Marketers are increasingly investing in app retargeting to unlock and cement further growth from the customers they have already won.
According to mobile measurement platform AppsFlyer, remarketing spend jumped to $31 billion, as its share of spend rises to 29%. In fact, remarketing’s share of overall app marketing spend rose from 25% in 2024 to 29% in 2025.
That four-percentage-point increase is remarkable. But what is spurring this increase? And, for the average marketer, is remarketing as simple as increasing spend allocation?
Behind the Numbers
One reason for retargeting’s rise is simply that user acquisition (UA) costs have become inflated in recent years. As a result, marketers are placing greater emphasis on retention as part of the all-important metric lifetime value (LTV). By increasing retention, marketers ensure their revenue potential remains high well after conversions take place.
Success cannot be defined by just how many new users you can bring in (and hasn’t for some time), but it also shouldn’t be defined by that first interaction with an app, of first conversion. Retention just plays more of a role in gauging success.
That makes life more complicated. Marketers must optimize across reactivation, repeat usage, and lifetime contribution – using retargeting to extend and pay down user acquisition spend rather than continually chasing new users. Efficiently bringing back users into the product becomes as critical as the ability to convert them in the first place.
For marketers, this means opening the aperture beyond installs to capture the full customer journey. Understanding how users act, where they disengage (or churn) and unlocking methods to reactivate them can help teams improve retention and make better use of acquisition spend.
Three Targets to Retarget
Breaking users down into three distinct categories can help marketers tailor their message to each, making campaigns more effective. Those categories include active users, dormant users and lapsed users.
Active users are those currently engaged and using the app on a consistent basis. These users would welcome proactive messaging, including offers and new release notes. For such users, make the most of rich datasets to identify and uncover engaged user needs. With the right segmentation, retargeting campaigns can help raise LTV among this cohort.
Moving beyond the most active users, dormant users are those who have completed events or engaged with the app in some way in the past, but have since disappeared – lapsing in use. Unlike active users, they may not be as willing to return without some incentive, and shouldn’t be addressed in the same way as active users. However, given their prior app use, they may just need that extra push.
Lapsed users have actively disengaged from the app entirely – perhaps even uninstalling the product. It’s important to find the moment of disengagement to understand why this drop off could have occurred. But bringing such users back is tricky, necessitating a well-balanced strategy of advertising and incentive to prolong the user LTV.
Crafting Your Retargeting Message
Tailoring your message is imperative when speaking to these different types of users, so ensure your thinking is clear and your strategy set before you mistakenly target the wrong type.
In one case we’ve seen, a leading developer of free-to-play games, wanted to engage with lapsed users – perhaps the hardest of the three types of user to reach. However, they finessed their targets to capture paying customers based on their LTV and past in-app events.
With this rich data in hand, the company began the campaign. Over time, they continually refined their targeting parameters to uncover new engagement opportunities and achieve their overall aim of hitting their long-term ROI goals. With more lapsed users returning, more effective strategies to reach those same user segments emerged.
Retargeting Takeaways You Can Use Again and Again
With acquisition costs rising, the true path to sustainable growth lies in mastering retargeting across distinct user cohorts.
By strategically separating active, dormant and lapsed users, brands can move away from generic messaging and deploy highly tailored incentives that work on each segment.
Treating retention as a core part of delivering lifetime value allows mobile businesses to stop chasing fleeting conversions and instead build a high-ROI ecosystem out of the users they have already fought hard to win.
