The mobile app marketing industry has undergone quite a few changes since its early days. As discussed in part one of this blog series, originally the industry focused on clicks, and then moved to optimizing for installs and post-install events. Today, app install is still one of the most common key performance indicators (KPI) in an app marketing campaign. However, as the mobile app industry continues to mature, app marketers are starting to realize that acquiring high lifetime value (LTV) users is the key to success. Thus, many have begun to optimize their app marketing campaigns for high LTV users.
Cross-PromotionAn emerging mobile app marketing strategy for attracting high LTV users is cross-promotion. This strategy allows app marketers to take advantage of their existing or lapsed high LTV user base by promoting a new app to them. For example, app developer XYZ has an existing app A but has just launched app B recently. Both app A and app B are in the same category, so the app marketer at XYZ can promote app B to the high LTV users of app A. The theory behind this is that if the users are driving the return on investment (ROI) for app A, they are highly likely to do the same for app B since the two apps are in the same category.
Knowing which users are loyal and which are spenders can help ensure that the audiences targeted in the campaign will become high LTV users if converted. App marketers can bid on media inventory across global ad exchanges targeting high LTV users. On the other hand, knowing which users are neither loyal nor spenders in the app can help app marketers be more efficient by knowing which users not to target – to specifically exclude from their media buy. This strategy is cost effective since app marketers focus their budget on acquiring only users who they already know have high LTV in certain apps and are very likely to become high LTV users in the new app. This helps mitigate the risk of a regular user acquisition campaign where bidding depends on the prediction of whether certain publishers will deliver high LTV users.
Re-engagementAcquiring high LTV users - no matter what method - is a big challenge, but retaining and keeping them engaged is another. In fact, many apps fail to maintain interest and keep users engaged for a long duration. A study shows that 25% of users abandon an app after just one use. Retention rates fall to single-digits by the thirty-day mark and, according to research, the rates are worsening by the year. Thus, the re-engagement strategy has gained popularity and is becoming widely used by many app marketers. Re-engagement campaigns are designed to bring back lapsed users who have stopped interacting with the app.
Lapsed users, no matter what app lifecycle stage they are at, can be re-engaged using this strategy. The initial step is defining your user segments: 7-day lapsed, 30-day lapsed, etc. Different ad creatives are targeted to each segment, encouraging them to return to the app with sequential messaging and, ultimately, convert them into loyal users. Ad creatives can show promotions, offers, or new updates to entice users to return. Ad creatives should be deep linked so that when the user clicks on the ad, they are redirected to the app store page if the app has been uninstalled, or, the app is launched if it is still installed on the device.
Instead of spending budget on acquiring new users, who may or may not be high LTV users, app marketers find that this strategy lets them spend budget on nurturing existing users’ LTV by re-engaging them. The engagement KPI will differ for each app category. For example, a shopping app marketer’s goal might be for users to return to the app and purchase the abandoned items in their cart. On the other hand, a game app marketer’s goal might be for the user to re-install the app and keep playing until level 5. Whether it is because the user forgot about the app or no longer finds the app to be useful, re-engaging these users can be the right strategy for many app marketers.
As this industry continues to mature, app marketers are coming across more challenges but are finding new ways to tackle them. To learn more about new and emerging solutions, take a look at the first part of this series where we discuss how much the mobile marketing industry has changed, especially for user acquisition.