October 6, 2020
Need a primer on mobile game and app marketing? Check out Mobile User Acquisition 101: A Beginner's Guide.
Not so long ago, marketers simply purchased ad space and hoped for the best — with no guarantee of views or conversions. Today, thanks to the predominance of digital media, performance-based marketing has completely transformed the field. Performance marketing is particularly valuable for app marketers, as it lets them distribute ad spend efficiently, focus on specialized audience segments, and optimize campaigns for post-install events. As a result, performance campaigns generate higher returns for every dollar of ad spend.
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Performance marketing is a digital marketing approach in which advertisers only pay for guaranteed installs, actions, or engagements. Some common examples of conversion points include:
Unlike traditional campaigns in which advertisers pay for impressions (displaying one pixel or more on the screen), merely serving an ad will not impact advertising spend. This approach guarantees that advertisers will only pay for conversion events that meet specific goals.
To ensure that performance marketing campaigns are effective, app marketers should keep the following techniques in mind:
App marketers can’t choose just any performance metric. You have to set specific targets for new user volume, in-app purchases, retention, and more. Every app will be different, but your goals should all come back to one essential metric: ROAS. ROAS, which stands for “return on ad spend,” is calculated by subtracting the average cost to acquire a user from the revenue that the user generates. For casual games that rely on in-app ad monetization, attracting a high volume of users may be the key to ROAS. Meanwhile, for a rideshare app, securing that first ride could be crucial.
Here are a few examples of performance marketing metrics for app marketers:
These campaign types represent the entire marketing funnel from initial impressions to final sales. As such, the cost of each advertisement will vary — clicks will be frequent and relatively inexpensive, while in-app purchases will be costly but guarantee revenue. For that reason, campaign goals should reflect those of your overarching UA strategy.
Just because performance marketing is effective doesn’t mean all performance-driven campaigns are the same. App marketers will need to target specific channels based on their goals. Here are a few go-to channels for UA managers:
Performance marketing isn’t just cost-effective; it’s highly-focused and targeted. Thanks to modern digital capabilities, app marketers can target specific audiences through the channels described above. What’s more, they can monitor how users engage with ads and use those insights to optimize future campaigns.
To make the most of these capabilities, UA managers should target specific user segments. Better still, they can use machine learning to predict how new users will behave in-app. Where traditional advertisements might be limited to a broad demographic such as age or gender, performance marketing channels can typically target specific personas and “lookalike” audiences. When combined with digital marketing platforms you can personalize communications with messaging that deals that reflect specific interests.
With UA, diversification is key — more publishers means more opportunities for strategic optimization. Plus, you’ll be protected in the event of algorithm changes, such as those pushed by Facebook in 2018. If you limit yourself to one or two ad networks, it will be impossible to scale campaigns while optimizing for quality.
Remember: Performance marketing is about targeting the right audience instead of reaching the most people. App marketers should seek solutions that allow them to attract high-LTV users. That means first identifying the demographics and behavioral patterns of those users. Once you know who you want to reach, find channels that give you access to those types of users at the best price point. The best place to start is with a test — then you can let performance data guide your decisions.
So what is performance marketing? It’s the most valuable approach in an app marketer’s toolkit. It requires a great deal of strategy and preparation, but the benefits are invaluable. At MOLOCO, we specialize in helping apps grow, using a combination of machine learning and performance expertise. We can help you tap into the full power of your data, plug into the programmatic ecosystem, and run highly-optimized campaigns. To explore our solutions, get in touch today.
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