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As the industry continues it's transition from a focus on pure acquisition to ROAS, optimizing for the right actions can be complex. Because IAP is the most straight-forward and intuitive action to optimize for from a revenue perspective, efforts often center around the metric, but that may come at a cost. According to AdColony’s recent report, the majority of app publisher’s revenue comes from display and video ads. If that comes as a surprise to you, it the report may have some major implications for your acquisition, monetization and measurement strategies.
Overall, the report validated that being too singular in how acquisition campaigns are optimized and measured is a mistake. Here are the three key trends to consider for your own UA strategy:
IAP is and will continue to be an important part of the mix for app monetization and was cited as the primary revenue driver for over 40% of the publishers surveyed. However, optimizing acquisition and retention based on any single revenue stream is missing the target. Defining a “high value” user and optimizing acquisition based on IAP alone, ignores the revenue opportunity that comes with acquiring highly engaged users at scale whom can be acquired at a much lower cost and monetized through display and video ad products.
Building models that consider LTV of ad revenue has proven untenable for many marketers. So to achieve balance across revenue streams, industry leaders are optimizing for engagement and considering multiple KPIs. In fact, 71% of marketers surveyed measure 3 or more engagement metrics with achievements and push notifications leading the pack (65% and 62% of marketers surveyed respectively).
Of all the monetization techniques cited, rewarded video was a major standout. In addition to being the far-and-away most effective in terms of monetization, 87% of marketers cited rewarded video as delivering the best user experience as well. Even better news, the ad product isn't just for games anymore.
If you suspect your acquisition strategy might be overemphasizing IAP, ramp up acquisition of highly engaged users to round out your optimization. These users can be targeted with an affinity-based approach at a much lower cost and produce impressive ROAS. Shifting funds may have the added benefit of reducing competition among your existing lookalike audience. Check out this article for pointers on coupling interest targeting with lookalikes on Facebook to get started.
Scale acquisition of highly engaged users with affinity-based interest targeting from Appnique.