Florian Lutz from KissMyAds runs through the major ins and outs in app retargeting advertising at the App Promotion Summit in Berlin. He spoke on the subject of ‘Retargeting Your Installed Base: From MAUs To DAUs’ which covered the following topics:
– How To Get Users Coming Back To Your App After Download
– Key Metrics For Measuring Engagement
– New Ad Formats And Approaches For Increasing Frequency
“Perfect. So we all work in an industry that is discussing downloads. We’re arguing about the lowest CPIs, we’re celebrating top rankings in the app stores. When in fact we all should think much more about average users, because at the end of the day, we all need to earn money, and only active users bring money, not downloads.
So what we’re seeing at the moment is that in our industry, a lot of money is being spent in mobile advertising. That money is going to quadruple, ten times, or whatever. It’s going to be huge in a couple of years, and it’s already big business. And what we are doing is we’re buying installs. We’re buying downloads, more and more downloads. There’s billions of downloads every day.
However, most of these users never come back. In fact, only very few of these users stay within the next week, the next month. And after a couple of months, you will be very proud if you see a 15 percent conversion rate across all the downloads that you’ve collected.
What that [inaudible 00:01:08] boils down to is we all, every one of you, has hundreds of thousands, sometimes millions, of dormant, inactive users who have downloaded your app, who have your app on their mobile phone; however, they never use it. In fact, 69 percent of all users open an app less than 10 times; 25 percent of all users open it only once after downloading it. Very frustrating, if you ask me.
So getting downloads is important. We need downloads to drive our business, and it’s not a waste to spend money on user acquisition. However, once you have acquired those users, once you’ve made sure that your app is on their mobile phone, don’t stop talking to them. You need to continue bringing these users back to your app and start spending money with you guys.
So the basic idea is that the average cost of getting an install and actually getting an active user seems to be increasing over time, but what we think is that the actual costs of retaining a user and bringing him back to your app is actually much lower. It seems to be about one third of the cost that you need to have in order to get a download.
In fact, most of the users you acquire have a lower RPRU, so a lower lifetime value, or at least monthly value, than the costs you need to acquire them. So this chart here, which is not ours, unfortunately, but it came out a couple of days ago, seems to suggest that if you continue acquiring users, you need to hold on to them at least for two months being them active users so they can actually bring back the money you’ve invested to get the download in the first place. However, if we’ve seen only very few users stay over two months, so that’s a catastrophe.
That’s why I think that CPI is really sold in 2013, and all of us, we’re working in a future business, we need to look in the future, so let’s try to think of it as 2014. And some people have already started to think of advertising more in terms of a lifetime cycle. I’m not saying stop spending money on user acquisition, but I’m saying think about your app life cycle. Think of where you are.”
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