When the app industry began, and for many years after, many marketers were obsessed with one thing: install counts. The KPI was installs, installs, installs. But over the past 12 months, we've seen a strategic transformation across the entire app marketing industry -- to one where optimizing for "user quality" trumps other considerations.
By "user quality," I mean attracting and cultivating relationships with "stickers" -- people who will engage, buy, and even evangelize over the long haul. It's about putting your users on a spectrum from those who never engage to those who transact often. And then doing whatever you can to monetize and attract a whole lot more of the latter group.
That thought shift is significant because the dirty little secret of app marketing is that raw install counts don't correlate all that well to strong revenue or average revenue per user (ARPU). It's not difficult to figure out why the world has changed: Better data and more sophisticated analysis have revealed that many of the cheap UA tactics don't move the needle on revenue. A lot of those cheap app installs are never even opened once. Others are quickly forgotten. And huge numbers of them are uninstalled just moments or hours after the install.
Smart marketers are thinking differently and are putting their budgets where that new thinking is. Here are just four of the ways that user quality strategy is transforming app marketing.
Recently, I learned of a company that had been optimizing to consumer price index (CPI) for several months, and was experiencing declines in return on advertising spend (ROAS) and ARPU. When counseled to optimize to payers and high value users instead, they found that 40 percent of their dollars were misallocated. By making adjustments, ROAS and total revenue started moving in the right direction immediately. This is why cost per action (CPA) models, which pay for things like registered users, are gaining traction.
These days, we see more and more app marketers putting user quality optimization at the center of their UA strategies.
Apsalar industry data show a 900 percent increase in remarketing activity in the past year, including a tripling of events in the past six months. While 15 months ago, spend was almost 100 percent UA, indications are that remarketing can hit 10 percent of total spend in 2016. We first spotted the size and pace of this trend in app-centric, developing markets like India. But the phenomenon has quickly spread around the world.
Further, remarketing is becoming increasingly personalized and task-oriented. Interest in segmenting users has grown markedly, so that brands can share high value audiences with media companies for more customized marketing and messaging efforts. According to our clients, customization drives significantly stronger sales and engagement rates -- far outstripping the incremental costs of such initiatives.
Mobile app businesses are adopting uninstall measurement at a fast clip. With uninstall data, marketers are able to investigate reasons why some portions of their marketing plans are less revenue-positive than others.
Sure, it helps you identify problem channels that need attention. But uninstall data has also taught us that the first hours and days of a user relationship are vital. If we can drive incremental engagements during that period, then uninstall rates drop bigtime. That's another reason why so many app businesses now are beginning to remarket.
Mobile marketing automation
There's been huge investment in this area over the past year, from both VCs and major app publishers. The business is all about creating individualized relationships with users to make them more product.
Push notifications are at the center of marketing automation. But smart marketers aren't just using these platforms to blast away at people. Rather, they craft and deploy genuine comms strategies, tailored to likely user interests and being respectful of consumer time and attention. These strategies incorporate push notifications, but also email, remarketing, message centers, and more.
Install counts still matter. After all, rankings are important, especially in the gaming category, and you can't drive much revenue if you don't have much of an install base. But most of us get measured on dollars-in. Revenue. And the best way to drive revenue is to attract "stickers" and cultivate outstanding and productive customer relationships.