Game On: How to Beat the Rising Cost of Acquiring Mobile App Users, And a Little Football Too

Thursday, January 30, 2014

With Super Bowl just around the corner, I cannot ignore the obvious: marketing costs are on the rise. This is never more apparent than the extreme cost to advertise during the big game, with :30 second TV spots reportedly fetching up to $4 Million. The climbing price to acquire mobile users is no exception. Just last week market analysis firm SuperData Research reported that mobile developers are spending more than ever to acquire new gamers – up to $4.36 per user last month to be exact (as compared to the same time last year when cost per install was only $1.30).

So what’s the best way for mobile marketers to beat the rising cost of acquiring users and lead their app to financial victory? In honor of the Super Bowl, I’ll break out the Play-By-Play in terms we can relate to:

Recruit the MVPs:

You’re seeking All-Star users who earn their keep. To developers, these are users who spend money or click on advertising inside the app in order to offset the cost that you, the developer, paid to acquire them. In other words, say you pay a CPI of $5. You want to get that user to come into your game or app and spend or generate more than $5. Even better, you want that user to continue to spend over their lifetime. Once you identify your MVPs (AKA users with high Lifetime Value), you want to treat them well, understand their behaviors and cater to them.

Have a Game Plan:

There are many reasons that developers seek installs. Be sure your reasons are valid and will translate into app financial health. Your game plans should include strategies that will promote continued app usage and drive revenue long after the app has been installed.

Gaining Eyeballs – The hope is that more downloads will translate into revenue, but merely getting downloads is not enough.

Building Community – The more people that are using an application on a daily basis (AKA, “Daily Active Users” or DAU’s), the more socially relevant an app becomes, as word of mouth grows and creates buzz.

Beware The Fake-Out: One thing to keep in mind is that Daily Active Users don’t necessarily translate into revenue. For example, a million people can play a game app, but if game players are not making in-app purchases or clicking on ads, chances are the developer isn’t hitting their revenue goals.

Attracting Funds -- If the app has gained sufficient installs or DAUs, then the app becomes more attractive to investors or potential buyers. Regardless of whether or not the app is already generating revenue, amassing a captive audience signifies potential to further monetize it. Developers can leverage their audience as a springboard to obtain more funding for the business, or position to sell it.

Be a Coach:

Even NFL coaches have to pay attention to what is happening throughout the game and revises the plays based on real time data. For developers, this means diving into the data to figure out what is happening in your app. Once you understand what your users are doing within your application, you can identify which users will generate the most return. For example, if you know that users are coming in from a specific source, are of a specific gender, or have a special interest, you can target them better. It’s your responsibility as a coach to stay abreast of what your users are doing in real time – and respond.

Get Your Head in the Game:

Adopt this as your mantra: “Test and Optimize.” Testing various factors will let you compare their ability to meet your marketing goals. You can discover what works first, and then scale the piece that is working (without continuing to spend on unproven methods).

Test multiple ad formats
Test creative messaging
Test targeting options

Consider the flow of your application – By looking at the data, perhaps you’ll find that users get stuck on a particular level of your app and can’t advance to the tiers where in-app purchases happen. If that’s the case, you can take steps to either relax the hurdles for advancing to the next level, or make the in-app purchases appear sooner in the app experience.

Getting to the End Zone:

Don’t be intimidated by diving into the data. There are tools and platforms that are designed to simplify the process and even customize the dashboard to your needs – better yet, some analytics tools are FREE. Your ad network should be willing and able to help you understand your data and develop strategies to acquire valuable users and fully optimize your strategy. Your ad network, and many other stakeholders have skin in the game when it comes to ensuring your success. So ask up, and get ready to do that touchdown dance.

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