Many of our regular readers will have already read our Beginner’s Guide to Programmatic Advertising. This piece expands on that accessible introduction with a renewed focus on programmatic media buying’s potential for user-acquisition.
Switching from an ad network to programmatic is not often a simple process. App teams often lack the knowledge, resources, and data required for a smooth transition. Understanding why apps endeavour to persist in spite of these challenges, it’s important to understand their growth needs and the limitations of the alternatives.
Growing apps have an insatiable appetite for users. In the climate of overly saturated low-impact ads on self-attributing networks (SANs), unsatisfactory reporting from ad networks, and rampant attribution fraud, it is unsurprising that UA-focused marketers seek to satisfy this appetite with additional reliable user-acquisition channels.
This urgent demand for growth is driving a shift towards programmatic as an increasingly important acquisition channel. This is especially true for highly competitive, well-funded and on-demand apps.
Programmatic user acquisition’s advantages all lie in the data it uses. Because programmatic advertisers have complete control over their data, it never needs to be passed onto third-party networks. Furthermore, rather than basing Return on Ad Spend (ROAS) optimization on bulk-bought data, programmatic buying is always based on current bid data. This real-time bid data is not only more accurate and efficient than historical performance data, but it ensures that advertisers only pay for results.
For many marketers, this results-driven approach is the antidote for elevated cost per mille (CPMs) on Facebook and Google. However, while programmatic is generally far less labour-intensive than traditional manual insertion orders, scaling with programmatic remains a demanding process.
How to Scale User Acquisition with Programmatic
Leaving aside retargeting (a process that requires a distinct strategy), scaling programmatic user acquisition requires two essential elements:
A Substantial Amount of Behavioural Data
Programmatic media buying is at its most effective when advertisers appreciate the value of the users they are targeting. For these advertisers, the larger their DAU-bases the better. With a massive behavioural data bank, they not only have greater reach but are able to target more potentially valuable customers via their advertiser IDs.
Real-time behavioural data enables cost-effective programmatic buying because it allows advertisers to target high-value users more cheaply than if they were targeting using broad LTV averages and demographic data. Identifying the users that have historically monetized and then targeting them in apps with low average advertiser LTVs is a highly effective way to achieve low CPMs. This is programmatic’s UA equivalent of “buy low, sell high”.
Effective Bid Logic and Pricing Systems
The second essential facet of programmatic user acquisition scaling is effective bid logic. To effectively price bids, the aforementioned data must be analysed then utilized to produce price targets.
Programmatic media is always purchased via a cost-per-mille (CPM) model. Through a process often described as “learning”, the estimated value of users’ monetization potential is converted into a CPM bid. Performing this process requires the continued observance of conversion rates in order to determine which CPMs lead to CPI bids.
While much of this process is, by its nature, automated, the effort required to stay on top of it should not be underestimated. Running effective bid logic and pricing models involves rigorous data aggregation and conversion to user-level bidders. For this reason, it is highly recommended that advertisers seek the assistance of expert analysts and programmatic specialists.
Scaling programmatic media buying as a channel for user acquisition is a high-effort, high-reward strategy. For more on programmatic advertising, don’t forget to check out our beginner’s guide. For assistance in running your own programmatic campaign, get in touch with us below.