April 2017 | ayeT-Studios

App Marketing Costs and How to Calculate Your Budget

April 21, 2017/in Mobile Marketing/by Pascal Ludynia

Fulfilling your dream of being a successful app developer is not sorcery: It takes hard work, dedication and making the right decisions. After writing the code for and designing your app, you also have to consider your app marketing costs and how to spend your budget most effectively.

We have mentioned the different ways to calculate your budget many times on this blog. However, in order to give you a complete overview of this topic, we have listed the most important calculations in this article and seperated them in two categories:

Calculations involving capital, whether spent on or received by your customers.
Calculations on how frequently a user interacts with your app.

Firstly, select your key performance indicators (KPI), which enable you to make smart business decisions about the direction of all current app related projects. Which KPI’s are important totally depends on you and your company.

Following this, we are going to present some of the most common budget calculations with regards to your user acquisition strategy.

Calculations Including App Marketing Costs and Revenue of Your User Acquisition

These kinds of calculations only work retrospectively, meaning that you need data from previous user acquisition campaigns or you need to analyze your running campaigns. This is a very interesting aspect because you get numbers to calculate the app marketing costs and a relation to other parts of the development process.

Let’s assume this: You can spend $10,000 for your marketing campaign. What will the outcome be?

Cost Per Install

The Cost per Install (CPI) measures the app marketing cost that you carry for ads that trigger an installation of your app.

CPI varies much according to the ad formats you use. If you are using non-incent banner ads, you will most likely pay much more for each install than when buying downloads via an incentivized offerwall. If you use an incentivized offerwall, you can calculate exactly how many installs you will get for a certain amount of money.

So, if you use a professional advertiser and agree on a price i.e. of $0.20 per install, you can generate 50.000 installs with your marketing budget of $10,000 – a very clear result when calculating the app marketing costs.

Cost Per Acquisition

It is often called Cost Per Action, too. This simple but very interesting formular helps in calculating app marketing costs because you can measure very clearly how effective your marketing efforts are. It is not limited to a specific model like CPI or CPAU.

For the mobile advertising industry, this pricing type is more commonly used for setting actions like completing a tutorial, reaching a certain level, registering an account or subscribing for a newsletter.

The defined action can be as specific as needed.

Cost Per Active User

The Cost per Active User measures the app marketing costs that you need to spend in order to reach users that will use your app actively.

Every company needs to define for themselves what ‘active’ means. In this case, you might also hear the term ‘retention rate’. (Click here for more information regading retention rates.)

CPAU is always higher than CPI, since it is not realistic for all bought installs to convert into an active user. If you spent $10,000 for your marketing and generated i.e. 50,000 installs and 10% of these users turn into active users, you spent 2$ per active user – if this is the KPI you are looking for.

Active users are more likely to generate revenue for your busines, making your user acquisition efforts very valuable.

Average Revenue Per User

The Average Revenue per User is the amount of revenue each of your active customers (on average) contributes in a specific period of time.

This is a very good indicator in two ways:

You can see how much money you get from a special group of your users that are very engaged with your app.
When calculating ARPU and including normal users, you get insight about at which point normal users are converted to active users – a good side effect when calculating app marketing costs.

Customer Lifetime Value

The Customer Lifetime Value (CLTV) makes you predict how long your customer uses and generates revenue within your app and therefore, how much the user is worth for you.

It should always be your goal to improve app features that are the most likely increase the Customer Lifetime Value of your users. Most of the time this translates into improving retention rate, session duration and total usage time per user for your app.

The opposite might be the case, however, if you operate a shopping. For example, the session duration will be reduced by optimizing the check out process after a user has added an item to his/her basket.

This faster check out process might result in shorter session durations but higher CLTV in the long run. Thus, be aware of what KPI’s you have to measure and improve exactly.

With the CLTV in mind, you are now able to calculate how much you can spend for every user in order to still make profit – this is what the calculation of your app marketing cost is about.

The CLTV depends on three factors:

Monetization (how much customers contribute to your mobile revenue),
Retention (level of engagement a customer has with your app) and
Virality (sum value of additional users a customer will refer to your app)

What Customer Lifetime Value (CLTV) depends on © ayeT-Studios

If you want to calculate the CLTV, use the following formula:

Following this link, you can read an article on how to find the right mobile ad format for your product.

Return on Investment

Return on Investment signifies the profit you make with your app in comparison to your investment. You take a look at this at the end of your user acquisition campaign because it summarizes your efforts in making money by acquiring new users for your app.

In our case, we assumed $10,000 for app marketing costs. Let’s say the total revenue was $12,000, so your ROI for user acquisition was $2000. A high ROI means that your profit is way higher than your investment.

As long as your ROI is a positive value, you are not making losses. Be aware that you might want to measure additional spendings to CLTV and Ad Spending like all other costs of the business you operate (rent, HR, infrastructure and so on).

Conversion Rate

There are many different ways to calculate your conversion rate; it all depends on your goals and what is important for you.

You might want to measure more than just one conversion within your conversion funnel from user acquisition to revenue generated to calculate the app marketing cost. That way, you would be able to improve your app on a more sophisticated basis.

There are at least two conversions we find worth measuring for almost any app type:

Installs / Active Users: You can calculate the number of users that installed your app based on your user acquisition campaign and then decided to take specified actions to convert into an active user.
Active Users / User Generated Revenue: You can calculate the number of users that are using the app and then decide to take action and to generate revenue, for example by doing in-app purchases.

Calculations not Inlcuding App Marketing Costs

You can get very useful information to calculate your app marketing costs the right way without looking at financial aspects.

Important factors for your budget calculation are, for example

how often users interact with your app.
at which point you lose their attention.

Churn Rate

With the churn rate you can calculate the number of users that delete your app in a specific period of time. It is a valuable indication of your users’ satisfaction.

Monthly Active User (MAU) / Daily Active User (DAU)

These are your key users. Try to get as much information about this group as possible because it will help you improve your app.

Retention Rate

This element indicates the percentage of customers you are retaining. The retention rate is not a defined term, you can measure different factors according to what you want to learn.

Daily Sessions Per DAU

Daily sessions per DAU helps you to determine whether or not your customers are returning to your app as often as you want them to.

Stickiness

This is an indicator for how many users engage with your app and a good measuring tool for you if you provide bigger updates for your app.

Session Length

If you measure session lengths, you can quantify the depth of a user’s relationship with your app.

App Launch / Load Time

Users want a fluent experience with your app, so keeping this number as low as possible is necessary.
As result, the KPI’s including money for calculations are not the only way to succeed. You need to know the behavior of your users; why and when they use your app.

Click here if you want to know more about the right way to promote your app.

Conclusion

In summary, we can state that calculating your app marketing costs (or the use of them) is not only limited to the factor of profit or revenue.

Retention rate, daily sessions per active users or session length are significant factors for the success of your app – and for the success of your business.

Try to aim for the KPI, which is most useful to your app marketing campaign and in this light, plan how to use your budget.

We at ayeT-Studios are an experienced team and can help you calculate the costs of your app marketing and lever your user acquisition.

Beneath, you can find information about our pricing:

Rewarded Advertising	Android (starting at)	iOS (starting at)
CPI	0,07$	0,15$
CPE	0,30$	0,30$
CPA (Signup, Registrations)	On request	On request
Rewarded Video (CPV)	0,020$	0,020$
Rewarded Video (CPM)	0,50$	0,50$

Non-Rewarded Advertising	Android/iOS/Website (starting at)
CPC	0,02$
CPM	2,00$
CPV	0,02$

Devices for mobile marketing © FirmBee/ pixabay.com

Mobile Marketing – Leverage Your Marketing Campaign

April 19, 2017/in Mobile Marketing/by Pascal Ludynia

We live in a mobile world! In our daily routine, we constantly use our mobile devices (smartphones and tablets). This trend gives marketers many new and exciting possibilities to advertise their products. Today, they can run a mobile marketing campaign in an attempt to capture the great potential of the mobile world.

The number of mobile users exceeded the number of desktop users in 2014 © ayeT-Studios

Mobile devices are not only used to play games, watch videos or chat with friends but mobile commerce is growing more and more every year. So, users get used to spending money on their mobile device.

Mobile Retail Commerce is growing rapidly © ayeT-Studios

In the following article, we want to give you an idea of which mobile marketing options you have, and how to use them to leverage the success of your product.

What is Mobile Marketing

The meaning of mobile marketing is already contained in its name: It is a non-static, non-local way to promote your product. It is a broader term for a digital marketing strategy aimed at reaching a target audience on their smartphones, tablets, and/or other mobile devices, via websites, email, SMS, social media and apps. In short: It aims to reach potential customers on their personal mobile devices.

What Does Mobile Marketing Aim to Do?

When reaching out to the personal device of a customer, you should have in mind where your advertisement will redirect your user to. Basically, you have two options for redirecting your users when they interact with your mobile ad: A website – if you are advertising goods and services or running your business with the help of a mobile website; or a page of a corresponding app store – if you are advertising an app. Some marketers, like Amazon, operate a mobile website and an app in order to sell goods to customers. They are likely to set up campaigns to trigger traffic for their mobile website as well as campaigns to trigger user acquisition for their app. Keep in mind that those two campaign types are much different in nature regarding set up, target, user flow and tracking.

In order to allow the customers the most appealing experience, not only the used advertising assets should comply with the conditions of mobile devices, also the website or app store page should be optimized.

Mobile Friendly Website

Mobile friendliness means various things:
The content on your website should not be too big. This way, the page can load quickly and the user does not have to wait. Obviously, the page should not contain any mobile specific errors, like links to other pages, which are not mobile friendly or faulty HTML-code. You should also make sure that your page can be viewed horizontally and vertically. Furthermore, avoid arranging your website in a way that users need to scroll horizontally.

To check whether or not your site is mobile-friendly, you can use a tool provided by Google and see in what way your website can be optimized.

Another crucial factor why you should consider to make your website mobile-friendly is the importance of the user experience. For the best user experience, engaging with your website should be flawless. If there are issues, the chance that the user will engage with your product or buy it, decreases significantly.

Since Google made mobile-friendliness a factor for the ranking of a website, you really should make the effort to get a good position in the search results.

Appealing App Store Page

App store pages itself are made to fit on any screen of a mobile device. Nonetheless, there are various options to make the store page special and let visitors download your app.

Name of the App

The name of the app is one of the first things a user recognizes when he or she is coming to your app store page. It should be catchy and unique and furthermore include one main keyword. The name should also indicate the purpose of the app and represent its main message.

Icon

The icon is also one of the first things a user will see, so you should create an extraordinary and distinct one thats every user can understand and recognize easily. It should invite the user to visit your page in the app store and finally download your app.

Description

If you managed to get users to your app store page, you can now show them what your app is capable of in detail. The description should be well-structured and show clearly what the app is about. Try to keep it simple and inviting and list the main features and functionalities of your app.

Feature Graphics, Screenshots and Videos

A picture is worth a thousand words! At least if you add screenshots that make it easier for users to understand what your app is about. Great screenshots emphasize the app’s sales arguments and its unique selling point.

Which Channels Can Be Used to Do Mobile Marketing

At this point, you know what to look out for when designing your your mobile website or app store page. Now, we want to show you different channels you can use to advertise your product with the help of mobile devices. Additionally, we will explain what you have to keep in mind when creating a mobile marketing campaign.

E-Mail Marketing

Email campaigns are one the most effective ways to use mobile marketing. About 54% of all emails are opened and read on mobile devices. And 69% of these are instantly being deleted if they are not optimized for mobile devices.

On this chart, you see how the opening rate of mails on mobile devices exceeds the opening rate on desktop pcs © lizmus.com / ayeT-Studios.com

If you plan to use an email campaign, there are certain things to keep in mind:

The “from“ field should be optimized to have a maximum of 23 characters displayed correctly. The subject line should consist of a maximum of 38 characters.
If you want to include a CTA (call-to-action), position it early in the message and make buttons at least 44×44 pixels wide, so that they are easy to “tap”.
Try to integrate coupons or benefit programs. Users in the digital era are very likely to use them or refer them to their friends.

The user is very likely to leave a page if it doesn’t fit on his screen, or takes too long to load. Therefore your CTA should always lead to a landing page, which is also optimized for mobile devices. Make sure to include metrics to measure the success of your campaign. Keep the design simple and include clear image buttons – the fewer fields you have, the better! Always keep the images re-sizeable for different devices. The page should also look well horizontally and vertically. Email marketing works great to get users to your mobile website and to your app store page.

SMS Marketing

Using SMS in your marketing campaign is a good idea because you reach the customer on his/her device directly. There are some facts that make SMS marketing interesting:

The open rate of 98% is significantly higher than email (22%).
Close to 50% of users in the U.S. make a direct purchase after engaging with an SMS-branded text.
It is conjectured that SMS are up to 8x more effective at engaging customers than other types of media.

When thinking about the benefit of reaching out to a personal device of a customer, you should also choose a specific style of words:

It’s better not to use slang and abbreviations.
Be very clear who is sending the message.
Keep the text under 160 characters to only send one message.
Offer the recipient something that has a real value.
Insert a clear call-to-action.

Like Email-Marketing, SMS-Marketing works very well in getting customers to your mobile website or app store page on mobile devices.

App Based Marketing

Mobile devices are mostly used with applications. Many of these apps are free but still have to generate revenue for the developer. So, many developers decided to monetize their app with the help of showing advertisements while the user interacts with it. In the next paragraph, we will describe which in-app advertising methods are available on the market.

Banner

Banners are the founding stone of mobile advertising and improved a lot in the past years. They are displayed at some part of the screen, with a standard size of 350×50 pixel. In contrast to the beginning when users thought of banners as disruptive, nowadays, they can be implemented much more effectively in the context. The prototype of web banners was developed really early on. Today, banners don’t have to be static, they can be animated, have a sound-layer or even get the information of a live-stream!

Interstitial

You could also call an interstitial a full-screen banner because it is displayed on the whole screen. By this, more information can be provided and users receive an immediate impression of the product.

Video

In the last years, mobile videos have had a real boost. According to eMarketer, the numbers of mobile video ad budget spend in 2014 doubled in comparison to 2013 – from $720 Million to $1.5 Billion. This progress shows the huge potential mobile videos have as app promotion service. Due to the duration of the video, more context can be shown to your audience.

Rewarded Video

An option for using mobile video ads in an incentivized way are so-called rewarded videos, where users receive a reward for watching the whole video.

Native

This is the modern type of banner, where ad components are displayed. When choosing the right place and structure of the ad, it can be very effective: Users won’t be disrupted when being online and will see the ad as part of the app.

Rich Media

Rich media is a digital advertising term for an ad that includes advanced features like video, audio, or other elements that encourage viewers to interact and engage with the content. While text ads sell with words and display ads sell with pictures, rich media ads offer more ways to involve an audience with an ad. The ad can expand, float, etc. You can access aggregated metrics on your audience’s behavior, including number of expansions, multiple exits, and video completions to get granular data on the success of your campaign.

Offerwall

This ad format describes a page in an app where different offers are shown to the users. They can choose and complete an offer and receive a reward in exchange. Offer types may vary, from downloading and using a mobile app to watching a short advertisement about a certain product to completing a quick survey. It is always a good idea to scale the size of the reward according to the amount of work a user has to do to fulfill the task.

Push-Notifications

These are alerts and messages delivered by apps to the user. The messages appear on the home screen of a user device even if he/she didn’t open or isn’t engaged with a specific app. The user needs to have downloaded an app and agreed to allow push notifications, which 70% of the users do.

Some examples of push notifications:

Personalized messages based on the user’s profile
Reminders
Promotional messages
CTA for a specific goal or event

QR-Codes

QR codes allow customers to scan a 2D image with their phone, which leads them to a webpage without entering a URL. This kind of marketing is a good mixture of classical offline and mobile marketing, because you can lead users from i.e. billboard or print magazines to your mobile appearence.

Most of the previous ad formats can also be used on mobile websites itself to advertise your product or app. We will show you which formats fit for which products in a table below.

The Costs of Mobile Marketing and How to Calculate the Budget

To calculate the costs of your marketing efforts, you have to determine the most important KPIs (key performance indicators) for your business. You should just ask yourself what you’re aiming to achieve with your mobile marketing campaign.

This can be, for example:

Do you want to increase mobile traffic of your mobile website?
Do you want to increase the conversions of email messages?
Does your brand need to improve its general awareness?
Do you want to increase the sales on mobile devices?

Below, you will find some of the most established indicators on how to calculate your budget.

Return on Investment

Return on investment signifies the amount of additional profit you make with your mobile marketing campaign. So, look at this at the end of your mobile marketing efforts since it summarizes how much money you’re making through advertising.

You can use this formula to calculate the revenue you generate by advertising either a product, service or an app.

Conversion Rate

This KPI is very important because converting a visitor into a customer is the ultimate goal of any marketing campaign – and with this formula you can calculate it very easily. However, a completed purchase is not always the only conversion you want to achieve. A newsletter subscription, the setup of an account or even a (potential) customer clicking on your ad, can also be a conversion you want to trigger.

Cost Per Install

This KPI is used to calculate when you’re advertising an app. The Cost per Install, or CPI, measures your expected app marketing costs for ads that trigger an installation of your app. CPI varies a lot according to the ad formats you use. If you are using non-incent banner ads, you will most likely pay much more for each install than when buying downloads via an incentivized offerwall. If you use an incentivized offerwall, you can calculate exactly how many installs you get for a given amount of money. Nevertheless, buying an install doesn’t necessarily mean you are also buying a loyal user that spends money for your product. Therefore, other KPIs were established to measure user engagement more precisely.

If you want to get to know more about app marketing specialized KPI’s, read this article!

What to Think of When Creating a Mobile Marketing Strategy

When thinking of developing a mobile marketing strategy, you should keep in mind what kind of targeting options mobile devices offer you.

Here are 4 Steps you can follow:

Step 1 – Define Your Targeted Group of Users

Thinking of what your audience is should always be the first step when creating a mobile marketing campaign. Make a particular point to detail your target audience’s mobile habits. Are they going to complete a purchase on a smartphone? Is the main percentage of their web usage happening on mobile devices?

Some interesting points:

56% of B2B buyers use mobile devices often to get to the vendors content.
95% of grown-ups use their mobile device primarily to access content or information.
65% of all emails are first opened on a mobile device.
48% of all users begin their internet session on a search engine

It is always good to measure how users approach your website. You can monitor that with Google Analytics.

Step 2 – Set Goals

Before you can work on running a successful mobile marketing campaign, you have to be sure of what “successful” means for your efforts. Here are some examples of questions you can ask yourself to determine worthy goals:

Are you already doing something for the mobile market? This defines your starting point.
If you are already advertising on mobile devices, how are your campaigns performing?
How will a mobile marketing campaign fit in your overall marketing strategy? You should have a reason when you want go to mobile.
What group of users are you targeting?
How can mobile media channels get connected with your already existing channels?

Step 3 – Choose your KPI’s

Just like all other marketing efforts, mobile marketing campaigns also need to get optimized and tested. Think about what realistic and measurable KPIs are to define the success of your campaign. You can measure the Costs Per Install, Return on Investment, Conversion Rate and many more. In order to choose the right KPI you should ask yourself:

Do I want to increase the Conversion Rate?
Do I want to increase the traffic or the sales directly?
Does our brand need to improve the general awareness?

Step 4 – Monitor the Mobile Metrics

It is important to get as much information as possible on how the customer/user engages with your product. You can get help of various tools:

Metrics of Your Mobile Website

Google Analytics can help you measure mobile usage of your website:

The data about conversions can indicate whether or not the landing page should be optimized for mobile devices.
With Google’s given data, you can see how well your audience engages with the content.

When adding the Device Category field to the Site Content dashboard, you can quantify the traffic to each individual page on your site. You can also get information on which mobile page is most viewed, which device is most used and see how much web traffic you have compared to desktop PCs.

Metrics of Your App

If you published your app in the Google Play Store, you have great possibilities to get insights on how which user gets in touch with your app. You can get useful data with the help of Google Analytics or pull it from the developer console itself.

What is the conversion rate for play store page visit to app install for your app?
How many visitors do you get from AdWords-campaigns and how do they convert?
You can set every mobile marketing ad with a specific UTM-Tag and the Developer Console will show you in detail how many users visit which ad and convert into app users.
How many visitors come from Google Search?
How many visitors come from third-party referrers?

If you published your app in the App Store for iOS devices, you can implement code into your application, which gives you the possibility to get data on how (potential) users approach your app with the help of Google Analytics. Click here if you want to learn how to do this!

To Put it in a Nutshell

At the end of this article, we want to give you an overview on the mobile marketing ad formats available and which product they are most suitable for.

	Mobile Website	App
Email-Marketing	✔	✔
SMS-Marketing	✔	✔
Banner	✔	✔
Videos	✔	✔
Rewarded Videos	✔	✔
Interstitials	✔	✔
Native Marketing	✔	✔
Rich Media Advertising	✔	✔
Push Notifications	✔	✔
QR-Codes	✔	✔

This table shows which mobile marketing format fits which product.

As you see, most of all mobile marketing ad formats can be used to promote products, services and apps.

Find the Best User Acquisition Strategy for Your Mobile App!

April 6, 2017/in Mobile User Acquisition/by Alina Dettmer

You’ve finally finished the development of your app and now want to introduce it to the mobile world? The deciding factor for being successful is acquiring and building a wide user base. Not just any users! It is important to attract the right users, who want to engage with your app for a long time! In this article, we will explain the most important aspects and effective methods for your user acquisition strategy.

Users try new apps an average of 4.5 times before stopping © ayeT-Studios

Before Starting Your User Acquisition

Don’t dive into the user acquisition straightaway, even if you already have a rough strategy in mind! First, you have to be certain of a few remaining questions:

Is the Development of Your App Finished?

Make sure that the development of your app is truly finished before introducing it to the market. It should be as bugless as possible to ensure an enjoyable experience for the user. If this is not the case, no user will be willing to keep your app after downloading it.

Did You Set a Concrete Plan and Goals?

You should always think about your favored achievements before implementing a strategy or even starting a campaign. Determine the channels you want to use, metrics to measure your success, your time and your needed staff. In short, specify your Key Performance Indicators (KPIs), which tell you if you are on the way of achieving your goals or not.

Did You Estimate Your User Acquisition Costs?

Before planning your definite user acquisition strategy, you should calculate your budget! A very important metric are the user or customer acquisition costs (CAC), which measure how much you can spend on each user. You can determine your CAC by taking all your marketing expenses divided by the acquired users within a specific period of time. Even if you haven’t acquired any users yet, you should always keep estimated numbers in mind. The CAC are a crucial factor for the success and profit of your business!

Take a look at this article to learn more about this topic.

What Is the First Step of Your User Acquisition Strategy?

You should start off your user acquisition strategy by identifying the right users for your app. Undoubtedly, it is important to understand your (potential) users before investing money in a big marketing campaign. The risk is targeting the wrong users, which makes even the best user acquisition strategy futile. Therefore, we recommend publishing your app in only one or two countries first, which is called a soft launch. This allows you to analyze specific user segments, who are interested in downloading and keeping your app. While doing so, you should also think about the following questions:

What are your (potential) users generally interested in?
What are they searching for on google or in the app stores?
Which other apps do they use?
On which social media channels can you find them?
What are they talking about?
Who are they following?
At what times are they engaging?
How long will they keep your app on their smartphone? You can gauge this by using tracking providers to analyze session duration and retention rate.
What about demographics like age, gender, marital status, education, etc.?

Consider the answer to each question while planning your mobile user acquisition strategy! Thereby, you are able to target a specific audience rather than too many users, who may not be interested in engaging with your app.

Which Tools Can You Use for Your Mobile User Acquisition Strategy?

After clarifying the remaining questions and determining the right user group for your app, you can finally start planning a definite user acquisition strategy. Of course, there are many different ways of approaching your users, though not all of them are appropriate for you. You have to choose the most suitable method according the kind of app you’re publishing and your targeted audience. Keep in mind that even the slightest changes in either of these factors should result in an adjusted strategy.

E-Mail marketing is the most popular tactic for both user acquisition and retention © ayeT-Studios

We collected quite a few organic, as well as paid tools, which we are going to explain in greater detail below.

Organic Methods

You can use many different channels for your mobile user acquisition strategy that are absolutely free of charge. They work well for generating new and interested users for your app, but often you have to invest time to be successful.

Activate Your Own Social Network

A very simple way of building a solid user base, even before you published your app, is talking to your own social circle. Tell everyone you know about your product and which feature makes it special and unique. Whether it’s your family, friends, colleagues, business partners or fellow students, each of them could start word-of-mouth publicity for your app. This is a great way of attracting potential new users since they will certainly trust the recommendation of someone they know well.

Focus on Ratings and Reviews

Carefully read all existing reviews! They indicate exactly how satisfied your users are with your app and sometimes even provide ideas for possible changes and improvements.

Additionally, think about submitting your app to app discovery platforms and review sites. These present, review and promote new and unknown apps. If they like your app, this presents a good chance of acquiring new users since many users have trust in the opinion of these sites.

Use ASO to Optimize Your App Store Appearance

Just like with most situations in life, the first impression is crucial. Users decide whether or not they want to download an app mostly due to its appearance in the app store. If your app visually attracts them and informs them of all features and benefits, they will most likely install and actually engage with it.

Click here to learn everything about optimizing your app store appearance to convince users of downloading your app.

Create A Website for Your App

Another important factor of ASO is creating a landing page for your app. This is a good way of providing important information about your app and showing its main features. The website should be well designed and include links to your app store page. Thus, the users won’t have any difficulties getting to your app. Additionally, include contact information of your support team in case active or potential users have any problems or questions.

Tweak Your E-Mail Marketing

A mailing list is a good opportunity to keep your users updated at all times. With services like MailChimp, you can compile a list containing your important contacts and send a mail to each of them with just one click.

Make sure your content is interesting and offers relevant information for the users since you don’t want to end up in their spam folders. Furthermore, don’t forget to include your contact information and links to your website, app store page and social media channels.

Use Social Media Channels for More Virality

You can create an account on the social media channels that you and most importantly your users prefer, for example Facebook, Twitter and/or YouTube. By doing so, you can reach out to your users and communicate with them on a personal level. Therefore, you have additional possibilities of reacting to feedback or occurring questions and spreading news or updates much faster.

Build Your Own Brand

Next to your social media presence, you should also focus on building your own brand. Within this endeavour, it is important to define key features like the overarching design, visual language and message of your brand and the experience that you want the users to associate it with. You should match these key features to your app since users will be more inclined to recognize it. This highly improves the chances of them downloading your app, as well.

Furthermore, think about creating a blog to inform your users about any news and updates of your app. Again, use the features you defined for your brand.

Talk to the Press

If you want to communicate with the press, make sure to prepare yourself! Have a complete media kit or press release including all relevant information about your app at your hands. Invest some effort into an appealing design to convince the journalist to write about your app. The chances of people reading an article and downloading your app will rise.

Talking to the press guarantees your app a lot of attention and far reach. This method enriches your user acquisition strategy since many people have trust in the press as long as it is credible.

Which advertising channels do users trust the most? © ayeT-Studios

Paid Methods

With the right budget, there are paid methods for your user acquisition strategy as well. Below, we will show you some of the most effective ones available.

Install Campaigns Based on CPI

With install campaigns, you are able to boost your number of app installs and as a result your ranking in the app stores as well. This leads to higher visibility of your app and consequently to more organic traffic and installs.

The pricing model for install campaigns is CPI, which means you pay for every completed install of your app. There are two different options you can choose from: incent or non-incent campaigns. The former describes install campaigns where users are offered a reward for downloading the app. Here, the results are immediate and your ranking improves significantly. However, there is no guarantee for long-term engagement of your users, which means the effects may be rather short lived.

In comparison, non-incent install campaigns don’t reward a user for downloading your app. They decide to engage with your app on their own accord. Since they are truly interested in your app, the chance of them keeping it for longer is very high. Though, non-incent campaigns are usually more expensive than incent campaigns and it often takes more time before you see any results.

Another, special, type of install campaign is called High Retention Installs – a unique offer by ayeT-Studios. The main idea is only to reward the user if he or she kept your app for at least three days. Like that, your retention rate increases distinctly.

Read a much more detailed article about this topic here.

Use Social Media Ads

Although social media platforms are mostly free of charge, you can also invest some of your budget in social media ads. Since Facebook is the biggest social network, with 1.86 billion monthly active users in 2016, it’s certainly one of the best choices in terms of reach. It’s still wise to consider other platforms such as Twitter, Instagram or YouTube as well.

Communicate with Influencers

Another way of using social media as a paid method for your user acquisition strategy is influencer marketing. Besides the press, as we mentioned earlier, you can also get in contact with so-called influencers. These are people who have large follower bases on different social networks like bloggers, YouTubers or other social media stars. Getting them to recommend your app offers you many potential users since most of these followers trust their idol’s opinion.

Cooperate with Professional Ad Networks

Ad Networks like ayeT-Studios that are specialized in mobile marketing provide a great platform for advertisers to implement user acquisition campaigns. Additionally, you can choose from different pricing models and combine them with your favored ad format. Which one you pick is entirely up to you, your target audience and what kind of app you offer.

Different Media Types for Your User Acquisition Strategy

As there are many different approaches, there are various media for your user acquisition strategy, as well. Below, we explain the most common media types and their main functions in greater detail. Furthermore, we compiled an overview of these types plus some examples for your better understanding. In general, a balanced mix of these media types works very well. However, you have to decide on the exact ad formats that best suit your marketing needs and goals.

Paid Media

This media type includes all kind of paid advertising campaigns during the marketing process. They can appear in the form of various ad formats on any media like tv, print, internet, radio, the cinema as well as out-of-home media (e.g. on billboards). Here, another advertising method is native advertising. The advertiser can decide through which format and content he wants to deliver his message. The downside: This kind of advertising requires quite a large budget.

Earned Media

Earned media describes various content that has been created outside of the company and wasn’t paid for or assigned in any way. These are primarily social media posts (which are organic and might go viral) and contributions or recommendations on review sites. If you practice authentic PR and sufficient CRM, independent media will draw attention to your company.

Owned Media

The term ‘owned media’ includes all content that has been created and published by the company itself. These can be websites, customer magazines, (corporate) blogs and various social media channels and accounts. Oftentimes, this kind of media is referred to as Corporate Publishing, which refers to the communication between the company and its own media channels. Companies check these contents permanently and mark them as company content for customers. However, this could lead to mistrust due to potential biases of the author/publisher.

Paid Media	Earned Media	Owned Media
Advertising	Public Relations	Social Media Posts
Sponsored Content	(Non-paid) User Reviews	Content Marketing Marketing Collateral
Influencer Marketing	Word-of-Mouth Advertising	Website App Store Page

A Few Last Tips

To make sure your user acquisition strategy is as successful as possible, we wish to give you a bit of advice. Use these tips during your actual user acquisition campaign!

Don’t Reveal Too Much Too Fast!

Make sure not to reveal everything at once! Announce updates and upcoming features one at a time to keep users curious and interested in what’s new to come.

Constantly Measure Your Success!

For every marketing campaign, it is crucial to know which channels provide the best results. Naturally, user acquisition is a process that changes permanently. Therefore, you have to measure its efficiency and success constantly and, if necessary, change your approach. Otherwise, you won’t be able to detect whether your current user acquisition strategy is worthwhile or pointless.

Continue Testing!

Again, the aim is to know which channels work best for you and your app. Therefore, you have to change your strategy and your methods regularly in order to compare the results and identify the most effective ones.

And Finally: Retain Your Acquired Users!

One of the most important factors for being successful with an app is user retention. Therefore, generating users should not be the only part of your user acquisition strategy. Keep in mind to update your app and reach out to your users regularly in order to retain them as well! For instance, if you chose an incent approach for your user acquisition, make sure to constantly reward your active users.

Why User Acquisition Costs Are an Important Metric For Your Business

April 6, 2017/in Mobile User Acquisition/by Alina Dettmer

In every branch of industry, it is important to establish a wide customer base in order to be successful. To get there, you have to invest all your time, effort and sufficient budget into optimizing your user acquisition. In this article, we will mainly focus on the financial side and explain how to calculate your user acquisition costs. This is a necessary step to measure the efficiency and profit of your business.

The essential, and probably most difficult, part of user acquisition is reaching out to the right group of users! Basically, you have to attract interested and loyal users, who want to engage with your product, more precisely your app, for a long time. How do you accomplish that and does it affect your user acquisition costs?

What Are User Acquisition Costs Exactly?

Before we can dig deeper into any calculations, we want to give you a short definition of customer, and more specifically user acquisition costs in the case of mobile apps.

Customer acquisition costs (CAC) portray the estimated costs for every new user you acquire for your business. The CAC is an important metric while figuring out if your marketing and user acquisition strategies are effective.

In detail, you can explore the value and worth of every single user to your company. By comparing your user acquisition costs to their lifetime value (CLTV), you can calculate how much you can spend on a potential customer and finally your return on investment (ROI). If your CAC is higher than your CLTV or your ROI, it is time to fix your acquisition strategy immediately!

Click here to learn more about finding the best user acquisition strategy.

How You Can Calculate Your User Acquisition Costs

To calculate your user acquisition costs, you have to determine all the resources necessary to acquire one single new customer first. These resources portray every effort you have to invest, from reaching potential users to converting them into active customers.

Cost Per Install

When calculating your user acquisition costs for mobile apps, this metric correlates with the general understanding of CAC. Since CPI, or cost per install, portrays the costs for ads that trigger installs of your app, this can be compared to the traditional costs of customer acquisition in e-commerce.

However, how much you actually have to pay depends on what kind of ad format you use. Thus, you probably have to invest much more in non-incent banner ads than in incent campaigns through an offerwall.

CAC

In general, consider the following expenses of your own marketing department when calculating your customer acquisition costs:

Employee costs & salaries
Paid advertising & agency fees
Your own advertising campaigns
Digital marketing: maintenance of your website and various social media channels
Direct marketing: e.g. mail or email campaigns
Print media & company publications
CRM & gifts or discounts for your customers
Software licenses
Events & sponsorships

Try to figure out the amount of each matter of expense as precisely as possible! Your entire calculation will be much more precise.

The general formula for calculating your customer acquisition costs can be applied to any industry. Here, you have to sum up all marketing expenses and divide it by the number of users you managed to acquire in a specific period of time.

However, you aren’t finished just yet! Now, you have to define the lifetime value (LTV) of your users, or in other words your ability to monetize a customer.

Customer Lifetime Value

The customer lifetime value predicts the amount of financial profit and revenue your business generates through any acquired customer. In general, it portrays the worth of your relationship with this customer and refers to his entire lifetime at your company.

Furthermore, the more satisfied users are with your service, the higher their lifetime value. Therefore, you should focus your efforts on providing a great experience for your customers. Depending on what your products and services are all about, you should set relevant Key Performance Indicators (KPIs).

For instance, if you have an e-commerce business, you should concentrate on optimizing and accelerating the buying process. Don’t prolong these sessions needlessly since users might abort the purchase – which results in losing a potential customer.

In other fields, like app development, your goal should be to create a flawless product to attract and engage users for longer. After all, you’ll want to maximize retention, session duration and total usage for every user acquired.

Overall, the customer lifetime value depends on these three factors:

Monetization – The amount a certain customer contributes to the revenue of your business.
Retention – How often a customer returns to your business.
Virality – The value of additional users a customer refers to your services and products.

Now, before you can calculate your CLTV, there are a few more metrics you have to gather first.

Average Revenue Per User

The ARPU reflects the average revenue a certain active customer contributes to your company in a specific period. You can use the following formula:

Churn Rate

The churn rate represents the number of users who no longer engage with your app. Therefore, it indicates the satisfaction of your users with your company. Use this formula to calculate your churn rate:

With these additional calculations, you are finally able to determine your customer lifetime value:

As a last step, you have to contrast your customer acquisition costs to your customer lifetime value. If the former is higher than your LTV, then your business is not beneficial. In fact, it indicates that you are investing too much in acquiring users without the ability to make any profit in return. In the end, this might lead you and your company to failure.

Therefore, keep in mind to never spend more than you’re able to gain with your active users!

Return On Investment

The return on investment, or ROI, helps you measure your profit or loss relative to your budget spend. Hence, you can figure out how beneficial your business really is and compare the efficiency of different investments. Don’t forget to include all further costs of your business as well – like rent, HR, infrastructure, etc!

Like CLTV, your return on investment should always be higher than your customer acquisition costs!

Conversion Rate

The conversion rate shows the percentage of users who take a desired action and therefore convert into active customers. These actions can vary from business to business, depending on which products and services are offered. Typical actions are downloading content, signing up for a newsletter, joining a community, getting in contact with a website owner or clicking on display ads.

Additionally, the conversion rate portrays the value of each individual user to your company.

When calculating your user acquisition costs for apps, there are two types of conversions you should mainly have an eye on:

Install / Active Users: Here, you can calculate how many users installed your app based on your mobile user acquisition campaign and converted into active customers by taking a predefined action.
Active Users / User Generated Revenue: This helps you calculate the amount of users that actively engage with your app and take actions to generate revenue, for example through in-app-purchases.

How to Reduce Your User Acquisition Costs

After you formed an overall perspective of what you’re spending on acquiring new users, here are some tips to reduce your user acquisition costs. As we learned by now, this is necessary if you want to make a profit with your business.

1. Raise Your Expectations!

Don’t make the mistake of setting your expected user acquisition costs too low! When calculating before you finished the development stage of your company, you have to estimate the result. At this point, you should consider a few challenges that might arise:

Exactly know your potentially effective acquisition channels!
Expect time delays that might affect your costs!
Adjust your numbers according to real-life experiences!

Because of these possible challenges, you should double, or even triple, your calculated costs to prevent any misestimating.

2. Know Who You Should Be Targeting!

To avoid wasting your resources for ineffective marketing channels, define a target audience by creating a specific persona. Then, adapt all your efforts and investments according to the characteristics and interests of this persona.

3. Leverage Your USP!

Give users a good reason to buy your product! The USP, or unique selling point, defines a specific feature of your product that makes it stand out in comparison to your competition.

Emphasize it for your potential customers and focus most of your branding strategy on this information. If you don’t have a USP, users won’t see any advantage in buying your product of all things.

4. Improve Your Content Marketing!

By implementing so-called long-tail keywords into your website content, you automatically improve the chance of generating organic traffic. Since users generally search for longer and more specific keywords if they want to purchase something, they are more likely to find your content!

5. Don’t Just Acquire – Retarget As Well!

Most of the time, it’s much more expensive to acquire a new customer than to keep an existing one. If you haven’t establish a customer base just yet, your answer is retargeting. Basically, all you have to do is get in contact and communicate with your potential customers. This is someone who visited your website but didn’t make a purchase.

6. And Last but not Least: Testing!

All these tips won’t have any lasting effect if you don’t know which changes are actually effective. You have to test any content, like your landing pages, home pages or marketing funnels, after modifying them. Even more ideas of possible improvements will arise and you will realize which of your changes work best.

Therefore, doing split or A/B tests regularly is a qualified method to lower your user acquisition costs.

Conclusion

To answer the question we asked at the beginning: Targeting the right users does indeed affect your user acquisition costs! For one, acquiring active, long-term customers plays a major role in the success of your business regarding CLTV. Furthermore, by identifying your most rewarding target audience straightaway, you can even reduce your CAC in the long run.

That’s why you have to calculate and observe your user acquisition costs constantly in order to optimize your strategy.