On average, it costs $71 to acquire an iOS app user who makes a purchase— it's safe to say, acquiring users in general is no easy feat. And when you isolate to mobile only, it's even more of a challenge. Nearly half of all marketing budget is spent on digital ads, making it the most used channel for user acquisition. And by now, we know— the Facebook and Google duopoly has long owned the acquisition space, accounting for 89% of ad revenue. As mobile marketers, we're always pushing to be more metric driven helping prove ROI, validate spend, and ultimately lower our cost to acquire a new user; however, with few channels to rely on, this can be tough. Considering for every $3 spent on online advertising, $1 ends up a victim of fraud‚Ää—‚Äämarketing spend has come under close scrutiny. Not to mention Facebook just announced in their Q4 earnings call that the average price per ad increased 43%, which has left most mobile marketers scrambling. So, when you see new purchases trickle in from unknown channels with no associated acquisition cost, it's a win— right? Not quite.
Attribution Fraud & Broken Tracking
The advent of digital marketing opened a brand new door for measuring spend and tracking ROI. All marketers are held responsible for proving ROI, yet 40% of marketers state doing so is their biggest marketing challenge. A "free" or organic customer can seem initially gratifying, but what if they're actually the result of broken attribution? Mobile introduced tracking challenges, especially for the affiliate channel— leaving up to 40% of orders missed on mobile, meaning nearly half of your orders from this channel can appear to be organic.
When you couple tracking issues with the growing problem of ad fraud— estimated to be an $8.2 Billion dollar problem— a clear issue is identified. iOs alone accounts for 61% of attempted fraud, with false attributions being one of the largest problems. In performance marketing, merchants reward publishers responsible for an install. However, using methods including click injection, fraudsters can intercept and make it appear as if they influenced the install when they in fact did not. Ultimately, credit for legitimate installs is wrongly attributed— meaning you're paying a 3rd party that had nothing to do with your newly acquired customer, and not compensating the partner that did. This can impact your bottom line in a variety of ways, including:
A Metric-Driven Marketing Force
Before we dive further into why this matters, let's take a step back; Defining your acquisition funnel and knowing your metrics are two of the most important user acquisition strategy components and are something most marketers are held accountable for. The metrics piece can be straightforward with a few to keep in mind:
However, when it comes time to dive in and evaluate efficiency, those "organic" customers (the result of broken tracking and fraud) might be throwing off your optimizations. Even worse, often times when it comes to fraud you're paying, but to the wrong referral source; further skewing your ROI metrics.
Discovering Acquisition Channel Insights
You're tracking and reporting on your key metrics, but what's the reason you're doing so? Most marketers are pushing to optimize the entire funnel regularly, but this can't be done without properly understanding your acquisition channels. Not only will it give you the whole picture, but it can help ensure you're effectively and efficiently optimizing for maximum performance. If issues like broken tracking and fraud are neglected, then your bottom line will be impacted. Properly solving for these issues on the other hand, will positively enhance your bottom line and marketing efforts overall.
Allocate Spend to the Proper Channels
If you're missing a portion of orders from performance marketing, then you will view another channel as the one that reigns supreme when evaluating your strategy. Since it appears to be working best, you'll likely continue to spend here and perhaps even increase funds. However, this is not actually the best channel for your acquisition efforts. If a marketer's goal is to prove their acquisition channels are driving incremental spend, then we need to be manicial in evaluating efficiency.
Recognize High LTV Channels
Affiliate marketing has proven to be one of the most effective channels, considering the performance-driven nature of it, you're only paying when a user takes action. Not to mention, if you opt for a solution like Button with user-optimized flows, you'll see higher conversion rates and average order values than any other channel.
Good Partnerships Pay Off
Featured placements and marketing campaigns can make all the difference in a cluttered space with dozens of merchant offerings. Developing good rapport with the channels sending you valuable users, and viewing them more as a partner than a channel, will help ensure that when there's an open marketing spot on their homepage or push notification opportunity— it goes to your brand!
You're In Good Company
The mobile rewards space, for example, has an effective strategy for acquiring new users and engaging with existing customers as it offers a performance-driven, purchase incentive model. Dozens of merchants, including Walmart, Uber, and Groupon, have done so with Ibotta, one of the fastest growing apps in the US, to unlock mobile commerce and it has paid off. With Button's accurate tracking and token-based crediting to eliminate fraud, merchants have been able to acquire new users effectively, prove incremental spend, and properly optimize their acquisition funnel. Results merchants have seen to date include:
44% of users who click on a Button continue to download the merchant's app
22% of users click a button and then complete a purchase
27% of users who complete a purchase from Button become repeat customers
For every partner in the Button Marketplace tracking will be 99.9% accurate and performance-based, meaning you'll only pay when a user actually converts and always know where that customer came from.
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