In app install campaigns it is essential to keep an eye on your efforts and spending in order to see if your campaigns are successful and if your users are high-quality users. This is particularly true for your app marketing efforts. App Marketing can be expensive, and if not properly executed can earn the reputation of that of a cost center rather than a profit-driver.
You want to make sure that any app install campaigns you run for your app, especially when big budgets are involved, are reaping rewards. And it most certainly will, if correct planning and measurements are in place. To test the profitability of your app marketing efforts, many marketers look at marketing ROI -- or return on investment.
What is marketing ROI?
Marketing ROI is a metric which reflects the profitability of marketing initiatives. By calculating return on app marketing investment, companies can measure the degree to which app marketing efforts either holistically, or on an app install campaign-basis, contribute to revenue growth.
Return on investment (ROI) is an approximate measure of an investment's profitability. ROI is calculated by subtracting the initial cost of the investment from its final value, then dividing this new number by the cost of the investment, and, finally, multiplying it by 100.
Advantages of marketing ROI for your app install campaign:
- Justifies marketing expenses.
- Can use it as a forward-looking measure of marketing performance and profitability.
- Understanding of your users behavior
- Sheds light to what channels to invest in, how to allocate budgets, who to hire, and track spending levels over time.
Marketing ROI VS ROAS
Return on Ad Spend, or ROAS, is another typical indicator used by marketers. ROAS calculates the total revenue made from each dollar spent on advertising. Marketing ROI and ROAS are terms that marketers frequently use interchangeably, yet there is a major difference between the two.
The scope of the calculation of ROAS is substantially more narrow, accounting just for expenses related to a single initiative or activity related to advertising. Marketing ROI, on the other hand, offers a higher-level POV of how the profitability of your business is affected by your total marketing initiatives.
ROAS (Return On Ad Spend) measures the revenues generated from each dollar spent on app install campaigns. The formula for calculating your mobile app marketing ROAS is as follows:
ROAS = Revenue of Ad / Ad Spend
Read our article on how to boost ROAS for your app install campaign. Want to know more about the difference between marketing ROI and ROAS? Find out more here
Strategies to measure your app marketing ROI
KPIs and metrics
What KPIs and metrics are most important for your marketing endeavors? Here we will go through which metrics and KPIs to monitor in order to assess your revenues and then measure the marketing ROI:
- Retention rate
- Daily/Monthly Active users
We have taken a deep dive into the world of marketing KPIs to optimise your mobile user acquisition strategy
There is no single number that determines a good MROI. That can depend on several factors — including:
- Market conditions
- Stage of your business
- Stage of your marketing campaigns
- Your unique KPIs
- Revenue goals
Ultimately, you should use the metrics that are most significant to your business and include contextual information in your ROI calculations in order to provide a true
picture of your marketing returns.