60% Complete

Global Android Ad Industry Insights 2014: China’s app download rush kicks off the Chinese New Year

Feb 18,2014 by Francis Bea

China'sAppDLRushCNY2014 by AppFlood

春运 (pronounced “chunyun”) is the Spring Festival travel season that’s been dubbed the largest annual human migration in the world. You might not be familiar with the term, but “Chinese New Year” might ring a bell.            

With China emerging as the largest smartphone market in the world, there isn’t much available research into exactly how smartphone owners spend their time during Chinese New Year, not to mention how advertisers might stand to benefit in the market. To fill in the gap, we observed mobile ad trends on Android pre and post-January 31 (Chinese New Year Day).

Spending quality time with family, friends, and mobile devices

The Chinese New Year period is subject to lunation (the lunar calendar) and this year it just so happened that the Lunar New Year fell on January 31, 2014 with the holiday officially ending on February 6, 2014. But in reality, the start of the holiday and total days off vary depending on the person. Extended vacations that last two or three weeks aren’t uncommon as workers tend to reserve their vacation days for the Chinese New Year.

What you might not know is that the Lunar New Year for many Chinese – particularly migrant workers – will be the only chance that they’ll get to reunite with their loved ones. In fact, it’s common for Chinese to migrate to urban areas for work, leaving family and their hometown behind. Returning home is a rare once-a-year opportunity where they can spend coveted time offline engaged in IRL (in-real life) activities including competitive games of mahjong with relatives; setting off fireworks in the middle of the street; praying at the nearby temple to welcome the Lunar New Year; observing the dragon dance at the local Chinese New Year festival; or imbibing baijiu (白酒) with childhood friends to catch up on old times.

But when people aren’t out an about, based on AppFlood’s data, we suspect that people were frequenting their smartphones.

Chunyun’s effect on mobile activity

Chunyun has a significant impact on mobile usage and app downloads. To paint a picture of the scale of this massive migration Baidu published a revealing heat map of that elucidates the sheer magnitude of this annual migration. And to quantify chunyun, which takes place between January 16 and February 24, there will be an estimated 3.6 billion journeys expected to happen in China.

The relationship between a migration and smartphone usage in this day and age is a no-brainer. Inevitably users will occupy their commute – some which could take two days by train or bus – and vacation by consuming apps or mobile games on their mobile devices.

In fact, during chunyun the average click volume between January 16 and February 6 was 51.5% higher than the period before January 16, suggesting that mobile usage based on mobile ad clicks increase during the holiday. Clicks during chunyun (ending February 6) increased 48.5%

TotalClicksCNYHoliday2014-01

 

Apps tend to be downloaded prior to the migration

But as far as app downloads are concerned, mobile users that discover apps through ads are more inclined to download apps before their long trips back to their hometowns. In fact the highest rates of installs happen just before chunyun.

More specifically, the install rate on AppFlood climbed to 0.56% on the back of a 117% jump between January 11 and January 12, just three days before the start of chunyun, and peaked the day after at 0.57%. In fact, this spike coincided with a rush of Chinese advertisers on AppFlood who allocated mobile advertising budgets for the CNY in advance of the Chinese New Year rush.

Mobile Ad Install Rate Advertiser CNY 2014

However, as chunyun progressed and conceivably more people departed to make the journey home (not to mention that school’s out for students the week of the 18th), we found that the install rate reflected trends resulting from the migration and time spent with family. We can see this when the install rates steadily decreased after January 16 an average of 1.37% day-over-day for a total decline of 28.7% up to February 6.

Conceivably, the decline in the install rate during the Chinese New Year holiday is the result of smartphone users who aren’t inclined to download apps while they’re traveling, or even at their friend’s or family’s home where a Wi-Fi connection might be hard to come by. Instead, apps are usually downloaded in advance.

Mobile “Arcade” games: the hottest Chinese New Year app category

It’s hard to argue, thanks to Tencent’s clever PR move to promote its WeChat mobile payment platform by encouraging users to send virtual Red Envelopes, called hong bao (红包), that WeChat wasn’t used by tens of millions of mobile owners over the holidays. In fact, PapayaMobile’s Chinese employees and unanimously agree (myself included) that WeChat was a de facto app during the holidays.

While WeChat clearly was the forerunner, we dug deeper to find out what types of apps stood out among users.

We took a look at the average daily volume of clicks on mobile ads between January 12 (when install activity spiked) and February 6 (the end of the official Chinese New Year) to identify Android app categories that were most popular during the general chunyun period. Expectedly the casual and easy to play games in the Arcade category, accounting for 9.55% of the total daily average clicks, topped the list followed by Entertainment (3.42%), Racing (2.89%), Casual (1.75%), and Media and Video (1.64%) to round out the top five.

CNY 10 Most Popular Android App Categories

At the opposite end of the spectrum, with Chinese users discovering more apps during the Chinese New Year, we took a look at the top five installed Android app categories on AppFlood by average daily installs during the same period. Productivity apps topped the charts and accounted for 41.9% of total daily installs. Arcade games expectedly followed with 32.7% of total installs, Tools with 11.7%, Communication apps with 9.3%, and mobile Card games with 2.5% of total traffic.

CNY 5 Most DL Android App Categories

It’s evident that games and any entertainment apps were popular means of occupying time, with mobile arcade games leading the way.

How the Chinese New Year affects advertisers

As far as advertisers are concerned, thanks to the growth in clicks during the Spring Festival and despite the declining IRs during chunyun, the Chinese New Year holiday is one of the rare opportunities for developers to pick up quality and affordable users – particularly during the days leading up to the Chinese New Year.

If we compare average mobile ad installs before and after January 10 (when installs picked up leading into chunyun), we find that mobile advertisers on average garnered 121.9% more installs. However, advertisers should note that the bulk of installs occurred before January 23.

Mobile Ad Install Advertiser CNY 2014

More importantly, China remains a source of cheap traffic. The cost of acquiring a single user during the Chinese New Year rush when the IR hit 0.56% on January 13 was just $0.31 and $0.30 the day after when the IR hit a ceiling of 0.57%. The CPI during chunyun (starting January 16) averaged just $0.29.

CPI for CNY 2014

CNY is creeping into Western ad campaigns, so start prepping for the year of the sheep

This year has been a unique as brands and other advertisers, recognizing the purchasing power of the Chinese consumers, have hopped on the bandwagon to usher in the Chinese New Year all the way from the West. Brands “decorated” their ads and branding campaigns with undeniably Chinese characteristics. This trend a mark of China’s rise and growing influence in the global economy (apps included), and mobile advertisers can now strategically join in on the Chinese New Year rush in time to customarily welcome the year of the sheep.

Francis Bea

Francis Bea is the Content Market Manager at PapayaMobile. Francis writes about the intricacies of the global mobile advertising industry and analyzes industry trends for AppFlood. He hails from the tech blogging world, where he got his start at Digital Trends, and contributed to TheNextWeb, PSFK, CNET Asia, among other tech blogs, and his reporting has been cited in numerous major publications. Francis holds B.A. in English and Art History from The University of Wisconsin-Madison.Google +