This post is produced in association with Personagraph.
User acquisition today has become a numbers game. App developers spend a good majority of their marketing dollars in acquiring users, hoping these users will eventually generate enough revenue. However, more users seldom means more quality users. Acquiring a truck-load of low-quality users is not a good way to spend user acquisition budget; it just won’t have a good outcome.
I recently spoke to an app developer who had launched a beta version of his app that caters to sports fans. As he put it, “It is very frustrating to run campaigns to acquire users and see less than 10% active users.” In his case, he was trying to target sports enthusiasts, which in my opinion, is still very broad targeting. The key here is to define demographic and interest attributes at a very granular level for your high-value users, and then acquire lookalikes.
Facebook is a great channel for running highly-targeted user acquisition campaigns. We recently ran a user acquisition case study and found CPI (cost per install) rates to be approximately 36% lower on highly-targeted campaigns – and it had the added benefit of these users being a lot more engaged within the app.
The harsh reality is that the amount of dollars spent by app developers in acquiring users is often higher than the revenue they’re able to generate from them. A recent study conducted by Superdata, a New York based market research firm, states that the CPI was $2.73 for mobile games, compared to the average revenue per user of $1.96. This means that the average revenue generated per user (ARPU) isn’t high enough to justify the steep CPI cost.
The CPI and ARPU scales are grossly imbalanced!
There are numerous ways that companies can optimize their CPI strategy to have a positive ROI. Here are 3 simple ways that have worked for us and could help decrease your CPI:
1. Identify and define your high-value users
It’s important for you to clearly identify who your high-value users are. You can use a combination of factors like recency and frequency of launch, session length, and key actions that are high-value for your app to identify these high-value users.
The next step is to define these users at a very granular level. You need to know detailed demographics and interests of these users, their typical app launch times, locations, and interactions with other apps (this will help with running campaigns on Chartboost and similar services).
This data helps you acquire similar users on ad networks. Facebook is an example of a good platform to run these highly targeted campaigns.
2. Acquire lookalikes
Once you’ve established who your high-value users are and what attributes they have, you can acquire similar users with targeted campaigns. These highly-targeted campaigns help acquire the RIGHT users that are more engaged and deliver greater value. By acquiring lookalikes of high-value users, you’ll lower your CPI rates and help increase the number of highly engaged users.
Facebook provides a comprehensive campaign manager to run user acquisition campaigns. You can select demographic attributes, interests, locations, device type, etc. at a very granular level to run highly-targeted campaigns to acquire lookalikes. While there are other acquisition channels which can help you target at a demographic and device level, none are as comprehensive as Facebook.
3. Identify users who are likely to convert to high value users
You already spent a of lot of money acquiring users. The key is to leverage the right engagement tools to increase the value of the users you’ve already acquired. Based on their past behaviours in your app, it’s easy to identify the users which are likely to convert to high-value by running predictive analytics models. These models look at your users’ historical behavior within the app in order to understand how they correlate to high-value actions like in-app purchases. They also identify a set of behaviors including app launch times, clicks etc. that are good predictors of the users’ value.
By targeting these users with the right incentives at the right time within your app, you can increase in-app purchases or conversions to the paid version of your app.
While this is a pretty straightforward solution to solving common issues with user acquisition, it requires time and effort that may be in short supply. To solve that, Personagraph provides you with an easy-to-use, off-the-shelf solution to optimize your CPI and extract more value out of your users. Try it out for free.
Srujan Akula is the Head of Publisher Business at Personagraph, a user insights platform for mobile apps. Personagraph tells app developers who their users are, what they do outside the app, and how they interact with other apps.
Sponsored posts are content that has been produced by a company that is either paying for the post or has a business relationship with VentureBeat, and they’re always clearly marked. The content of news stories produced by our editorial team is never influenced by advertisers or sponsors in any way. For more information, contact firstname.lastname@example.org.
Mobile developer or publisher? VentureBeat is studying mobile app analytics. Fill out our 5-minute survey, and we’ll share the data with you.