Mobile Growth: How to Win at Paid User Acquisition
The marketplace is changing – fast. It’s amazing the difference a few years can make in the mobile gaming space. In 2011 – the heyday for organic user acquisition – consumers were actively seeking new touch-first experiences to light up their smartphone. As more users actively searched app stores that showcased fewer titles, it wasn’t a stretch to get the eyeballs and consideration needed to acquire a healthy user base. By 2014, that dynamic changed. With over 1.5 million apps in the store organic user acquisition plunged and that trend has continued over the last three years. For many, paid user acquisition is now a necessity.
Today, acquiring a user base that generates enough revenue to build and sustain a healthy, growing business requires an efficient paid user acquisition strategy — not just to generate downloads, but to act as an extension of your product and re-engage audience segments that generate the most revenue.
Leaders in mobile gaming, like NexonM and MZ, have mastered the craft of acquiring high value users efficiently and at scale. They pour hundreds of thousands of dollars into demand for their titles and reap massive returns as a result.
Going up big against big budgets as a scrappy dev shop might sound intimidating, but if you have an ROI-positive product, the future is bright. Despite overall fewer apps being used by the average user, revenue earned by apps in the gaming category is expected to nearly double by 2020. And with new markets like China showing trends in demand similar to what the U.S. experienced in 2011, developers with the most leverage have the most to gain. Innovations like on-demand capital from Braavo and increasingly-sophisticated mobile targeting are making it possible for gaming entrepreneurs to compete – and even win – against traditional category leaders.
To thrive in today’s app economy, it comes down to two major factors: leverage and efficient user acquisition. You need access to cash to compete for consumer attention and that cash must be used as effectively as possible.
We’ll dive deeper into access to capital in a separate post. For now, here are the cornerstones to a winning paid user acquisition strategy.
Target high value users
It’s not enough to generate downloads. Your ad dollars need to acquire users that will stay engaged and generate revenue. A dollar spent on a user that doesn’t make an in-app purchase, subscribe, or stay engaged enough to become profitable via exposure to ads represents an opportunity cost.
To-date, one of the most efficient and scalable tactics for acquiring high value users en masse is through a combination of techniques on Facebook.
- Segment your user base by revenue (consider profits from ad exposure in addition to in-app purchases)
- Use your most profitable segment as a seed audience and upload it as a Custom Audience on Facebook
- Build a lookalike style audience based on this seed audience. As you scale the audience it dilutes, so consider interest based audiences beyond 5% lookalikes.
- Focus App Event Optimization on revenue-driving activities (subscriptions, in-app purchases, rewarded video, etc.)
Optimize ad creative
Great audience targeting is only half of the journey. The right ad creative is what inspires action and ultimately gets you the users you need to grow.
Just as you must optimize how your app is represented in the store to encourage downloads, you must tailor the way your app appears in an ad based on the channel. Increasingly, that means using video and using formats that eliminate friction for the user as much as possible.
Whether you’re investing your user acquisition budget on Facebook ads, Apple Search Ads or experimenting with emerging platforms like Snapchat, ensure your content is formatted appropriately. Decisions on whether to use vertical, square, or landscape video formats or how to design content for auto-play versus on-demand viewing seem small, but can make a big impact on performance.
Even more nuanced, Facebook’s ad platform extends to Instagram and their own network of sites, but the content displays differently on Instagram than it does on Facebook which could leave out important context. Put in the work to make sure your ad renders effectively on every channel, even if the share a common ad platform.
Double down on analytics
If you want to make the most out of every dollar you need more than just top line metrics. To be successful, you will need to know how your most valuable users engage with your game, why people abandon and what your most efficient sources of acquisition are. Additionally, you’ll want to optimize targeting to reach users that result in lower churn, higher revenue over time (customer lifetime value) and ideally convert to your broader portfolio of games.
While the app stores are continuously making their analytics platforms more sophisticated, 3rd party tools like Kochava and Amplitude provide a detailed and actionable look at how users are behaving within your app. Use these insights to create and test hypotheses and piece together a profile of your most valuable users that you can use to inform ad creative that performs even better.
Learn how you can rapidly scale your app business with capital for growth. Our Accelerate and Extend products offer non-dilutive funding to help you build momentum and capitalize on ROI-positive marketing.