It is dangerous to generalize, since every mobile app business has unique challenges and very specific problems they need to solve to move forward. However, there are recurring topics that have become more central in every discussion when it comes to user acquisition and monetization alignment.
Keeping things as they are
Ignoring the issue of alignment may be caused by loss aversion bias. Loss aversion is a cognitive bias that makes us focus more on avoiding new opportunities as they are associated with possible financial loss, thus overlooking ideas that could potentially bolster profits. When data is scattered and user acquisition loosely takes into account monetization data, publishers actually miss out on bigger profits. When you reassess your user acquisition strategy and decide to scrupulously target the most valuable users and engage them in a way that encourages them to spend more time and money in your app, you make a strong move to strengthen emotional ties with your users and increase profits.
Practice shows that data-informed decisions usually translate into more revenue. Knowing your users and identifying the ad whales — those 20% of users that bring 80% of revenue — is crucial to building a monetization strategy that sees the user potential to the fullest.
In order to be a viable business, publishers should realistically look at specific users they need to target and keep in mind that the user’s value must exceed the cost of acquiring that user. Hence, making the most out of your analytics and building your UA strategy with a focus on ad whales should pay off.
User acquisition and monetization teams out of sync
Do your user acquisition and monetization teams work closely together to improve performance? In many instances these teams are heavily focused on achieving separate team KPIs instead of aligning and moving towards common goals. The key to successful alignment is for these teams to communicate on a regular basis and make decisions based on analyzing ROAS and setting up common goals.
One way in which misalignment of monetization and UA directly affects your revenue is user targeting weakened by disparaged data. By enriching your UA campaigns with ad revenue insights on the user and impression level within your monetization, you can refocus your UA campaigns to acquire more users that generate higher ROI and revenue, and spend less on ineffective campaigns.
Focusing on incomplete metrics
There is a multitude of metrics that publishers treat as equally important. And even though it is reasonable to take into account the full funnel of metrics to make an end-of-the-year report or a comprehensive analysis of , there are metrics that are much more important to track on a daily basis. Ad LTV and eCPM decay are the ones that are often overshadowed by regular LTV, Retention Rate and APRU metrics.
Ad LTV and eCPM decay are the metrics that can be more effectively tracked nowadays. Both are dealing with revenue attribution and should be at the core elements of UA and monetization strategies.
Accurate Ad LTV prediction is a huge step towards understanding exactly how much money each traffic source brings and subsequently map the most effective marketing channels with high quality users. Ad LTV prediction approach demonstrates how much money users spend in the app and for how long they are expected to stay there. By including ad revenue in an app’s overall LTV calculation, mobile developers can get a more comprehensive understanding of where their revenue is coming from, what users to target and what campaigns to run for more optimal ad revenue. With that information at your disposal you can create a solid base for monetization and user acquisition strategies. Constantly monitoring your LTV allows you to notice and address negative changes in revenue before it creates turbulence for your business and becomes a real problem to deal with.
eCPM decay is a useful metric that focuses on price drop dynamics for each impression (the first impression price is usually the highest, the rest falls behind). With eCPM decay statistics at your disposal, you can determine how to limit the number of impressions for it to be the most effective for a particular device and not lose revenue by engaging users who seem to slip away.
Even though each mobile business has unique challenges, user acquisition and monetization misalignment seems to be a common problem for a lot of companies. Fear of going into more serious work with data and trying a new approach may prevent app developers from aligning user acquisition and monetization.
Focusing on ad LTV prediction, eCPM decay and ad whales for developing both monetization and user acquisition strategies can be a powerful move towards meeting ROAS goals. The UA and monetization teams need to talk to each other more frequently and, instead of competing with each other, discuss common goals for optimization and increase of revenue.
That is why we offer an actionable intelligence solution called DataCore that can align your user acquisition and monetization data for you. Yes, the obstacles exist but technology does not need to be one of them.
Stay tuned for our next article on how you can apply DataCore to your mobile app business or reach out to our team here to learn more.
While you’re here, check out our Guide to Scaling Mobile Apps in 2019.