It is now beyond doubt that CPA is the most comprehensive and cost-effective model for mobile marketing. Our helpful infographic explains its evolution while showing how it provides enhanced control over spend and results.
Mobile user acquisition and retargeting have long been viewed as separate stages of the mobile funnel. Traditional approaches to mobile advertising teach marketers to initiate campaigns with an overwhelming focus on user acquisition via install volume, then only afterwards to consider re-engagement strategies and retargeting once user interest has begun to diminish. This linear process is an ineffective method of acquiring high-value, active and enduring customers.
Giving too much importance to the initial download phase of mobile user journeys damages long-term goals of customer retention. The post-install phase is vital for the maintenance of the most valuable types of customers – active, enduring users. A focus on constant performance optimization must fuse user acquisition and retention throughout the app marketing process.
The traditional, inferior approach stems from the direct application of desktop-based models to apps strategies. After decades of web-based advertising focused on a cost-per-mille (CPM) approach, maximizing impressions above all else, the natural path for app advertising to follow was cost-per-install (CPI). However, while CPI provides a tangible measurement of returns for app-advertising, this over-focus on installs as a KPI is ineffective.
Over recent years, savvy advertisers have realized that post-install quality and ROI must be given more emphasis. The marketing funnel cannot stop at installation. Instead, action-based pay-outs should be taken as the key metric through a cost-per-action (CPA) approach. Aiming for life-time value is the way to achieve true results.
We are now in the “third wave” of performance-based pricing. For apps and mobile marketers, engagement should be considered a higher priority than installs. And yet it is only natural that advertisers would want a model that could be measured. That is why budgets should be spent on an ROI-centric, CPA performance model that incorporates the entire funnel.
In our infographic, we delve deeper into the evolution of performance-based pricing. It shows how these elements work together, balancing appeal to both new and re-engaged users.
Applift were the first mobile advertising company to offer true performance CPA. In an industry where legacy pricing models are still prevalent, we’re proud to say that our customers only pay for actual results. If you’re interested in finding out more, get in touch.