The most valuable mobile app permission is growing even more valuable

I was recently talking to a friend of mine who manages a popular Discord server for sneaker collectors that’s so engaging that there are thousands of members paying for access. As great as Discord is, it was never designed for sneakerheads so my friend regularly runs up against pain points like how to share a schedule of shoe releases, how to let users save their favorite sneakers to revisit later, how to create a tutorial with a checklist that users can go through, etc.

My friend often thinks about how great it would be to build a custom app for his community. He has designs for a beautiful release calendar, a digital locker to showcase your favorite shoes, and a marketplace that his community asks for every day. He has complete confidence he knows exactly how to create a fantastic user experience totally optimized for sneakerheads that would be far superior to his Discord server. But he’ll likely never go ahead and build it.

Why? Because of one word: notifications.

Permission to Push

Last March at the start of the pandemic, open rates for mobile app push notifications (i.e. how often users click on notifications sent to their phone) reached their highest average rate in more than four years according to mobile notification company Airship. This continued a trend that has been going on for a while now, as users have steadily been engaging more with mobile notifications over the past half decade on both iOS and Android devices.

From Airship CEO Brett Caine: “Mobile customer engagement has steadily grown in importance for more than a decade, but in just one month the pandemic made it absolutely critical for every business as customers seek in-the-moment information, reassurance and even entertainment.”

Push notification engagement rates

The benefits of push notifications for app developers is clear. A recent study concluded that push notifications improved overall 90-day app retention by 190%. Another study showed that 50% of users who receive push notifications for an app will use that app 9 or more times on average, while 50% of users who don’t receive push notifications will use an app only 2 or fewer times on average.

So every app should send push notifications, but it’s not that straightforward because not every app can send them. To send a push notification on either iOS or Android, an app must first get permission from the user. And unfortunately for app developers, mobile phone users have been growing more reluctant to give that permission. Since 2018, push notification permission user opt in rates across all mobile devices has slowly declined from 68% acceptance to 60% acceptance.

So while users are getting more interested in engaging with the push notifications they already receive, they are getting less interested in allowing new apps to send them push notifications.

The Push Privilege

One of my favorite nerdy pastimes is to study the iTunes App Charts (which ranks the most popular mobile apps across a variety of categories like Gaming and Social) for interesting trends. Last month, I wrote that one Covid-19 trend is that the average age of the Top 30 most popular apps jumped more than 50% during the pandemic. In other words since March 2020, consumers have been choosing to install older, more established apps at a higher rate compared to new, upstart apps. When it comes to mobile app installs during Covid-19, fortune favors not the BOLD, but rather the OLD.

Just like in the real world, there’s an advantage to being an older incumbent in the mobile app world when it comes to app downloads. The same advantage applies to notifications too. Older incumbent apps will have benefited from higher historical notification opt in rates, which makes them more likely to retain users going forward. These incumbent apps aren’t just more popular and more frequently downloaded, they are likely also more engaging because they have notification permissions.

Going back to our opening story about Discord, it’s not just their 150 million monthly users that make them such a valuable and sticky social platform. It’s also that a high percentage of those users give Discord permission to send them notifications as an incumbent app that’s been available in the App Store for over 7 years. That’s one of the many reasons why Discord is so sticky. Community owners might be able to create a better alternative experience for their users than Discord, but they might not have a way to notify their users about that experience. That same advantage is true for Twitter, Pinterest, Snap, Reddit, and more that all also have hundreds of millions of users they can notify.

For a mobile app, push notifications are now more than simply a permission — they are a privilege. A privilege that successful incumbent apps have been fortunate to gain over time, benefiting from being around when users were more willing to opt into push notifications. A privilege that newer apps are having a harder time getting as users are now less likely to opt into push notifications. But a privilege that every app should fight for because of how incredibly valuable it is.

Leading Commerce Incubations at $FB. Was co-founder at Packagd (acq.), GP at Kleiner Perkins, and writing messy code at Hulu, Flipboard, Erly (acq.), and $MSFT.