Success in the Mobile Evolution: Data First, Not Downloads
In a two-part series, I’m diving a bit deeper to address how brands need to adapt to succeed in the mobile evolution, starting with user acquisition.
Data First, Not Downloads
The app ecosystem has matured. It is more saturated now than ever, with mobile apps representing nearly 60 percent of Americans’ total time spent on digital, according to comScore’s 2016 U.S. Mobile App Report. This growing mobile audience has increased both demand for new apps and competition within the app marketplace. Ultimately, this new mobile landscape provides consumers with more choices, allowing them to decide what they want to consume, when and how they want to.
It is precisely this element of choice that has created the need for a more sophisticated approach to the mobile advertising space. Advertising strategies that focus solely on the total number of downloads will not set you up for success. Installs no longer provide an accurate picture of success – or failure – as they often produce unqualified users, resulting in a high spend with a low return on investment.
First, let’s focus on users. We’ve already established that the mobile app ecosystem is a crowded space. As with any market, increased demand leads to higher cost. More apps are competing for more customers, driving up media costs, specifically with social and app store marketing. In fact, according to recent Salesforce report, the cost per mobile install in the United States increased by 26 percent from 2015 to 2016. A cost per download spend comes with a hefty price tag because it first requires breaking through the clutter and then substantial action on the user’s part. However, if the audiences we’re advertising to are more discerning, why isn’t our advertising?
Let’s consider the following, rather common, situation. A company spends according to a cost per download strategy, generating an increase in their total installs per month. Yet, they don’t understand why their number of daily active users won’t budge. It starts a vicious cycle of spending – spend more, to secure more downloads without significant results and spend more again.
We need to break the spending cycle. In this scenario, brands aren’t investing the time to properly qualify the users they are targeting. In some cases, brands underestimate how difficult and expensive it can be to get qualified users. A cost per download strategy does not guarantee active users and often does not account for uninstall or realistic purchase funnel conversion rates. According to a Kantar/ITR study, 26 percent of apps are uninstalled within the first hour of downloading. Comparatively, 64 percent are uninstalled in one month and the rate increases to 90 percent in 12 months. A download-centric strategy is a quantity over quality approach. To be strategic, focus on securing and engaging quality users over total users.
There is now an enormous amount of data available to better inform who a company is advertising to. Identity-based infrastructure with mobile has provided unparalleled insight into an audience’s demographics, behaviors, usage habits and more. In the past, we might have been able to target females ages 25-32; now we can target females ages 32 living within 20 miles of a specific geographical radius who have shopped for a related product within the last month.
This information should be used to create more advanced, strategic targeting and exclusion approach, ultimately ensuring the consumers who download an app are the most likely to actually use and engage with it.
Don’t Forget Your Existing Audience
In an evolved mobile landscape, acquiring new users comes with a premium. Companies can spend smarter by taking a harder look at their existing audience.
Active users can tell a more holistic story and help inform advertising strategy and media spend. Brands need to examine their existing daily users’ behaviors, needs, challenges and usage patterns within an app and how these factors drive purchase intent and actual conversion. This information provides valuable insight into app functionality and audience engagement, as well as the opportunity to create an ideal user profile. It can also be used to determine the lifetime value of a user to the brand, which will better inform how to spend on user acquisition to ensure a strong ROI. As a result, brands will have more accurate understanding of an ideal audience and associated targeting parameters, resulting in a more effective media spend and overall acquisition strategy.
In addition, brands can track activity and engagement to better understand why certain users are not engaging in a desired behavior. For instance, if an app has a lot of daily users spending a significant amount of time consuming content but no conversions, where are they dropping off in the consumer journey? What additional calls to action does the audience need to be provided with to help drive conversion? What channels should they receive them on? It is much more cost effective to re-allocate budget to engage an active audience for lower-funnel actions as opposed to the higher cost associated with new customer acquisition.
For brands that are employing optimized media spend and strategic targeting tactics, non-active users can present an interesting opportunity. It can be assumed that these are quality users based on targeting parameters, and they have shown an interest in the brand by crossing a significant barrier to entry, actually downloading the app. Furthermore, the brand already invested advertising spend in this audience. Consider ways to reach this audience with more cost-effective, targeted messaging on other channels. Securing conversions from this audience is like getting a brand-new install all over again, only cheaper.
Developing a Data-Driven Strategy
Consider how measurements of social media have changed. Success used to lie in a page’s total number of likes or fans and advanced with the introduction of engagement metrics. Now, success can be measured against business objectives, such as sales or leads, because of access to identity-based infrastructure. A similar approach can be applied to mobile marketing. The total number of app downloads is an outdated measure of success which only tells a fraction of the story and virtually nothing about the user.
There are specific steps you can take to help ensure you’re approaching user acquisition strategically and setting your brand up for success in the mobile space.
- Understand the data available to you: Every company’s digital infrastructure is different so it is essential to understand the data points you currently have available to you and what they can tell you about your audience. Start with the identity-based infrastructure provided by social platforms, but also consider vendors, partnerships, sales data, etc. You might have access to more than you realize.
- Get precise with your targeting: Know your audience, and more importantly which audience has the highest propensity for continued usage, engagement, and conversion within your app. Analyze your data to develop a profile for an ideal quality user, considering factors such as demographics, affinity traits, purchase history, interests and past actions. Use this profile to create a more effective strategy for targeting and exclusion of your media spend.
- Leverage your active audience: Consider your consumer journey – both within your app and where your app falls along it. Understand when your users are moving from the evaluation stage to the purchase stage. Design your mobile campaigns to influence these active users when they are most likely to be at critical, defining points along their journey Take the time to understand everything you can about your daily users. Start with their existing behavior within your app – how, when, why, where are they using it? Map the customer journey to your campaigns, and extract as much value as possible out of each user. It will always be easier to drive repeated conversions from a loyal user than the first conversion from a new user.
- Re-engage your dormant users: Your app is already on their device, or waiting to be reinstalled. Get back in front of those audiences with targeted messaging, and bid based on a CPM or a CPC. The overall objective cost will be cheaper, but driving them to re-engage within the app, with an exclusive offer, for instance, is a smart way to spark redemption and conversion from an existing audience.
- Never stop optimizing: There is always opportunity for improvement. Set the precedent to launch a strategy, optimize, expand and test – and then get ready to do it all over again. An app contains untapped potential for data harvesting and the smartest brands leverage this data to better inform their strategies.
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