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

Dec 13, 2017

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.

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