With a large number of mobile ad networks with a wide spectrum of install quality, determining where to allocate install advertising dollars is a major challenge for mobile app developers and marketers. The risk of imperfect information is very real. Most advertisers don’t have the time or budget to evaluate and test every ad network so it becomes a game of avoiding placing bets on the wrong ad networks.
A common approach to de-risking this decision is to allocate dollars to the networks that have the largest reach, the best/most targeting options, and the best reputation for quality. Unsurprisingly, this causes a lot of mobile install ad dollars to be directed to the big three ad networks – Facebook, Google, and Twitter. And while these criteria are good guides to determine where to spend your advertising budget, it doesn’t guarantee performance.
Too often though, this realization happens after there has been a significant amount of money spent on installs that don’t back out from an ROI standpoint. There are two main reasons it takes so long to uncover what’s happening behind the scenes:
Lack of targeting and optimization strategy
When a company chooses to spend their budget on the big ad platforms based on the above mentioned criteria there is often times a blind performance expectation that prevents marketers from putting too much thought into the targeting and segmentation strategy up front. This leads to campaigns that look good on the surface (cost per install) but when you start to dive deeper you quickly see scenarios such as Audience A having a $2 CPI and a 5% conversion rate from install to purchase and Audience B having a $5 CPI but with a 20% conversion rate from install to purchase.
Choosing the right audiences early is crucial to ensuring that you are getting your ads in front of relevant, qualified audiences who are actually going to use your app, make a purchase, etc. To begin developing a sound targeting strategy, you need to understand who your target user or customer is in detail. How old are they? Where do they live? How much money do they make? Etc. This helps guide your thinking and ultimately the mapping of the information you have on your target customers to the targeting options available on the ad platforms.
Poor or improper event tracking
Without being able to track what happens after an install takes place you won’t be able to optimize true top performing audiences and creatives. You’d be surprised by how many companies lack even the most basic event tracking within their mobile app. The instant gratification of seeing installs come in at a low CPI can de-prioritize the need for better tracking. Especially for companies who don’t have goals that are aligned with down-funnel actions.
There are a plethora of mobile app attribution and analytics tools to choose from to help you measure installs and in-app user engagement. Spend the time doing your research to make sure you select the right tools for your business needs. It can take some time to get familiar with these tools and implement them so you want to be sure you are choosing the right ones from the get go. A nice thing about the big three ad platforms is that they offer very seamless integration with various mobile measurement partners and this can take a lot of the setup work off your plate.
Challenges Ahead For The Big Ad Platforms
In addition to developing clear goals, a sound strategy, and full-funnel tracking, the ad platforms themselves are pushing app developers to think about install quality as they know if a developer wastes a bunch of money on low quality installs they are going to eventually write off the platform and shift budgets to other ad networks. So the platforms are actively building tools to help mobile app developers focus on the right right metrics and goals to prevent them from moving their spend to other networks. For example, Facebook recently released a new feature on its advertising platform that allows mobile app developers to bid and optimize their campaigns towards a post-install event. Google also recently released a very similar feature.
At a certain point, the risk of spending advertising budgets on lesser known, smaller ad networks gets re-evaluated if the big platforms aren’t driving ROI. I’ve seen this happen multiple times in the past several months – where a company starts taking budget away from Facebook or Twitter and reallocating it to other networks in pursuit of finding better ROI.
This issue is exacerbated by the rising cost per install on the big ad platforms. As economics has taught us time and time again, when there is a surge in demand (as has been the case for ad inventory on the big three ad networks) the price increases. This makes it even more difficult to justify spending money efficiently on these ad platforms.
Overall this is a good thing as it represents marketers shifting their budgets to where they see ROI vs. what’s easiest to manage or what’s perceived to be less risky. It definitely requires more work to evaluate and test many different channels, especially when oftentimes they have unique settings and targeting options. But for ROI-conscious marketers this is the reality of what’s required to succeed in the competitive mobile app install world we live in.
Mobile app installs are not created equally. Marketers who have proper measurement and a thoughtful optimization strategy – combined with the willingness to adapt and test different channels constantly – are going to be the marketers who succeed long-term. You don’t get ROI on paid marketing spend without working hard for it.