The 6 Biggest Pitfalls in User Acquisition

The 6 Biggest Pitfalls in User Acquisition
October 25, 2018 Simon Whittick

1. Not cohorting your ROAS

In essence, user acquisition is about the cost of acquiring a customer and the lifetime value of revenue returns, otherwise known as ROAS. When measuring ROAS, it’s important to do so through a cohort window to ensure you’re comparing the performance apples for apples. This allows a clear view before making a decision. The frequency of continual optimisations made to campaigns and improvements to the apps themselves can mean the effects of these changes go unnoticed. This interference needs to be removed to reveal a clear picture of what’s worth investing more in. Otherwise you run the risk of optimising to a source that looks like it has a high ROAS but find it doesn’t’ correlate to the revenue from that cohorted cost. 

2. Not setting a consistent attribution window

All the data in the world won’t help you grow your mobile app business unless you know how to interpret and optimise it. Understanding the user journey, and how long it takes for certain actions to take place is vital for optimising your campaigns accordingly. The time it takes for a user to make a purchase varies massively between verticals. Gaming apps have a far higher conversion rate – whereas for other verticals – it can take users longer to commit to a purchase. What’s important is finding a consistent way to correlate early user behaviour with long-term metrics.

Let’s take, for example, restaurant booking app Velocity. We began by optimising towards cohorts, which showed the gap between a user downloading the app and making a first time booking was, on average, 30 days. This made it an impossible event to optimise towards. We therefore identified a metric within 3 days that correlated with bookings made after 30 days. A total of 60 behaviours were taken into account to produce a predictive conversion rate. Optimising to predictive metrics meant enabled Velocity to reduce CPAs by 72% in 3 months.

3. Not monitoring the frequency that your ads were shown to the same user

We’ve all been there – releasing a sigh of frustration after seeing the same ad for the umpteenth time. This is known as ad fatigue. Put simply, it’s the condition that results after consumers become tired from seeing the same ads. The danger is, users may grow resentful not only of the ad, but of the company behind that ad. With it’s measurable, negative impact on campaign performance, ad fatigue can’t be ignored. It may sound obvious, but make sure you are monitoring the average frequency that people saw your campaign’s ads. You can also avoid fatigue by varying your ad formats, and frequently optimising them according to the results obtained by viewers.

4. Ignoring LTV

Customer LTV is one of the most powerful metrics app marketers can implement. In its simplest form, LTV is the projected revenue that a customer will generate during their lifetime. It tells you how much a new user is worth and how much you ought to be paying to acquire that user. LTV, therefore, should drive your app marketing budget. If done well, LTV is a way of maintaining a sustainable stream of revenue. When executed poorly, it can lead to higher CPAs, increasing budgets for stagnant growth and an increasing churn rate.

5. Not measuring conversion rate from impression

The conversion rate from impressions vs your bid ultimately dictates your CPM. And when it comes to volume CPM is king. To accelerate reach cost-effectively, brands need to recognise this and optimise for it. To understand how well your creative is doing, always look at conversion rate from impression to see how well your audience is engaging with your ad.  Creative testing plays a big part in this, and you’ll need to A/B test to get the most out of it.

6. Not diversifying your mobile media mix

As you scale up your app, it becomes more important to diversify your mobile media mix. There are so many ad networks and platforms for user acquisition in the mobile landscape. If you put all your eggs in one basket, you are missing out on potential opportunities. Diversifying your media mix helps you to keep your CPI down while allowing you to test various sources. Running campaigns with only one network can lead to saturating that network with the same ads, and subsequently, the conversion rate will gradually decline. What’s more, varying your acquisition channels is also a good way to reach more users. However, juggling multiple campaigns across various networks can cause headaches when it comes to building spend reports. Luckily, there’s an App(sumer) for that…