In the realm of app development, particularly in the gaming and betting sectors, there’s a common tendency to focus Key Performance Indicators (KPIs) on ‘new users.’ This often results in overlooking the potential of returning users, with campaigns primarily aimed at users who have never downloaded the app. The prevailing belief is that investing in returning user campaigns may not contribute to their KPIs and could potentially drain their budget. But is this the best strategy?
Before we delve into the benefits of targeting returning users, let’s define who these users are. Returning users are individuals who have previously installed the app. In the case of a CPAlead advertiser looking for more installs, this was likely through a CPI event. They might have uninstalled it at some point, have it installed on a different device, or have it on their primary device but haven’t used it for a while.
Returning users present a significant opportunity for re-engagement and win-back strategies. Re-downloads constitute a substantial portion of installs, especially in the realm of social casino apps. This fact alone should encourage app developers to allocate a portion of their App Store marketing budget to re-engage returning users. But how does this strategy improve overall performance if your primary KPI is new user acquisition?
Understanding Click-Through Rate (CTR) and Its Importance
Click-Through Rate (CTR) is a crucial metric that represents the number of times a user sees your ad and clicks it to view your app store listing. A high CTR suggests that Apple’s algorithm deems your app relevant to users searching for specific terms. A high CTR for these search terms allows you to secure more ad impression shares than your competitors.
Campaigns targeting returning users typically have a higher CTR than those targeting new users. This is because returning users recognize and trust the brand, having previously installed the app. Therefore, regardless of whether your campaign targets brand or generic keywords, the overall CTR benefits from brand familiarity. This enhances the app’s performance within the Apple algorithm, leading to more impressions.
How Does It Boost ROAS If Their Primary KPI Is New User Acquisition?
The returning user campaign allows us to acquire users at a significantly lower cost than before. The overall investment was lower, hence the revenue needed to meet the 7-day Return On Ad Spend (ROAS) KPI was also lower.
Another reason for the ROAS increase is that although the user is returning, they might not have made a first purchase during their initial app installation before deletion. Therefore, this purchase is still considered a first-time purchase, contributing to the ROAS improvement.
If you’re still skeptical, consider this: if a brand opts not to run a returning user campaign on its branded keywords, competitors can do so at a lower Cost Per Click (CPC). When a brand only runs new user activity, the highest Share of Voice (SOV) achieved for their branded keywords is limited. Incorporating returning user-targeted activity can significantly raise the SOV on branded keywords. This strategy not only protects your brand’s ad space from competitors but also reduces the potential loss of users to competitors.
In conclusion, by running targeted campaigns for returning users, we can improve the overall performance in the App Store. This strategy leads to a lower CPI, higher SOV, improved 7-day ROAS, and protects the brand keyword from competitive bidding.