Global ad spend will rise to $873B by 2024, up from $634B in 2019, according to Zenith. With all eyes on marketing to help brands rebound after a challenging year, it’s important to start reevaluating your mobile user acquisition strategy to ensure you're taking full advantage of a larger budget.
The place to start? Expanding past social and search into new user acquisition channels. In fact, 89% of customers are retained by companies with multichannel engagement strategies according to invesp.
On-device advertising, which allows you to offer native app recommendations directly on OEMs and carriers, is a largely untapped market, making it a valuable channel to spend your budget.
Let’s look at why and how to work with this channel.
Why you should be leveraging telco marketing
On-device advertising is a powerful way to drive incremental growth, get in front of more eyes, and balance quality with scale.
Drive incremental growth for your brands
On-device advertising is a great way to reach users who are unreachable through your traditional channels - in other words, it’s a great way to drive incremental growth. For agencies, ”the ability to identify and optimize towards incremental growth means they can refine the way they allocate budget across their media partners for maximum impact” according to Dor Birnboim, VP of strategic partnerships at ironSource Aura, in a piece for AdExchanger.
With a larger budget, most brands turn to traditional UA channels, first, to get in front of low hanging fruit. That said, with those budgets maxed out and consumers, in reality, only spending 34% of their time in traditional channels according to Criteo, on-device advertising is a unique and powerful way to drive incremental growth from a new set of quality users.
Along with a larger budget, you have unparalleled expertise buying across a number of different channels, ranging from search, social, the open web, etc. This means you’re well prepared to get savvy with your on-device marketing strategy, increasing the likelihood you can continue to expand on your incrementality efforts.
But why is on-device advertising, in particular, the best channel to reach a new audience?
Get in front of more eyes
It’s becoming more common for users to unlock their phones for no predetermined reason, according to App Developer Magazine, which means advertising your app directly on devices is a lucrative way to engage and acquire users when they aren’t heading to a specific app or media source.
This is because advertising on OEMs and carriers, you can offer native app install recommendations at touchpoints users are primed to engage. For example, when a user opens their phone just because, wanting to interact with their devices but not sure how, you can send a notification for them to install your app and redeem a special offer. With nothing else on their mind, users are likely to install and engage.
Even more so, with immense advancements and innovation coming from the mobile industry, getting started with a campaign on telco channels and optimizing it is only getting easier, which means you want to get started today to reach those users before the competition.
So, how does on-device advertising fit into your overall user acquisition strategy?
Balance your overall Cost Per Install
If you’re already using social and search, on-device advertising is a great way to complement your UA, all while balancing the quality and scale of your media mix. After all, while it’s important to look at each channel as a unique unit, it’s also vital to analyze your media mix as a whole. Specifically, you want to ensure your media mix has a balance between high and low CPIs, and on-device advertising balances quality and scale in one.
Users who search for a specific term can generate very cost efficient CPIs. That said, scale can pose an issue for these channels. So, search channels have low CPIs and low scale, but high intent. Meanwhile, with social campaigns, the intent is not as high because a user is being recommended a solution they may not need at that moment, however due to a larger, more quality audience, the CPI and scale for social channels is high, balancing your overall CPI.
On-device advertising offers cost efficient CPIs while introducing your app to a vast audience - low CPIs, high scale - making it a great channel to add to your UA mix. Users who install apps while setting up their new devices or during a device update experience tend to retain over the long term. That said, these channels won’t break the bank and you don’t have to go all in at once. As a performance marketing channel, you can leverage transparent reporting and deep data insights, which means you can test out telco marketing first, instead of paying a large, upfront sum and then hoping for the best.
How to master your on-device advertising strategy
Now that we understand why on-device is an important channel to add to the mix, here are some key things you should consider starting your first campaign.
Take into account post-install events after D30
On-device advertising reaches users when they’re primed to download new apps, not necessarily when they’re prepared to immediately engage. Due to the nature of this, you’ll have to adjust how you think about your attribution measurement and your users’ perceived value.
Let’s say you’re running a social campaign with a health and fitness influencer to encourage users to sign up for your subscription run tracking program. With a traditional campaign such as this one, you’ll often set a cost-per-event goal for events early on in the funnel, such as registration, install, first purchase, etc. After all, the user should register for the tracking program immediately after install considering the nature of the campaign. While, in theory, this is a surefire way to maintain the quality of your users on most channels, on-device campaigns require you to look deeper into the funnel to understand how much you’re able to spend on user acquisition. Why?
Users on traditional channels see an ad, download the app, and engage right away. Following first engagement, however, only a small percentage may remain using the app as their intent lessens. On the other hand, the LTV curve for telco UA campaigns looks like an “S,” continuing to increase and achieving a high peak. This is because users download most of the apps that they will rely on during the lifetime of the device within the first 30 days of using the device. Even more so, users that engage later on in the funnel, such as D30, will continue to engage with your app more frequently and are likely to be loyal users.
For example, Aura set a KPI of $45 CPR (cost per new registration) for a video app’s campaign. Looking at the performance of a user at D7, the brand didn’t reach its CPR goal. Looking at performance at D30, they exceeded CPR goals because users had time to return to the app and register. Even more so, this user is likely to engage with the app in other ways following registration, increasing their overall LTV.
You can optimize your performance with native recommendations by analyzing your CPE goals to ensure you take into account user engagement on and after D30. This in mind, it’s also important to understand where on-device advertising fits into your overall media mix using incrementality testing.
Run proper incrementality tests
Incrementality measurement allows you to compare the impact of your ads on each channel against control groups, which in turn makes it possible for you to refine how you allocate your budget across your media mix. But how can you ensure you’re testing your incremental growth properly?
Before getting started, all of your channels should be tested for baseline performance. A well-designed incrementality test that you can feel confident in should include a random control group and control group that mimics the campaign exactly, i.e. the audience must match the test campaign.
Most critically, though, incrementality tests do not work when evaluating a single channel against each other. Rather, they serve to evaluate the performance of UA channels relative to one another - it’s ideal to run incrementality tests across your entire portfolio.
Incremental performance also changes over time, and you should evaluate the incrementality of your channels regularly. For example, as a brand gets more popular, the effectiveness of certain channels can alter. As your UA strategy expands, some channels may perform better or worse.
Testing incrementality properly, you can compare on-device advertising against social and search and adjust your UA costs accordingly. It’s also crucial to remember that despite the performance of certain channels, each channel is providing users unreachable from others.
With marketing budgets increasing, it’s time to start thinking about your strategy and the channels you’re running on. On-device advertising is a powerful way to reach a new set of users, driving your incremental growth with quality users.