WhitePapers_MobileAppCostsv4

5 Ways to Drive
Down Mobile App
User Acquisition Costs

5 Ways to Drive Down Mobile
App User Acquisition Costs
If you’re a mobile app marketer, you know that the cost of acquiring
mobile app users just keeps rising. In fact, recent data shows that the
cost of acquiring loyal users reached an all-time high in August 2013 as
marketers started prepping for the holiday season, spending their Q3
budgets on A/B testing acquisition strategies so their marketing
campaigns will be successful in Q4. While the cost of acquiring users is
high, there are ways that app marketers can drive down these costs.
Here are five ways that mobile app marketers can lower the costs
of acquiring users without sacrificing any aspect of your
marketing campaign.
5 Ways to Drive Down Mobile App User Acquisition Costs | Page 1
mobileapptracking.com info@hasoffers.com 206.508.1318 @mobileapptrack facebook.com/mobileapptracking

Don't Stop At Installs - Engage Users
Many mobile app marketers focus on one metric – CPI (cost per
install), and while the number of installs was the first and primary
KPI for user acquisition in the beginning, it’s important to consider what
happens after users install your app. User engagement may soon be
integrated into Apple’s ranking algorithm, which means high user
engagement can further help users organically discover your app at no cost
to you. The higher your app ranks, the less money you’ll have to spend on
user acquisition costs. As user engagement is already a part of the ranking
algorithm for apps in Google Play, it’s still critical to consider how to
maintain loyalty, especially if you’re in a vertical such as health, fitness, or
dating where users are more likely to stop using the app after 60 or 90
days, which can then hurt your app’s ranking and force you to spend more
money to acquire new users. Some tactics that are known to work to
engage users are push notifications and social components that encourage
friends to engage each other to continue to use your app, or that target
users who behave a certain way to cross-promote another game.
Deeplink With Mobile Ads
On that note, advertisers want to attribute purchases and user
engagement beyond the install back to their advertising partners. A
critical part of optimizing the funnel beyond the install is making sure
users land in the most appropriate location within an app once they have it
installed. Deeplink.me, Sparq and URX offer the ability to further drive
engagement into a specific point of an app, and Facebook also recently launched
this capability with its mobile app ads, enabling app marketers to direct users to a
customized, specific location inside of their app, such as a sale, promotion or
specific content such as a new album or hotel listing. Though there is a cost to
advertising your app using deeplinks, this will encourage engagement within the
app which, as mentioned above, will organically help increase your app store
rankings and drive down user acquisition costs. Google AdWords extensions can
also help encourage conversation within an app by enabling advertisers to point
people who search on Google to a specific place in the app. Consider this type of
acquisition an investment that keeps on giving back.
A critical part of
optimizing the funnel
beyond the install is
making sure users land
in the most appropriate
location within an app
once they have it
installed.

Avoid Peak Hours and Days
If your goal is acquisition and you’re looking for ways to drive
down mobile app user acquisition costs, you’ll definitely want
to avoid the high user acquisition costs that marketers experience during
holidays and other special events, such as iPhone launches. In a recent
report, W3i noted that the value of new users jumps during long
weekends. Holiday weekends are also high in advertiser demand, as CPI
rates increased by 65 percent over the 2012 Memorial Day Weekend, for
example, with some CPI rates even more than quadrupling the industry
standard. Additionally, many advertisers noticed a sharp increase in user
acquisition costs during the iPhone 5 launch in 2012. Consider keeping a
calendar of holidays and special events and pause your campaigns
during these time periods.
Consider Licensing Content
If you really want to drive down user acquisition
costs for your mobile app, you may want to
reconsider your mobile app’s content strategy at
the early stages. One way that mobile developers and publishers can
drive down user acquisition costs is to use well-known and recognizable
intellectual property, such as characters, stories and brands from
entertainment, such as movies and TV. This can also easily provide
immediate attention, differentiation and credibility. To see how licensing
content can drive down user acquisition costs, consider if with a CPI of
$1 a publisher is able to spend $200,000 and thereby obtain 200,000
installs. With a conversion rate of 5%, that should result in 10,000 paying
users and an Acquisition Cost Per Paying User (ACPPU) of $20. If the
Average Revenue Per Paying User is $40, then the expense of $200,000
generates $400,000 in net revenue and a gross profit of $200,000.
However, consider if you chose to develop an app using licensed
content. Instead of paying $200,000 (most of it in advance) to generate
$400,000 in revenue for the same number of users, you would only need
to pay a royalty of 12.5% instead - or $50,000.
Consider keeping
a calendar of holidays
and special events and
pause your campaigns
during these time
periods.

Measure ROI
If you want to drive down the cost of user acquisition, it’s
important to know what the ROI of your marketing
campaigns is so you can spend less overall and more in the right places.
There are a variety of channels you can acquire users from, but not each
channel may deliver the results you desire, resulting in large ad spends
in channels that don’t lead to large amounts of new customers. For
example, consider if you shifted your ad spend from a variety of
channels including social media, email, SMS, and incentive programs to
just social media and incentive programs, reducing your Acquisition Cost
Per Paying User (ACPPU) from $40 to $20. However, due to the cost of
the particular incentive channel you chose, your Average Revenue Per
Paying User decreased from $20 to $10. While your previous gross profit
was $200,000, the shift in acquisition channels actually decreased your
gross profit to $100,000 -- even though you technically drove down your
user acquisition costs.
To drive down user acquisitions costs, be sure you’re measuring the ROI
of each channel you’re leveraging to acquire users from. Technology
such as Swrve, MixPanel and Omniture can help measure the ROI from
each acquisition channel, providing insightful in-app analytics into the
performance of your campaign. With the combination of
top-of-the-funnel analytics in addition to in-app analytics, marketers can
identify the sources that are driving the greatest ROI. This is especially
helpful if traffic is coming from multiple sources. Of course, be sure you
continue to optimize as you measure your ROI per acquisition channel.
Though you may be seeing more revenue, your costs per channel may
not have actually decreased (or, potentially, may have increased instead.)
To drive down user
acquisitions costs, be sure
you’re measuring the ROI
of each channel you’re
leveraging to acquire
users from.

About HasOffers
HasOffers provides unbiased attribution analytics for
performance advertising. We believe that better attribution
technology in the hands of online and mobile marketers creates
higher performing advertising relationships that ultimately
generate the best value for advertisers.
About MobileAppTracking
MobileAppTracking.com (MAT) created by HasOffers, is one
central, unbiased platform for mobile app marketers to attribute
app installs, in-app engagement, and purchases back to
marketing sources (such as social networks, publishers, and
mobile ad networks). By implementing MAT, app developers
never have to install another SDK to attribute conversion to new
advertising partners. MAT is integrated with over 280 major ad
networks and publishers along with Google, Facebook, and
Twitter. It has been named the 63rd fastest growing company by
Inc 500, backed by Accel Partners with Rich Wong, and has more
than 120 employees across four offices worldwide, with
headquarters in Seattle, WA. Learn more about the product at
www.mobileapptracking.com or the company at
www.hasoffers.com/about.
If you’re a MobileAppTracking client or have questions about
MobileAppTracking, contact an account manager or
email us at sales@mobileapptracking.com.

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