In 2023, several changes were observed in the world of mobile app marketing, such as the introduction of SKAN 4.0 and a general shift of focus towards profit-related metrics.
Due to the current economic context, it has become crucial to increase the return on investment (ROI) for user acquisition spending to avoid budget cuts. This has led to new optimizations aimed at boosting ROI in addition to the growth of new user volumes.
This is also reflected in the fact that mobile games continue to be the primary category working on a cost per install (CPI) basis, while all others are gradually transitioning towards cost per acquisition (CPA).
With this report, we have attempted to define the "state of the art" in the world of mobile app marketing, gathering all the necessary knowledge and clarifying some important concepts to strive in 2024.
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- The importance of DSPs in mobile app marketing strategies
- Choose the right KPIs for mobile app marketing
- Which pricing model to choose in mobile app marketing
- Targeting criteria in mobile app marketing
- The role of ads and creatives in mobile app marketing
- How we optimize your mobile app marketing campaign towards success
Find the right partner!
A DSP, an acronym that stands for Demand Side Platform, is a technology platform used in digital advertising for mobile app marketing that allows advertisers and publishers to buy and manage online ad inventory and placements across various digital channels.
There are two advantages, among the many DSPs offer, that particularly stand out:
- In contrast to ad networks, which typically aggregate ad inventory from various sources and offer fixed-price deals, DSPs employ real-time bidding (RTB). This automated approach enables them to continuously adapt costs based on campaign performance, while also ensuring superior traffic quality and full transparency.
- DSPs empower advertisers to target specific audience segments based on contextual signals. In the grand scheme of mobile app marketing, this equates to reaching users who are more likely to engage with your app and make in-app purchases (IAPs). Moreover, DSPs possess the capability to explore untapped audiences.
KPIs: the most relevant
KPIs (Key Performance Indicators) are crucial in measuring the effectiveness of a mobile app marketing campaign.
There are many KPIs to choose from, but from a mobile app optimization’s point of view, it always comes down to some main metrics.
- ROI, which stands for Return On Investment;
- ROAS, which stands for Return On Ad Spend;
- LTV is the acronym for Life-Time Value;
- RR means Retention Rate;
- ARPU identifies the Average Revenue Per User.
CPI vs CPA
In mobile app marketing, and particularly in user acquisition, there are two main pricing models for advertisers to gain new users: CPI, which stands for Cost Per Install, and CPA, which stands for Cost Per Action. Both modalities are very much used, but there are many differences between them, both in terms of risk and profitability in different periods of time.
Cost per install is the cost spent by advertisers for their user acquisition based on the numbers of newly acquired users. It can be calculated very simply by taking the total cost of user acquisition activity and dividing it by the number of new users acquired. Essentially, CPI quantifies the cost for each acquired user. To evaluate the success of a mobile app install campaign and its user acquisition operating under a CPI pricing model, the revenue generated by new users must surpass the costs incurred in acquiring them.
Cost per action is a model in which advertisers get paid once a user has completed a pre-determined action after installing the app and having engaged with the ad. This action can include various post-install events, such as registration, subscription, or in-app purchases. The CPA is computed by dividing the total mobile app marketing campaign cost by the number of actions attributed to that particular campaign. A CPA price model is especially used in non-gaming apps, where the main goal is to establish high-quality users.
These two distinct pricing models serve different objectives. A CPI model aims to acquire a large influx of new users, while a CPA model primarily targets high-quality users who continue to engage with the app over an extended period, frequently performing revenue-generating actions.
Get to know your audience
Deciding on the selection of target regions based on geolocation and operating systems for mobile app marketing is influenced by specific business objectives, the desired audience, and available financial resources. In reality, this decision is predominantly driven by financial considerations, given that each target option incurs a distinct cost, influenced by several factors.
- When opting to focus on tier-1 nations, like North America or Central Europe, the initial budget allocation may be substantial, but it is more likely to yield revenue compared to targeting other global regions.
- Similarly, the choice of the operating system differs in costs: targeting iOS users will have a different impact on budget to Android users.
During mobile app marketing campaigns, and for mobile games specifically, leveraging a diverse range of ad formats can prove to be highly effective, with each format presenting its unique advantages.
· Playable ads: this format offers the best kind of interaction, allowing the user to get a glimpse on a bit of gameplay in first person. This kind of ad has proven to be incredibly resultful in terms of revenue.
· Interstitial Ads: this is a kind of full-screen ad that appears at natural break points in the game, for example between levels or during loading moments. They are great in terms of visibility and engagement because gamers tend to be more receptive to these ads during those moments.
· Rewarded Video Ads: players would be offered the option to watch a video ad in exchange for in-game rewards, like coins, life points, or power-ups, generating a win-win situation for both gamers and advertisers.
· Banner Ads: these are static or dynamic banners placed at the bottom or top of the screen during gameplay. They manage to maintain constant visibility, even though they result to be less immersive than other formats.
Optimize and test to progress!
Scaling a mobile app marketing campaign is an ongoing process and it is essential to monitor and optimize continuously to ensure that it remains efficient and cost-effective.
This task can be accomplished by leveraging machine learning and analytical tools capable of real-time monitoring of ad performance and campaign dynamics. These tools can promptly identify trends, anomalies, and areas requiring improvement.
Optimization in mobile app marketing can also be conducted through the implementation of A/B testing, a valuable method for comparing various ad creatives, targeting options, and bidding strategies. A/B testing is a data-driven approach that can definitely help refine a campaign and get better results.
These mechanisms, enhanced by the features of machine learning, always allow one to keep a close eye on budgets and allocate resources to the most effective channels and campaigns, so advertisers can adjust their spending based on the performance of each channel employed during user acquisition.
To thrive in the world of mobile app marketing, you always need to remember everything we have discussed in this report.
Keep in mind that there is still a lot to know and to understand, which is why it is incredibly wise to take advantage of the help of a demand side platform, with an experienced team of people that will always know what to do along every step of your mobile app marketing strategy.
Remember to always be adaptable and be ready to change your strategy as soon as the opportunity to do better presents itself. It is important to support the growth of new users, but never lose sight of metrics like ROI and ROAS to understand if the spending on acquiring new users is indeed generating a return.
Learn to know your audience for the purpose of a better targeting strategy. Since every criterion has different costs and different impacts on your budget, making the right decisions is of the essence.
Do not undervalue at all the role of ads and creatives. Be original, test different possibilities and keep on looking for new ways to engage a new audience and to entertain your old one.
Last, but not least, Mapendo is here and eager to help.