Best Practices for Growing your Mobile App Business. Proven ways to increase your ROI and get your app in the hands of loyal users

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1 Best Practices for Growing your Mobile App Business Proven ways to increase your ROI and get your app in the hands of loyal users

2 Competing For Users With more than a million mobile apps competing for users, how do you make certain that your app: Is ranked highly enough to be discovered? Gets enough cost effective downloads to scale your business? Is downloaded by loyal users who are profitable? And how do you accomplish all this without draining your budget in the process? If you re like most companies, you re struggling for answers. The good news is that a new technology platform is in use today by top brands and leading app developers to overcome these challenges, and build successful, sustainable mobile app businesses. 2

3 Although you re competing with hundreds of thousands of other apps, you can take solace in the fact that you re not alone because your competitors are facing the same challenges: Overcoming the Challenges The costs to find users are too high. What most app marketers will tell you is, We took a financial beating trying to get users. We spent a ton of money and didn t get any volume at all. And many who did get the volume say, We spent tons of money on volume, but our cost-per-user was orders of magnitude higher than our business plan. Finding users is complex, and we don t fully understand it. We have a great app, but we have no idea how to get our app into the hands of users. This is all new to us, and there s really no way to know for sure if our advertising will deliver the results we need. So we experiment and test and hope we hit our target. It s all extremely time-consuming. We re having some success, but we can do much better. We just don t have the bandwidth to make it happen fast enough. The ad networks are getting us downloads, but they have no way of telling us if the downloads translate into profitable users. The problem is that it is much too time-consuming to work with multiple traffic sources, and we have limited staff to make it happen. So we feel like we re settling. The market keeps changing. Just when we figure out how to market our app, the app stores make changes that render our marketing obsolete. So you re stuck. 3

4 But how can you ensure that your app achieves the highest possible number of downloads to support your business model when there are over a half million apps competing for users? The best way for your app to be discovered is for it to be listed in the top ranks within your app s category. But there are so many other apps battling for a fixed number of slots on a daily, or even hourly, basis. And every day it becomes more challenging to compete because the number of slots is fixed while the number of apps fighting for those slots increases. Simply put, if you don t solve this problem, you may not have a business. But how do you solve it? 4

5 The Unfortunate Reality You may find yourself in an unfortunate reality that is also faced by your competitors. You have little choice but to give your money to an ad network and hope it delivers the results you need. What most organizations are finding, though, is that they re not achieving their goals. So why isn t this working? There are several reasons why your approach may not be working to the degree you require. Here are three of the most common reasons: 1. You may not be working with a full complement of traffic sources. 2. You may not be tracking ad performance and optimizing ad spend in real time. 3. The fact is that ad networks are not focused solely on your needs. Let s explore each of these in further detail. 5

6 Why today s approach may not be working. 1. You may not be working with a full complement of traffic sources. To achieve peak results, it is vital to generate traffic from a variety of sources including: Ad Networks that display your ads on their network of mobile publishers. Social Media: platforms such as Facebook and Twitter provide tools to reach very specific audiences to promote your app. Real-Time Bidding Platforms that allow you to bid on traffic in real time. Incentive-Based Download Programs that allow you to bid on downloads by users who are incentivized to download your app. By limiting the number of traffic sources you use, you re at considerable risk of limiting your results. For example, when working with only three mobile ad networks, you ll be missing opportunities to identify potentially higher performing traffic from many other available ad networks; sources that can lead to larger numbers of loyal users. In addition, you re not maximizing your ROI over a larger audience by identifying opportunities for lower acquisition costs. And finally, by working with a small number of traffic sources, you are in danger of subjecting your app to audience saturation. Successful mobile app marketers recognize that working with several traffic sources and ad networks increases their success. Casting a wide net across multiple networks is more efficient than working with one network and can be more effective by a factor of 3X. 6

7 But working with multiple traffic sources is easier said than done. It is extremely challenging to work with multiple traffic sources, let alone multiple properties within each source type. Some of these challenges include: It s complex and time-consuming. Working with just one or two networks is complex and time-consuming enough. So how can you possibly work across dozens of traffic sources spanning numerous networks, real-time bidding platforms and incentive based programs? Working with multiple networks increases the workload and complexity exponentially. How many people would you have to hire to manage multiple insertion orders, consolidate different types of reports, and conduct ongoing performance analysis? There s no way to measure user value. Not all users have the same value. Some users have a higher propensity to view ads, some will complete a registration, and others will make a purchase. In this regard, it s important to measure the quality of users acquired through each traffic source to determine exactly how much each user is worth, to ensure traffic sources are ROI positive. Disparate reports are difficult to track. Each network provides a different type of report, tracking different types of data. For example, some networks report that a download occurs on the day an ad is displayed. Others report when the app was physically opened the first time. Data is reported differently from network to network, and somehow you need to reconcile this. It takes an enormous amount of work to consolidate all of these reports, and without the ability to do so, you can t identify the best value for your spend. There are numerous technical complexities. Each traffic source requires you to embed tracking code into your app. All this code can compromise your app s performance and cause several technical complexities. Moreover, the need to write multiple lines of code requires engineering time and resubmitting to the app store for each additional traffic source, and there are dozens of traffic sources out there. 7

8 2. You may not be tracking ad performance and optimizing ad spend in real time. To get the highest possible return from your ad spend, you must continuously track and analyze all of your ads performance variables and make adjustments, ideally in real time. It s complex and time-consuming to do this when working with just one network, let alone several. You may not have the in-house expertise or the tools to perform the necessary analysis and adjustments. But if you don t track performance and adjust your ad buy in real time, you may be spending too much or missing out on users from the best performing sources. 3. Ad networks are not focused solely on your needs. Ad networks serve, not only you, but also the publishers within their networks who display your ads. It is in the networks best interest to give business to each of their publishers, and this could be in direct conflict with your objectives. So while the networks are important to your business, it s up to you to use them properly. You must be pro-active about identifying the publishers within the networks on which to place your ads. Then you have to continually track performance and adjust your ad spend based on this performance. More importantly, the networks do not have the ability to focus your ad spend on delivering the types of users you need most: Organic Users and Loyal Users. While it is true that rank and downloads are critical to your success, in reality, they are just a means to getting what you really need: organic users and loyal users. No ad network has a method for understanding how to acquire organic users and loyal users. Ad networks are focused primarily on two things: ads and clicks. So it needs to be up to you to place a strong emphasis on driving downloads from organic users and loyal users. But what are organic and loyal users? 8

9 Organic Users Organic users are users that actively seek and download your application from app stores without seeing an ad. According to data compiled from Fiksu, Inc. research, these users are significantly more likely to become loyal users than those who download your app after viewing an ad. Therefore, as you develop your user acquisition plan, think not only in terms of number of downloads, but also think in terms of number of organic users. Loyal Users At the end of the day, you want downloads by loyal users because loyal users use your app repeatedly, make purchases, and spread the word on your behalf. It is loyal users on whom you build your business. A download, or even an app launch, does not mean that you have a loyal user. So what is a loyal user? Depending on your business, a loyal user can be defined differently. If your company is membership-based, a loyal user might be someone who registers and becomes a member. If you re a retailer, a loyal user may be a customer who makes a purchase. If you re an app developer who relies on in-app ad revenue, a loyal user may be someone who opens your app at least five times, making himself or herself available to see ads. Rapid and sustainable app-business growth is all about finding loyal users. However none of the ad networks have a viable method for understanding how to obtain loyal users. This is up to you. 9

10 Best Practices For Acquiring Loyal Mobile App Users And Growing Your Mobile App Business Following are proven best practices for promoting your app for profitable and sustainable loyal user acquisition and business growth. By employing these best practices, you can overcome the challenges outlined in the previous pages, and greatly increase the likelihood of finding the right users at the right cost. 1. Work with as many traffic sources as possible. If you are working with only one traffic source type (mobile ad network, real time bidding platform, incentive based program), or even just one of each type, it really is too small a universe to be successful. You are missing out on valuable opportunities to identify the best traffic sources for driving the largest numbers of loyal users, and to scale your business. By working with several ad networks, you can also insulate yourself from saturation on any one network, which typically results in higher acquisition costs. The best scenario is to try to work with as many traffic sources as possible. This will enable you to reach your largest potential audience, realize the lowest-possible acquisition, and also protect your app from audience saturation. To attain the best results, app marketers should track users from at least ten traffic sources and at least two of each traffic source type. 2. Focus on acquiring downloads from loyal users. None of the ad networks have a method for understanding how to deliver loyal users, so you must take the initiative. The best ways to get loyal users are to: 1. Define the characteristics of your loyal user. 2. Automate the tracking of these loyal user characteristics. 3. Identify the traffic sources that generated these loyal users. 4. Steer your ad spend toward these traffic sources. 5. Track all of your users interactions with your app. 10

11 3. Drive and track downloads from organic users. Organic users, those who actively seek and download your application without any marketing influence, have a much higher lifetime value than ad-driven users. These are the users you should target as they have a higher propensity to become your loyal users. Your starting point for acquiring organic users is to establish and measure organic lift. A vital dynamic that exists in mobile app advertising is the tight relationship between conversions, rank and the effect both have on generating organic users. This relationship is called organic lift. This is the natural coattail effect that conversions have on the acquisition of organic users. There are different ways to track organic lift in the Apple and Android app stores. Apple App Store In the App Store, ad-driven downloads improve rank, which allows more users to discover your app organically and, in turn, increase organic downloads. Therefore, conversion to organic lift in Apple s App Store is the ratio of organic downloads per ad-driven downloads. Google Play In Google Play, the driver of organic lift is very different from Apple s App Store. In Google Play, app usage is key to driving organic downloads. As you acquire new users, the app s usage increases. As that usage increases, so does the app s rank within Google Play. This improved ranking is what yields the higher number of organic downloads. The good news for advertisers is that, once improved rank is achieved, the rank does not degrade the minute an advertiser stops spending. As such, the advertiser continues to enjoy incremental organic downloads beyond those generated during a campaign. 11

12 Over time, you can develop profiles for organic users and ad-driven users to understand what your loyal user funnel looks like to help guide your ad spend and measure ROI. As you track your advertising program over time, be sure to continuously track organic lift and use this as a key measurement to help guide your ad spend. 4. Determine your optimal category and rank position to maximize cost per loyal user. What s the best category for your app? What is your optimal rank position within that category? The answers are simple: It s the category and rank that generates the most loyal users for the lowest cost possible. Unfortunately, testing various categories and rank positions is a time consuming challenge. Here are some tips for defining your optimal category and rank position: Category Most apps can fit in multiple categories. For example, many games contain aspects of Social Networking, Music or Entertainment. Rather than defaulting automatically to the Games category, consider whether or not your app would be better differentiated in an alternative category. Rank In Category Depending on your category, you will set a different optimal rank target. For example, if your app is in a large category, such as Games, your rank objective may be to get into the top 25. Conversely, if your app is in a smaller category, your objective may be the top five. Further complicating this is that some apps get no more organic users at a rank of 15 than 25. So why pay for rank 15 when there is no difference between organic lift in rank 15 or 25? 12

13 Gain an understanding of your optimal rank, and track performance continuously to ensure that you are not spending more than you need to spend. This will also ensure that your rank position is delivering the required number of users. Rank Overall Further complicating matters is the need to understand how overall rank impacts organic lift. Both the Apple and Android stores measure overall rank across all categories. This overall rank is highly visible in both app stores and, as a result, the overall rank can have a dramatic effect on organic lift. App Marketers seeking the highest possible organic lift ratio may be better served seeking the optimal overall rank position regardless of category rank. As such it s just as important to test organic lift based on overall rank and category rank. 5. Understand the number of loyal users generated from each traffic source. Based on your definition of a loyal user, gain an understanding of the number of loyal users you are generating from each ad network and traffic source, and at what cost. Be sure to consider which intra-network sources are yielding the most efficient traffic, and consolidate spending to those sources. 6. Insulate yourself from variations of available traffic at a given bid. Traffic variations, and therefore ad costs, can change on a daily basis. For example, you may get a lot of traffic for five cents per click on one day, and the next day that same traffic costs 10 cents per click. Your costs just doubled. You can insulate yourself from these fluctuations by tracking traffic variations on a continuous basis, and moving your ads to more cost-effective traffic sources. 7. Define lifetime value per user. Define your lifetime value per user to determine how much you re willing to spend to acquire a user. 13

14 8. Define cost-per-conversion. Determine your cost-per-conversion target for a given volume of users. You may be able to get away with a nickel per click, but to double your volume you may have to pay 15 or 20 cents per click. It s important to understand how much to bid for a given volume to deliver the best possible ROI. 9. Target best-performing days of the week. Understand which days of the week are best for acquiring loyal users and adjust your ad spend accordingly. 10. Track ad performance based on downloads. Determine which ads and traffic sources achieve the highest download rates, rather than click through rates, because you don t want to pay for clicks that don t lead to downloads. 11. Define your app title with the goal of conversions. Define your app title not only in terms of brand but also in terms of app store search results and conversion of users who arrive on your app store landing page. For example, if you have a photography-oriented app, speak to the functionality of the app in its title. This way when a user searches for picture color you are as likely to appear in the app store search results as Photography. 14

15 12. Write your landing page copy for consumption on mobile devices. Compose store landing page copy not for how it looks on the desktop where most people proofread it, but as it appears on the device where the majority of app download decision-making occurs. 13. Test different creative. Conduct a/b testing of your ad creative across all traffic sources to determine which ads perform the best and swap out lower-performing ads on a per source basis. 14. Use short and punchy ad copy. Your ad should be more similar to search engine AdWord copy rather than traditional ad copy because you have limited space. Less is More. 15

16 Put These Best Practices To Work For You A breakthrough mobile app user acquisition platform has made these best practices a reality for many of today s leading companies, from established consumer brands to fast growing mobile ventures, looking to build scalable businesses around their mobile apps. The Fiksu for Mobile Apps user acquisition platform was developed by a team of seasoned entrepreneurs and PhDs, and is used by leading businesses to overcome the challenges of generating large quantities of loyal app users, while lowering user acquisition costs by as much as 3X. With the Fiksu platform, businesses are able to: Easily work with all ad networks Track ad performance and optimize ad buys in real time Generate more organic and loyal users at a lower cost The Fiksu platform reaches the largest potential mobile audience and converts a significant volume of new users at substantially lower user acquisition costs. Often, the platform delivers a download for about the same cost as a keyword click. Following are actual results Fiksu achieved for the app Fluent News Reader. Before Fiksu With Fiksu Category Ranking Top 100 Frequently Top In Category Downloads per month 10, ,000 Average cost per download $3.00 $0.20 Cost per loyal user Unknown $

17 Fiksu technology With over 100 billion events processed, the Fiksu platform has compiled extensive amounts of data that gets deeper and smarter with every download. The Fiksu platform employs a breakthrough predictive algorithm that converts this intelligence into real-time actions that: Optimize traffic allocations in real time Raise an app s rank in app store environments Improve cost/performance Generate ad-driven and organic downloads and use by loyal users The Fiksu platform tracks user interactions with your app after download, and applies this intelligence to ongoing ad purchases to generate a higher percentage of loyal users. In addition, Fiksu measures the interaction between advertising and rank to optimize the two variables for the lowest possible acquisition cost per loyal user. Fiksu s focus is on optimizing your marketing spend to generate loyal users. This is achieved by associating app usage data with the channels and times in which the users were acquired, to continually improve marketing spend allocation. Fiksu utilizes data from billions of app events to cost-effectively deliver loyal users to its clients often for less than $1.00 each and sometimes for as low as $

18 Work with all traffic sources The Fiksu platform spans the entire mobile app ecosystem including an extensive number of ad networks, real-time bidding platforms, and incentivized download programs. Fiksu s intelligent algorithms optimize results in real time, not just within each of these sources, but also across all of the sources. Managed technology platform The Fiksu platform is accessible to any company as a fully-managed technology platform. There is nothing for your staff to learn or to operate. When you use the Fiksu platform, you are assigned an expert Fiksu project manager who is dedicated to achieving results. Fiksu takes the complexity out of tracking and reporting. You need only one piece of tracking code and one insertion order to run ads on all the networks. With just one interface, you get a comprehensive view of all of your key metrics in real time, and gain intelligence on what really matters. 18

19 US Headquarters Fiksu, Inc. 101 Arch Street, Suite 304 Boston, MA Phone: APAC Fiksu, Inc. 137 Amoy Street #02-01 Far East Square Singapore Phone: EMEA Fiksu, Inc. 2nd Floor Berkeley Square House Berkeley Square London, W1J 6BD Phone: +44 (0) Here s Your Next Step Discover how the Fiksu platform can get you fast and predictable results. To learn more, or to set up a test, please contact Fiksu today. :: :: telephone :: website :: blog follow us: Copyright 2012 Fiksu. All rights reserved. Fiksu and Fluent News are registered trademarks and the Fiksu logo is a trademark of Fiksu, Inc. Apple and the App Store are registered trademarks of Apple, Inc. Android is a registered trademark and Google Play is a trademark of Google, Inc. All other trademarks mentioned herein are the property of their respective holders.

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