Listen to the Apps World panel above, or read on for an overview.
At Apps World London 2014, Unique Influence’s CEO Ryan Pitylak, along with four other panelists, took part in a Mini WIPJAM open forum, UNpanel session designed for mobile app developers. The focus of the discussion and Q & A session that followed was paid user acquisition and driving downloads for mobile apps. Below is an overview sharing some of the valuable insights offered by Ryan during the Apps World London 2014 Mini WIPJAM session.
Smaller Companies Can Make Paid User Acquisition Work
Paid user acquisition can work for companies in all stages – beginning to well-established. That was the point Ryan drove home when addressing a question asking how smaller developers, without large advertising budgets, can compete with the big companies who drive CPI up as they spend more and more on advertising mobile apps.
To make paid user acquisition work, earlier-stage companies can use social advertising such as Facebook or Twitter as more cost-effective advertising solutions. This is due to the fact that those companies can hypertarget which can be very effective for a niche publisher.
What Unique Influence finds – at least on the gaming side – is that roughly 8% of installs we drive turn into paying customers. The industry average is 2.2% so Unique Influence helps our clients see results at 3.5 x industry average. We achieve those results with good targeting and advertising smartly on social channels.
So, while it is definitely true that the best games and best apps can afford to advertise in these competitive marketplaces, the smaller companies don’t have to sit on the sidelines. And remember, while CPI goes up with larger companies, it is also always important for them to keep it below the LTV so they make money. The same goes with smaller developers looking to improve paid user acquisition, so they can begin to advertise at scale.
Most Effective Social Advertising Strategy
With social channels being mentioned as the best place to start with paid user acquisition advertising spend, a logical follow-up question was asked. “How can these earlier-stage companies and developers best utilize social channels for advertising.” Here’s the answer in two words – lookalike audiences.
The end goal for developers or companies should always be to try to scale up their efforts. So, start small and figure out if you can advertise profitably in these channels. And when starting to utilize social channels for advertising, the most effective strategy is to use lookalike audiences. This will work for the developer who already has a large install base but has never done any advertising and also for the developer who is just getting started and has a small install base.
As long as you already have an install base – and specifically from that install base you know who your high value customers are that can be retained and become high-paying users – a developer can take those user ids, device ids or email addresses and load those into Facebook or Twitter to build lookalike audiences off of them. That is the most basic and easiest way to do your targeting. And, quite frankly, you’re probably going to find your easiest and cheapest installs that way.
Bidding strategy is also very important to smaller developers or those developers just beginning to test the waters of social advertising. The reality is you could start small (e.g. $100 a day), test some things out, use the tracking technology provided by Facebook and Twitter (Note – With Twitter you must use a mobile measurement partner to obtain this data.), and adjust after reviewing the analytics data.
When reviewing this data, look to see how many installs your ads are driving, how much revenue did those ads generate and how much did it cost. If your advertising testing works well and you see positive LTV, then you would come to a company like Unique Influence, and we would help scale up your efforts.
Understanding Engagement Data
What about marketing metrics? From a developer’s mindset – not up to speed on marketing metrics – what important metrics should developers focus on and start tracking? A clear first step here is to understand engagement data – to see how your users are using your mobile apps – before focusing on user acquisition.
There’s a lot of mobile measurement partners – companies like Kochava, Ad-X, Adjust – that make it very easy to track what is going on inside of your app. A developer just tags links that are going out to the App Store or integrate in with Facebook and Twitter. Inside this technology, you’ll be able to see engagement information like the percentage of people who are staying after 3 days and the installs inside of the mobile app along with firing different events such as when revenue happens.
Remember, a lot of metrics are tied to downloads/installs/revenue. So, even if your mobile apps aren’t generating revenue, you can and should still track a lot of engagement metrics. For all mobile apps developers and companies, it is very important to know your product first – to understand engagement metrics and how monetization works – and have all of this baked in prior to a large advertising spend.
Importance of In-App Purchases
Setting yourself up for advertising success comes from careful planning prior to launching any mobile app. And if you want one key place to focus on as it pertains to obtaining paid installs and building an audience with paid advertising, then that focus should be on in-app purchases.
Roughly 80 – 90% of revenue generated from the App store comes from in-app purchases. Developers should always start with a game plan that includes in-app purchases and build that in the mechanics of your mobile apps. Then, when you do start advertising you can generate a positive LTV much quicker than if you did not incorporate in-app purchases.
The reality for smaller developers and companies is that if you are only making 15 cents to 20 cents per user, it’s going to be hard to buy advertising against those numbers. But when you move into the range of multiple dollars of revenue per install organically, we can multiply both the count of installs and the revenue per install by bringing better people to the table.
So, start by building the mechanics of in-app purchases in from the beginning to generate a positive LTV. Do this and your company can afford to use paid advertising which then enables your company to get scale.
Meet Customer Expectations
What about mobile apps that do not generate app-specific revenue or have a budget for advertising? It’s possible that there are no in-app purchases or advertising, but a company may be using their app solely as a distribution platform leading to something else that is a great service and/or it makes what is a great service already work better. This is where a lot of the large scale companies are.
So remember, while the marketing will depend on the dynamics of your actual business model, your mobile app must deliver the same level of service that the customer expects in person or through a website. In fact, a developer’s ultimate goal should be for that mobile app to make a great service work better. When you do this, a company’s customers will become their best advocate and aid in your mobile app marketing.