Florian Lutz is a co-founder and of the app marketing platform Trademob and with more than seven years experience in the mobile advertising industry he knows the landscape inside out. He spoke at the at App Promotion Summit in Berlin on the subject of Retargeting Your Installed Base: From MAUs To DAUs. His talk 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
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Retargeting Your Installed Base: From MAUs To DAUs Video
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Retargeting Your Installed Base: From MAUs To DAUs Presentation
Retargeting Your Installed Base: From Maus To Daus Transcript
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 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.
Are you in the launch phase? Do you need to attack app store rankings and get up there quick? Do you need to acquire users? Are you in a scaling phase, where it’s all about getting your app in as many hands as possible and to scaling it internationally? Or are you actually already in a phase where you need to start thinking about user retention, and ready to start thinking about how to monetize these users?
What we think is that along each one of these app cycles, or phases in an app life cycle, you need to have specific campaign mechanics, specific products, actually, to promote your app, not only for user acquisition, but also for retention and monetization. So what we’ve learned from online, where re-engagement and re-targeting is today something that a lot of money is being spent into, is what we’ve learned that actually 98 percent of all visitors leave your app without a conversion, and only two percent are actually buying something at first visit.
So what our colleagues in the online business are doing, they’re re-engaging those users to come back to their website, and they’re actually speaking to buyers to make them repeat buyers and to increase their lifetime value over time. So the question is, why aren’t we doing that in mobile advertising at the moment? I think one of the points Kaya has already mentioned, because we’re now going into an age where advertisers understand that they need to attract much more and different KPIs than just the download.
They actually need to look into cost per reopening, which is obviously a KPI that I haven’t heard today, but it’s actually very important. We need to look into retention rates. We need to look not only into the amount of bookings or buys that we get, but we need to look into rebookings. We need to assess average basket sizes. We need to look at actual customer lifetime values, and there’s probably much more different metrics that all of you have for your specific purposes.
The problem in mobile, obviously, is, it’s a cookie-less society, right? We don’t have cookies. That’s why online re-targeting doesn’t work from all the apps, unfortunately. But the truth is, we have something that’s much, much more powerful than the cookie. We have the idea of A, and we now have the Google advertising identifiers, is that’s what it’s called?
These device level identifiers actually allow us to target users at a very individual level, so we can look at the users we already have and some of the users that we want to have, which again comes very close to a lookalike targeting. And then really speak to those users individually with very specific messages telling them to go back into the app and perform specific actions that you want them to perform or to actually buy something, which is an offer today, or basically just to use your app over time and become a repeat user.
So ideas. What was, if you really could tailor very specific offers to individual users, what was if you could really speak to them in real time and if you could chase shopping baskets? What if you could know more about every single individual user that you have, and what if you could know more about their specific interest, which allows you to target them with more specific and individual messages? What if you can find them anywhere, anytime, and what if you could drive them back to you at a cost that’s actually much, much lower than costs of acquiring a new user?
So that’s why we’re introducing re-targeting for mobile apps. What we’re seeing so far is that we’re generating 52 percent lower costs when we’re driving a user back to an app rather than getting a new install, and what I think is even more important, those users we’re driving back to the app have a 150 percent higher conversion rate with different specific KPIs as compared to a regular user acquiring through your regular user acquisition channels.
So that’s all very inspiring, I guess, and we have one partner, mobility, in this case, where I want to share a case study with you, which is actually proving that along the entire conversion of an app you can see that re-targeted, re-engaged users have a much higher conversion rate than a new acquisition user. And when it comes to the final action, which in this case, is actually the user reaching out to a dealer, it’s actually 62 percent lower than that of a new acquired user. So in fact that means if you’re investing into re-engagement rather than user acquisition, it means that your actual costs of a specific action is 62 percent cheaper than getting a new user.
I’m not saying stop investing in user acquisition, but I’m also saying, start thinking about what you’re doing with all of those users.
So what did we do specifically? In fact, what you do in re-targeting is you try to analyze your actual user base, and then you start building specific cohorts. In this example, we were looking at users who have opened the app, we were looking at users who have browsed inside of the app, so they have performed specific searches, and we were looking at revenue generators, so those users that actually did perform the final action.
What we did here was focusing on the openness of browsers, because these guys were the ones that did not yet contribute with any revenue, and we are finding them along our DSP and target them with very specific messages tailored to their current usage or to their current non-usage, whatever it is. And then drive them back with a deep link, not into the app store, but right back into the app to the place where they have last left them.
So that’s the idea, and because time is running out, I just very quickly want to run over a couple of potential use cases, and you can think of many more with regards to your specific use case. So one of the use cases we have is, and that’s I guess the use case as you know in online, if you’re going to the Lander and you’re looking at a pair of yellow shoes and you did not decide to buy them, but you had them in your basket, rest assured that these yellow shoes will follow you over years. It’s actually annoying when Christmas buying. So if you share your computer with your wife or with your husband, it’s very bad. So make sure to delete your cookies.
So in mobile, again, it’s the same thing, right? If you’ve been looking at, in this case, a black pair of shoes, we can show you the specific pair of shoes in the banner and then deep link you right into the app so you can actually go back to your basket and then finally do the conversion. Another use case is to just re-target dormant users. So you can look at specific cohorts of users who have been in your app for a while, who actually have been very rewarding, very ROI intensive users for a while, but then for whatever reason didn’t come back for a week or a month or even a year, and you could try to find them back and bring them back into the app, probably with a specific offer or just with a generic idea.
And lastly, obviously, you should start thinking about, specifically if you’re into games, you should start thinking about your most valuable users, and then think about what could you do to target these users again and either go back to the game you already have or go back to the next game that you’re about to launch, because you know these users have been valuable. It’s very likely they’ll be valuable for your next game, as well. So that’s something we’re doing, as well.
Finally, what we do suggest is start working with personalized offers. So for instance, if you’re a game, you could lure your users back into the app by saying, well, look, if you come back now, I’ll give you 20,000 credits for free. If you’re an e-commerce app, you can say, if you finally want to buy this awesome yellow pair of shoes, I give you five Euro or ten percent discount off them.
And then we can actually track inside of the app if this user is eligible for that specific kind of a promotion and automatically attribute it to him, which is pretty smart and which shows that we have tremendously high conversion rates if we give specific users very specific and individualized offers.
That’s all I have for you today. I’m not saying don’t acquire users, but I’m also saying re-engage them, and whatever you do, make it relevant. And I guess everybody’s looking forward to lunch now, right?
Thanks to Lutz for his incredible talk. You can find out more about App Promotion Summit here