Retarget or Acquire New Mobile Users: What’s More Cost Effective this Holiday Season?

Dec 13, 2017


BEST PRACTICES SERIES

Article ImageThe consensus is in. Mobile marketing industry experts agree that not only does retargeting work, it also outperforms new users when it comes to retention, events, and, most importantly, revenue events. To discover the differences and advantages of each user group, we dove into the data across 140 mobile apps--which added up to over 500 retargeting campaigns and nearly 9,000 new user acquisition campaigns between January 1 and July 1, 2017. The number of retargeted (or reattributed) users versus new users touched by the campaigns in this data sample and time period was in the millions. 

Here’s where and how the two user groups differentiated, and how you can leverage the data:

Events Higher Among Retargeted Users

Actions performed by in-app usera--whether it’s completing a level, making a purchase, or even clicking a link--are known as an “Events.” Users from retargeting campaigns had a noticeably higher engagement (or number of events per user) than new user acquisition campaigns. This is the start of a trend you’ll see, but with events in particular, retargeted users consistently outperform their newbie counterparts.

For instance, on day one of install, events are nearly double for retargeted versus new users. This is interesting to note, as users would have already been through the app before, so it might suggest that users who are more comfortable with the in-app experience are keen to continue with a deeper experience on the first day, avoiding onboarding fatigue. By week four, there’s a significant drop-off with new users, although retargeted users still complete ten more events in a single week than new users do.

What does this mean for advertisers? You can expect to see your retargeted users re-engaging with your app at a higher level this holiday season than those newly acquired.

Anticipate More Revenue from Retargeted Users

Retargeted users also account for more revenue events in the first 30 days, and also up until about week eight, thereafter both types of users behave relatively the same. The numbers themselves are much narrower than with events--here we see a 9% difference on day one of install. However, by day seven, it’s a 49% difference, where retargeted users are still likely to trigger a revenue event. That’s a large outperformance.

So, from what we can tell, retargeted users still trigger more revenue events, ultimately generating more revenue.

LiftOff’s latest acquisition data shows that “the average cost to acquire an app user who makes an in-app purchase—like game content—is $76.40,” so prioritizing retargeting campaigns that successfully engage and drive revenue can be a method to decrease this cost of acquisition.

If retargeted users make more purchases (at a lower cost of acquisition), not only is spend saved, but lifetime value (LTV) is increased for retargeted users, making them a much more interesting prospect this quarter, if you’re not already engaging with your lapsed user base.

Of course, for users to become retargeted, they must at one point start out as new users. So, continue acquiring new users, but consider prioritizing your budget for retargeting campaigns this holiday season while costs for new users are typically higher than other times of the year.

Retention Levels Out Over Time

In general, retargeting campaigns’ cohorts have a slightly higher level of retention than that of new users. We found that on day one, retargeted users retain by 5% more than new users.

This gap fluctuates wider within the first week, and remains at a 5% difference by day seven. Beyond that, the two narrow in difference over time, with reattributed users always remaining in higher numbers for longer. Retargeting campaigns’ cohorts have a slightly higher level of retention rate in the first 6-8 weeks too, but then they become the same.

Retargeting Works!

If there’s one main takeaway, it’s that retargeting works in keeping users around, keeping them engaged, and also (most importantly) driving increased revenue while lowering the cost of acquisition, especially within the first few weeks of an install. More specifically, retargeting campaign users also made 37% more revenue events in the first 30 days than new user acquisition campaigns.

What does this mean for marketers in Q4? Consider prioritizing your lapsed user segment alongside other remarketing campaigns now to reap the benefits during the holiday season. Ultimately, these are your most valuable users and they’ll likely be the most engaged with your mobile app when budgets and revenue count the most.


Related Articles

Apple's latest version of Safari in macOS High Sierra includes Intelligent Tracking Prevention, which prevents first-party cookies from being used in a third-party context beyond one day, and purges them completely after 30 days. No matter your industry, attracting return visitors through increased engagement will ultimately build your revenue stream. Here are three engagement strategies to keep visitors on your site and draw them back in after they've exited.
It's getting harder and harder to "game the system" with exploitive linkbuilding strategies and blackhat SEO. In short, it's not just about keywords; it's about creating a cohesive and appealing user experience. This is known as organic optimization. A strong linking structure and other internal SEO best practices can provide that. Here are four considerations to keep in mind when optimizing the internal SEO of your website.
Everyone has heard the cliché, "every company is a technology company". While we know that's not true, it is true that every company is powered by technology. It used to be that an internet connection and a Microsoft office subscription was good enough for small companies, and for larger companies, same thing but add some servers. Now, though, with the influx of data that needs to be managed, a solid IT infrastructure is more than necessary.
Not all online shopping experiences are created equal. Poor web and mobile experiences like load time delays, error messages and lost shopping carts can damage a company's reputation and turn customers away. Here are four strategies e-retailers can use to optimize their websites to meet peak demand not only during the holidays, but throughout the entire year.
As "always on" audience-driven engagement further infiltrates marketing consciousness, those brands that want to create high quality content more efficiently-and strategically take into account the diverse interests of their audience-are starting in-house content studios. These operations generate a variety of content forms and types and are led by trailblazing, first-generation content leaders. In 2018 content studios will continue to flourish, but there will be some things to watch out for.
Finding ways to boost your email click rate is key to generating more leads and increasing sales. To get your emails read this year, there are a few ways retailers can optimize their email strategies to, not only increase click rates, but conversion rates as well. It all starts with striking a good initial impression and cultivating the relationship from there in a series of welcome emails that tell a new customer or subscriber everything they need to know about your brand.