Let’s take a look at the average of websites vs apps: where the average age of the top global websites is 18 years old, that of the top apps is five years. 60% of users download an average of zero apps per month, indicating that the apps users heavily use are the apps that will most likely to be continued to be used.
Traditionally, advertisers have focused on starting the “re-engagement” phase only after UA efforts have been scaled. However, modern-day app advertising is far more complex and UA and retargeting cannot be seen in isolation. Understanding UA and re-engagement is like solving a puzzle — only when the pieces fit, can one expect true app success.
Marketers who want to be successful need to extend beyond growing the customer base and take a holistic end-to-end view of customer acquisition and management. Mobile retargeting is an increasingly important field to enable customer value maximization.
Most UA and retargeting partners tend to offer only either UA solutions or retargeting solutions. However, advertisers can find the most value for their strategy when these two concepts are approached right from the start, following the natural curve of the mobile user journey.
We look at the top reasons why UA and retargeting need to be worked into your app strategy right from the start:
Users Become Customers
A retargeting partnership must be looked at through the lens of turning users into customers. If we compare the retention rates for mobile apps worldwide in a 30-day period from the time of installation, we see Day-1 retention only averages around 26% and continues to fall (only averaging at 6%) as we approach Day-30. This is why acquisition and retention matter from the very start of the campaign — advertisers who have a goal of maximizing ROI need to not only reach those users but also connect and activate them, turning them into loyal customers.
To ensure steady or even increasing return, advertisers need to focus on working with the user base and unlocking customer value. ARPU can be increased by offering the existing user base better deals, discounts, offering customized specials to only name a few potential measures. On the retention side, users can be targeted with Emails or push notifications to increase their activity and conversion likelihood. Besides these must-do organic measures, a proper retargeting strategy can add immediate value, even in the high-growth phase of the user base.
Positive Impact on LTV
A well-defined retargeting strategy put together along with the UA plan can change the economics of mobile performance marketing.
First, through follow-ups on newly acquired users with highly targeted ads, user acquisition efforts are profitable for longer, even with diminishing returns for new users.
Second, the return for the whole user base increases as all KPIs of monetization, retention, and virality can be positively affected. Third, at some point the incremental investment into retargeting an existing user is lower than the incremental investment into acquiring a new user and the economics change in favor of retargeting. In this phase, retargeting does not only improve the economics of the user acquisition efforts but unlocks significant on-top potential.
Pricing Matters
Rather than silo your UA and retargeting efforts into separate approaches, it is worthwhile combining them into one holistic concept to account for the activation of the acquired users from the start. The ideal partner offers a CPA-pricing model that lets you pay for real results, thinking UA and retargeting together, rather than focusing on traditional CPI models and then running retargeting campaigns as a separate effort as an afterthought.