On-device channels are no longer all about preloads. Today, telcos represent another performance marketing channel with transparent reporting and deeper insights. To get the full picture behind the performance of your on-device campaigns, it’s critical to prioritize long-term KPIs. It’s the only way the stickiness of users acquired through these channels really shine. Why?
On-device campaigns reach users when they’re setting up their new devices and looking to download apps they’ll use throughout the device lifetime, not necessarily right away. Think about it - if you download a booking app from an ad during device setup, are you planning to book a vacation immediately or later down the road?
This means attribution is a waiting game for on-device campaigns, with day 30 as the turning point. In fact, if a user engages with your app 30 days down the line, they’re more likely to stay active for a long period of time. Simply put, LTV is high for on-device campaigns. This means you want to be looking at KPIs that allow you to measure and optimize the value of the users you attract far down the road.
ROAS is king when it comes to measuring the long-term value of your users. To get the clearest idea of your ROAS and how to optimize it, there are a few things to keep in mind. First, ROAS should be measured on D30/60/90 not D1/3/7. This is because, with on-device channels, users are likely to open an app within the first 30 days or longer - when a user downloads an app during device setup, they do so expecting to open it in the future, not right away.
You should also pay attention to how it’s being measured. ROAS is calculated by dividing the amount of revenue a campaign generates by the amount it costs to run it. In the context of on-device campaigns, that revenue comes from in-app purchases, subscriptions, or ad monetization.
When measuring the effectiveness of your on-device campaigns, it’s important to calculate ROAS using your on-device ad revenue rather than average ad revenue, which will be lower. That’s because ad revenue is high for users acquired through on-device campaigns - on-device channels use unique data points and deep algorithms to ensure the right bid for each individual user. To get the clearest picture of where you stand in relation to your ROAS goals, you should integrate ad revenue with your on-device platform.
Once calculated, ROAS gives a clear monetary view of your campaigns, so it’s clear how much you spent vs brought in. This monetary value is important because it tells you if your on-device campaigns are reaching valuable users. Looking at ROAS by placements, you get insight into which placements are doing it best. With the knowledge of how to maximize ROAS, you’ll maximize the long term value and engagement of your users, too.
Comparing LTV to spend will help you determine whether or not your users are spending enough to cover your spend and ultimately turn a profit. You can even pinpoint areas of your strategy that are effective, and those that may need adjustment.
There are a few ways to measure cost effectiveness. Here are the most common two, especially for on-device campaigns.
Cost per action (CPA)
If it’s quality you’re looking for, first, run a CPA campaign to confirm that you’re looking in the right places for users who will engage with your app. To count as a conversion, users must see the ad, install the app, and complete the action you preset. You’ll only pay for the users who reach a chosen point in the app experience after installation. A CPA that is higher than LTV is a clear indicator that your campaigns are focused on less relevant channels or touchpoints, while a CPA that is lower than your LTV confirms that you are attracting high quality users.
In the context of on-device campaigns, this is key because it means you won't pay immediately for a user who may not engage for a month or so. The pricing model also integrates in-app revenue, which is useful for apps that rely more on IAPs than ads.
Cost per retained user (CPRU)
It’s also worthwhile to keep track of how much you’re paying for the user that’s still there on day 30. CPRU takes into account conversions and retention rate - if your budget is $10k, you have 1000 conversions and a day 1 retention rate of 20%, you come away with 200 converted users at a $50 per user acquisition cost. If you can increase retention, you end up with higher quality users at a lower CPRU.
Measuring CPRU, retention becomes a success metric for your UA campaigns and can help you determine whether you have enough engaged users to cover spend.
On day 30 and beyond, these KPIs can help you optimize your on-device campaigns to reach the most engaged users with high LTV.