The mobile app industry has come a long way since almost a decade ago. Back in 2007, Apple released the first generation of iPhone with preloaded apps. Shortly after, the first Android smartphone hit the market in 2008. Back then, mobile apps were simply deemed as useful, nice-to-have tools that people could live without.
Fast-forward to today - mobile apps have become such integral parts of people’s daily lives. They have become one of the primary tools for communication, entertainment, utilities, and much more. In fact, today there are millions of apps available for install in the app stores. Furthermore, a research by eMarketer reveals that in the first quarter of this year alone, there were 17.2 billion app installs worldwide, 11.1 billion in the Google Play Store and 6.1 billion in the Apple’s iTune App Store. As the number of apps continues to grow, competition between apps to acquire users intensifies and growing revenue becomes an uphill battle. As a result, the way app developers market their apps to users have evolved to keep up with this maturing market.
From Clicks to Installs
Going back to the early days of app marketing, the most important metric to app developers was ad clicks. Higher click-through rate (CTR) is an indication of high user interest, and for a while that was enough for app developers. However, clicks often time do not result in installs. Consequently, the lack of conversion means lack of revenue to keep the app developer afloat. Therefore, it is no surprise that years later, CTR is longer the most common key performance indicator (KPI).
Instead, app developers have paid more attention to installs, or the number of users they are able to acquire. This can be attributed to the fact that the more users they can acquire, the higher their apps rose in rank in the app stores’ charts. In turn, the visibility of being in the top chart can lead to a significant organic lift of installs.
Aim For Quality
While acquiring a high volume of installs is a good initial strategy, app developers have begun focusing on a more mature strategy - acquiring high-quality users. For an app that operates under a freemium model, offering free install and monetizing through in-app purchases, the return on investment (ROI) is dependent on the quality of users who have installed the app. Thus, many app developers have moved away from using mere number of installs as their campaign KPI.
Realistically, the number of installs will not contribute to the success of an app, especially if that success is defined by ROI, if the users who installed the app do not make any in-app purchases or simply do not stick around. As a result, many app developers are now targeting high lifetime value (LTV) users. In short, these high LTV users are active users who are spending or will spend real money in the app.
Optimize for Post-Install Events
Apps generate revenue when high LTV users conduct post-install actions including purchasing an extra game life or currency, utilizing paid-subscriptions, booking a hotel room, and listing an item for sales in the app. The more post-install actions a user conduct, the higher the user’s LTV. Thus, as a way to acquire high LTV users, app developers are optimizing their app marketing campaigns for post-install events.
This can be accomplished by forecasting the probability of post-install events to determine what optimization should be implemented in real-time bidding (RTB) situations. The accuracy of the forecast determines both the media placement and consequently, whether advertisers will achieve their post-install goal. In a RTB media-buying platform such as Aarki Encore, bidding algorithms can be utilized to forecast the probability of post-install events, enabling app developers to make data-driven campaign decisions and implement necessary optimization in order to achieve post-install goals.
As this industry continues to evolve, app developers are adjusting their strategies accordingly. Now, app marketing strategies go beyond running a simple user acquisition campaign. To learn more about more emerging solutions, keep an eye out for the second part of this blog series which will focus on cross-promotion and re-engagement strategies.