For the longest time, mobile user acquisition and retargeting have been viewed as separate stages of the mobile funnel: the traditional mobile advertising approach has taught app advertisers to first start with user acquisition focusing on install volume, and only then think of re-engagement and retargeting as an afterthought at a later stage when user interest starts diminishing.
A user’s journey on mobile follows a path similar to the traditional marketing funnel called AIDA (Awareness, Interest, Desire, Action). We see that when the AIDA funnel is applied to the user’s journey on mobile, it begins even before the app is downloaded. It starts with potential users viewing, clicking, and installing apps. It starts with potential users seeing, clicking, and installing apps. It is the post-install phase that ensured users become true customers. Modern app advertising, hence, cannot ignore acquisition and retention, focusing throughout on optimizing performance.
In the short history of mobile user acquisition, advertisers have increasingly sought ways to spend their budget to deliver tangible returns for their app. In the initial days, installs were the key focus, cost per install (CPI) pricing a preferred payout method. For advertisers coming to mobile after decades of cost per thousand (CPM) pricing on the desktop, CPI was the model of choice. With this approach, the marketing funnel stopped at the install. Over the last couple of years, as post-install quality and ROI emerged as key metrics for advertisers, action-based payout (CPA) and focus on lifetime value has become a preferred method for advertisers seeking true results.
For advertisers wanting to know the users who engaged with the app and can become customers, engagement has become a top priority for marketers over just installs, and performance-based pricing has evolved as a “third wave” in the pricing history in the industry.
Check out our infographic that dives into the evolution of performance-based pricing and explains how advertisers can better control their spend, and how they can achieve true results throughout the user’s mobile journey.
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