Identify Interactions That Can Make Your App Valuable
How can I find my app’s most valuable interactions?
What is Customer Lifetime Value?
How can I use an App campaign from Google Ads to drive my users to complete certain interactions?
If you’re marketing a mobile app, it’s nice if lots of people see ads for it. But it’s pretty important that the people who see the ads actually install and use your product.
That’s why some marketers use App campaigns from Google Ads. App campaigns analyze the data individuals choose to share while using their phones – video views, website visits, searches, etc. – to find users who are likely to interact with an app.
This process is known as “machine learning.” Once the App campaign has used it to identify people who are likely to interact with your app, it can serve them ads that hopefully drive those interactions.
But there are lots of ways to interact with apps.
So what interactions can App campaigns help promote?
Getting the most out of an App campaign means deciding which in-app interactions are most valuable to your business.
Some apps, for example, bring in money by charging for the initial download or for in-app purchases. Other apps sell ads, help get customers to visit retail stores, or just improve a user’s perception of your brand.
Before you set up your App campaign, figure out which app-related interactions create the most value. Think of these as your primary goals. They might include selling a physical product or having people pay to subscribe to your content.
Identify secondary goals, too. These engage users and drive them to your primary goals. Getting people to subscribe to a newsletter or to look at a number of products are good secondary goals, since they can lead to future sales.
Once you’ve identified the interactions you care about most, you can set up App campaigns to find users who will complete them.
REMEMBER
App campaigns work by finding new users who act like people who already interact with your app. So, the interactions you want to promote need to happen often – at least 10 different users need to perform the action a day. And the more data, the better.
Identifying your goals can also help you understand how much it costs to reach them. It’s crucial information for your App campaign and your bottom line.
When you create an App campaign, you need to state the campaign’s Cost Per Acquisition (CPA). This is the amount you’re willing to spend to get users to complete an interaction.
The simplest way to choose an interaction’s CPA is to look at how much revenue the interaction generates (AKA how much money it brings in). As long as the CPA is less than what you make from the interaction, you can make a profit.
For example, let’s imagine an app called HighUp, which deals with all things interstellar. The app offers news and video content on space exploration, as well as an in-app store that sells space-related apparel.
When users visit the content section, it usually leads to $2 in revenue from ad sales. So if HighUp sets an App campaign to promote visits to their content section, a CPA of up to $2 could help generate business and still keep them in the black.
Finding users who interact with your app once can help with short-term profits. But users who keep coming back can create more value in the long run.
So how can you find these repeat users? One way is to set up your App campaign using a CPA based on Customer Lifetime Value (CLV). This is the total value that average customers generate over the course of using your app.
In CLV, Lifetime refers to the amount of time average users regularly engage with an app. Value is how often an average user performs an interaction in their lifetime multiplied by the average revenue each interaction generates.
TIP
Wondering how to find the info you need to calculate CLV? When you set up an App campaign, you need to use software like Firebase to measure your app’s performance data. That same software can also help you figure out the Lifetime of users and the Value of their interactions.
So how can you put this to work for you? Well, let’s take another look at HighUp. They want to create an App campaign to promote in-app purchases (IAPs).
HighUp’s average users make in-app purchases for 2 years after installing the app. So the Lifetime is 2 years. If users average 3 IAPs over these 2 years, and each leads to an average $60 in revenue, the Lifetime Value from IAPs is $180.
That means HighUp can set up a campaign for IAPs with a CPA of up to $180 and still hope to make a profit. And if they can find enough users who spend above average, they’ve increased their chance to do really well in the long-run.
DO THIS NOW
Figuring out the best App campaign to grow your business means knowing a lot of information. Let’s check out what info you already have and what you still need to find out.
If you’re participating in the course, go to the next section to access your self assessment.
KEY TAKEAWAYS
Identifying the most valuable interactions within your app lets you prioritize which App campaigns to launch and how much to spend on each one.
Setting your App campaign's Cost Per Acquisition lower than your Customer Lifetime Value can help you create profit from your interactions.
You can use App campaigns to Target particularly high-spending users of your app by focusing on what create the largest Return on Ad Spend.