas. That’s strong brand awareness Moritz Fritzen, Gorilla’s Global Brand Manager, writes a strong focus on localization. “Local preferences have always been strong in Germany,” Fritzen tells me in an interview. “There are big differences from north to south and east to west, and marketers who want to be successful here need to do their homework to understand all the factors, from dialects to delicacies, that customers care about.”
It also helps keep abreast of local trends by building deep relationships with the local community, Fritzen says. “Having a local range and local suppliers has been a priority for us from the start and this has also helped accelerate the uptake of our service.”
His advice: “Connect with cool local influencers and work together to establish a sustainable brand strategy that’s local and customer-centric.” He says the approach has enabled Gorillas to launch brand marketing activities in nine new ones in the last 12 months to start markets. “It’s about differentiating ourselves from competitors and driving growth through the value we bring to our entire community.”
#3 Consumers don’t buy a brand purpose, but they expect it
After almost two years of upheaval, the global fashion industry is finding its footing again. In Germany it is Number 5 market for fashion e-commerce worldwide (with a turnover of 23 billion US dollars or about 25% of the entire German e-commerce market) there is a strong headwind and good prospects. research company McKinsey reports Sales of non-luxury items are expected to surge in 2022 after pent-up demand due to the pandemic. The revenue increase is being driven by a modest economic recovery in Europe and a massive shift to online shopping destinations and apps.
“The Germans are more open than ever to online and in-app shopping, but also sensitive to issues such as sustainability,” Caroline Schlunsen, Channel Lead App Marketing at the e-commerce retailer ABOUT YOU, in an interview. “This is the new normal that marketers need to be aware of, and it will continue to play an important role in purchasing decisions.”
And she’s right. According to this, almost a third of German consumers are willing to spend more on sustainable products The Global Sustainability Study 2021. In addition, sustainability is the top priority for around 88% of German consumers. “The brand has to reflect that,” explains Schlünsen. “But it’s also important to expand the definition beyond planetary stewardship to drive meaningful change through other initiatives.”
At ABOUT YOU, one of the fastest growing e-commerce companies in Europe that aims to build the best digital fashion destination for Generations Y and Z, this means championing diversity, tolerance and self-confidence. It also means partnering with relevant events and authentic influencers to drive that agenda forward. In September, ABOUT YOU Fashion Week in Berlin (AYFW) brought artists and influencers together to celebrate diversity.
Live shopping shows and omnichannel campaigns combined to increase the organic reach of the event that was generated 1.09 billion media contacts in the first week after its publication in print, digital, TV and social. “Supplementary advertising on the app was essential and promoted short-term growth in addition to longer-term brand advantages,” says Schlünsen.
Her advice: “Don’t look at performance marketing and brand marketing separately. Whenever possible, integrate both for the best results and greatest impact.”
The Rules of Engagement
Reaching and retaining German audiences requires more than marketing skills. When it comes to marketing and messaging, app publishers need to be open about what they offer and transparent about the data they collect.
Surveys show that German consumers are highly informed shoppers, making it imperative for brands to clearly communicate their advantages over the competition. A report from Santander Trade, a financial services company that provides information on international markets, explains: “Before making a purchase…German consumers want to know as much as possible about other similar products, characteristics and origins [and more].”
Germany also has strict data protection regulations, and German consumers are very careful about their data. A Harvard Business Review survey found out that 8 out of 10 Germans are reluctant to pass on personal data to companies.
Capturing this important European market may not be easy, but the valuable German mobile audience is worth the extra effort. Brands that make the effort to understand the nation’s current zeitgeist and invest in regionally relevant expertise and initiatives will reap the rewards.