Brands are starting to get more comfortable with performance-based app marketing – but they’re still transitioning.
“Even just a year and a half ago when you talked to brand people, things like yield or breaking out ROI numbers by ad partner were like foreign concepts,” said Deniz Gezgin, director of digital marketing at Topps, which has seven different mobile apps in addition to its legacy business around baseball trading cards and sports memorabilia. “But fast-forward to now and they’re starting to get more data-driven in their thinking.”
That increased reliance on data is due to growing mobile use and a maturing mobile market, which requires tactics centered more on engagement and reengagement than on driving install counts.
With the cost of app installs on the rise, an app marketer’s job is far trickier today than when downloads were the primary KPI. Although cost per install is still the primary buying model brands use for paid user acquisition marketing – a report released Monday by mobile attribution company Apsalar and VC firm Thomvest Ventures found that 75% say they still primarily buy on a CPI basis – cost per action is gaining traction.
Seventy-eight percent of the app marketers polled said they care more about user quality now than they did a year ago, and that they consider lifetime value and uninstall rate as key metrics when assessing media vendors and campaign success.
“There is a lot more attention and effort around re-engaging existing users,” said Gezgin.
And, in turn, app marketers are starting to spend more on remarketing. According to mobile audience platform Moloco, mobile retargeting campaigns are 7.4 times more effective than user acquisition campaigns, while conversions among re-engaged users increase on average from 8% to 40%.
Budget is starting to follow, some of which is coming over from desktop retargeting spend. Apsalar found that 58% of app marketers have tried app remarketing and 28% said they plan to within the next year.
“Last week I was pitching a hopefully future client at a big brand and she told me they’ve gone from spending $5 million on user acquisition a month to spending $500,000 on UA and $7 million on remarketing,” said Apsalar CEO Michael Oiknine. “Two years ago they weren’t spending any money on remarketing at all. And guess how many people are managing that budget now? Just one. And we’re talking about a big company here.”
Lack of resources is a problem for mobile teams, although that’s starting to change.
Gezgin, who’s been with Topps for about seven months after stints leading product and user acquisition efforts at a smorgasbord of gaming companies, including Machine Zone, Zynga and Gazillion Entertainment, was brought on by the brand as part of an effort to focus more on mobile ROI.
“I’m trying to make sure we collect, consume, analyze and react to the right data,” Gezgin said. “Overall, at companies that are newer to mobile, including the company I work at now, data has been what’s missing.”
But it’s still a work in progress. Gezgin’s team, for example, is fairly small – just six people – and still somewhat separate from the rest of the marketing department.
That’s fairly typical. According to Apsalar, 65% of app marketing teams have five or fewer people.
“App marketing teams at some of the bigger brands are in a complete silo,” said Nima Wedlake, an associate and research lead at Thomvest. “They’re usually a small team within a bigger organization. While that was probably necessary in the early days when no one really know what success looked like, the disadvantage today is that they don’t get to leverage data from the rest of the company.”
Which is why it makes sense to unify digital and mobile marketing efforts under a single umbrella, like what’s happening at Topps especially as the demands on app marketers increase, Oiknine said.
“I expect the mobile guys to take over in time,” he said. “But these teams will have to expand because I don’t see how they can continue the way they’ve been doing it with all the increasing complexity coming at them.”
