As the mobile app industry continues to evolve, app marketers are beginning to look beyond app installs to measure the campaign success. Instead, they are choosing to focus on the quality of users and consequently, the return on investment (ROI) of each campaign. The theory is that the more high-quality users they can acquire, the more likely it is that the campaign will achieve stronger ROI. This can be attributed to the believe that ROI is driven by the amount and value of in-app purchases high-quality users will make.
The question is --- does the value of programmatic media inventory that app marketers use have an effect on the chances of acquiring high quality users and driving stronger ROI?
In order to determine the effect of media inventory value, we analyze a programmatic advertising campaign for a popular social casino mobile app from August 1st, 2016 to September 14th, 2016. The campaign’s cost per mille (CPM) was split into 10 different buckets, with bucket 1 being the least expensive and bucket 10 being the most expensive.
Based on the 10 CPM buckets, we observed three metrics: cost per install (CPI), the quantity of high-quality users, and the app’s key performance indicator --- day-3 ROI.
The analysis reveals that high CPM does not necessary equate to high CPI. In fact, CPM bucket 10’s CPI was approximately 27.4% lower than bucket 1’s CPI. This could be an indicator that the efficiency of inventory is affected by the inventory value. In other words, high value inventory can bring a larger volume of installs.
In addition to relatively low CPI, the most expensive CPM bucket is responsible for the highest number of high quality users, or in this case, users who made in-app purchases. CPM bucket 10 resulted in about 205.26% more in-app purchasers than bucket 1. This indicates that value of the inventory also reflects its quality.
Similar pattern can be seen with ROI. While day-3 ROI fluctuates between CPM buckets 1 to 9, day-3 ROI is much higher in bucket 10. CPM Bucket 10 resulted in 135% change in day-3 ROI.
While there is no clear indication of a positive correlation between CPM and CPI, quantity of high-quality users, or day-3 ROI --- it is safe to say that the app marketers can achieve a larger volume of quality users with high-value inventory.
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