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Busting Myths of User Acquisition

While your product might be the coolest product ever, no one will know about it unless you attract enough users. User Acquisition is one of the most efficient approaches to bring your product to high app store position and make it visible for your users.

“Where to find users?” – Every developer, be it a novice or an expert, keeps asking themselves this age-old question. Even if your product is of highest possible quality and you can’t help feeling proud, do try to remain cool-headed. While that might be the coolest product ever, no one will know about it unless you attract enough users. In the vast majority of cases, when seeking information about user acquisition (UA), you will come across a great number of posts where the authors suggest creating a microsite/landing page for your application, starting a blog, and mailing out press releases before the app is approved by the app store etc.

All of these are definitely important things to do when trying to attract a user to your game or application. Somehow, most of the above-mentioned posts fail to mention the importance of affiliate marketing, networks of partners, paid traffic and other effective user acquisition tools.

The information on affiliate marketing, which is available to the wide audience of non-technical but keen readers, is full of omissions, fallacious arguments and myths. We have therefore decided to bust those myths just like Jamie Hyneman does on the Discovery channel, and asked Yuriy Yashunin from Zenna Apps and our long-term partner who is also an experienced traffic arbitrage specialist Vladimir, barsag.com, to answer a few questions.

Profile:

Yuriy, СМO Zenna Apps

Vladimir, barsag.com

Vladimir about himself and his work: “I have been working with performance marketing for about 10 years now, of which 3 years I have been into the mobile industry: mobile content, leadgen, CPI. I almost never work at the Russian market for a number of reasons. There are several remote teams organized in one CPA agency.

It all started when a friend of mine advised me to read a blog of some “punk”. Back then, it was extremely popular to call your blogs like that, there was “Izhevsk punk”, some other punks. People made money out of it. I read the blog, tried it myself and I got lucky. I started with ringtones, and then I added everything else expect for the adult content.”

Stereotype: There are only bots and incentive traffic in СPI.

Vova, barsag.com: Some time ago, there was an article posted on Habrahabr that told us about the dark side of mobile traffic. It said things were bad, adverts could not work, CPI entirely consisted of bots and incent. There are, of course, bots in CPI as there are in CPM. There are automatic installs, and motivated traffic is often sent where no one is happy to have it. Still, that is only one side of it. On the other hand, it is not that bad. If someone does not want to buy hidden or mixed incent or bots, they don’t. Take incent and bots away and you will see that nothing changes dramatically. The cost of the install and the cost of traffic will come to balance once again. It will become easier to work for adverts and mediators. A few players who used bots and mixes to make money will be driven out of the game. The industry will not be shaken as much as some people expect it to be

Yura, Zenna Apps: A lot has been said and commented on this already. I believe that the incent in the CPI model can be tracked faster and easier than the incent in the CPC/CPM models. Moreover, everyone is interested to have a long-term cooperation. Zenna Apps’ key philosophy for traffic companies is to help find high-quality paying audience for an advertiser and keep providing it for as long as possible. And “shockers” like that are usually spread with one particular purpose.

Stereotype: To run a successful UA campaign it is enough to use 1 or 2 sources - Google Adwords and Facebook. All affiliate and partnership programs work with them and therefore they re-sell nothing but air only with extra charge.

Vova, barsag.com: It depends, as usually. You can use Facebook and Adwords. On the one hand, there is very much traffic there. On the other hand, they don’t have ALL the traffic. Moreover, those are complex sources, especially if you are a mediator and not a developer or publisher. Many years ago, I entered the mobile industry for this same reason: I saw the opportunity to get off the AdWords and Facebook hook, and start working with dozens of other sources. That being said, I have to admit that, despite working with a great amount of sources now, I’ve returned to and intensively use F/G.

Yura, Zenna Apps: To bust the myth about the main traffic sources, or, on the contrary, to support it, the advertiser has to take into account two criteria:

  •  In what regions do you want to run your successful marketing campaign? When talking about the USA, Western Europe, Russia, I say it will suffice. But it won’t be enough for Japan, Korea, China, Australia or Canada.
  •  What daily cap/ maximum CPI rate/ overall budget will your successful marketing campaign have? If those 3 KPIs are low, then it will be enough. If they are high, you’ll have to think of something else.

Stereotype: Mobile marketing is cheaper than desktop marketing. The cost of CPI is now overrated by those who sell it.

Vova, barsag.com: Definitely not, if only because in the majority of areas mobile traffic is converted much better. I remember reading that smartphone screen space is soon to become the most expensive space in the world. I totally second that opinion.

Yura, Zenna Apps: I believe that it (ed. - mobile marketing) is not only more expensive but a great deal more expensive! There are a few main reasons for this:

  • mobile websites are outnumbered by desktop sites, which makes the competition between those much tougher;
  • mobile is changing all the time, it is hard enough to find one source that will work 100%, that is why you have to constantly test sources and pay money for this;
  • tough competition in its turn results in high prices for traffic;
  • the average cost per install increases yearly;

Desktop site owners do not want to risk creating mobile versions of their websites because they believe these expenses to be unreasonable. Statistically in the USA, much more money comes from mobile. People prefer to call a taxi, buy clothes and food, order meals using mobile websites. During holidays, these numbers grow immensely, of course. It is also important to remember that we all live in the so-called “multi-screen world” and usually switch between at least 2-3 devices during the day.

Stereotype: Offer re-sale can only be stopped if the cooperation is transparent.

Vova, barsag.com: Why stop offer re-sale? Speaking about making the cooperation transparent, in my career, there has been only one situation when I was asked to reveal my traffic source. It happened a few years ago when the regulator started the bankruptcy proceedings against the advertiser. It all depends on the advertiser and the parameters used by the advert to measure the quality of traffic. If it is CR only, any fluctuations might result in his being asked to stop the traffic and reveal its source. If other parameters are used, such situations never happen. Besides, this is much more common for the .ru domain.

Yura, Zenna Apps: Big-time gaming companies do seek to be as transparent as possible to eliminate the possibility of re-sells (at least multiple ones) or driving up CPI. At that, they can easily operate major traffic sources. However, there are “buts”:

  • the market is still differentiated enough and it is hard to seize all the channels by internal media buying;
  • there are regional market characteristics (in Korea, Japan, Russia) that you cannot understand unless you’ve been working there for a long enough time. That is why we can see such a trend when working with advertisers, but it is hardly an across-the-board one. Now there is a frequent request to at least reveal the “type” of traffic channel.

CR is not even a traffic quality parameter, it is more like an assisting indicator that can provide us with answers to the following questions:

  • does this CR comply with the given traffic channel? For example, a new VK game can easily give you the CR of 20-25% and it is normal, banner ad network on antivirus vertical - 0,5-1%;
  • how greatly does the CR range change by one channel or by the hour? This is what can indicate the fact that the incent has been used.

Stereotype: СPA will replace CPI as a fail-safe way to attract a paying user.

Vova, barsag.com: The market is complex and changeable. There will be adverts who will enjoy working with in-app CPA, there will be those who will prefer pure CPI, and even those who will buy CPM after improving their buyers. At present, I cannot see any explicit CPI -> CPA trend in mobile. In most cases, decreased transparency and more complex conversion requirements in the area they cannot control is a huge disadvantage for marketing specialists and people whose job is to attract traffic. It means that I, as a publisher, will be much less interested in such an advertiser. The desire to encourage publishers to provide paying users is pretty clear, however, (1) I cannot influence the conversion into in-app purchases, (2) most frequently I cannot segment users accurately, or the segmentation will be much less obvious than when it is analyzed in terms of traffic/installs.

Yura, Zenna Apps: Although CPA in mobile is something people are now trying to build a trend on or even use to create a new unique product, the underlying question is still the same: who will take all the conversion risks? This trend has been very popular at the desktop market for a while. The truth is, all advertisers have always worked and keep working with the CPA model. Adverts have been those taking care of the conversion risks – what is the conversion in paying users, registered users, or those users who have leveled their hero all the way up to N, ARPU. The channels that do not comply with the quality characteristics are disconnected.

The market is overheated now and I honestly don’t think that there will be any active or mass transition of mobile (especially its gaming element) into CPA. Although, advertisers probably wouldn’t mind.

Stereotype: The cost of video advertising as well as the quality of users it brings are highly overrated.

Vova, barsag.com: I can’t say anything about the quality of such users, adverts do not show this metrics but the video traffic conversion is great indeed.

Yura, Zenna Apps: the demand for “video advertising” channel has increased greatly over the last year. We’ve witnessed some major mergers and acquisitions at the market, new players have appeared and big game titles are now making excellent advertising videos that are every bit as good as brand TV-commercials, which makes it all the more difficult for middle and small advertisers to cross the market entry barrier. For me, video advertising is primarily a new cool type of user acquisition. A 15-second video can show you so much more than a regular static banner, which means it can attract more users. In our practice, we have had both amazing results in ARPU/30 days up to $4, and unsatisfactory results. Video advertising is no cure-all, of course, but this direction is likely to keep developing actively in 2015. Over time, it will be replaced by “interactive” advertising with the text gameplay of the game itself, provided in, say, HTML5 format.

Stereotype: You don’t need landings in mobile, they are desktop leftovers.

Vova, barsag.com: You do need those! It is hard to start utilities without landings, and it is 50 / 50 for games. It so often happens that a good pre-land can increase your CR many times. Landings for games are often justified when intentionally narrowed targeting is used, and in such a case, the user's attention is focused on 1-2 most valuable game specifications.

Yura, Zenna Apps: It depends on the vertical: utilities, anti-viruses, partly gambling – you can’t do that without landings. It is very helpful. In the game industry, app store pages are, in fact, universal landings. Thus, for example, they regularly optimize the Google Play page and now it looks very attractive, no pre-land page can make it look better. On the other hand, these landings are often used to “sort out” untargeted traffic, to aim the audience at target games. In this case, using pre-land pages is fully justified.

Stereotype: You can’t possibly work with the price of $0.1-$0.2 per install. Such “third-world countries” as Africa or the Philippines have very cheap traffic with prices that are sometimes lower than those mentioned above. It is common to work with offers like these using the following verticals: anti-viruses, app stores, batteries. These offers will not suffice for Canada or the United States. Is it really impossible?

Vova, barsag.com: It is possible all right! It all depends on geo traffic and the approach you choose.

Yura, Zenna Apps: “install” is a very loose definition here. There is a huge difference between CPI of an Android utility in Indonesia and RPG of a hardcore iOS game in Canada. I’ve already said that: the market is overheated. That is why bids are growing quickly. No matter what we say now, what figures we introduce, the information will no longer be valid or accurate in two months’ time.

Affiliate marketing is full of unique characteristics, its own rigid rules. Nevertheless, it remains an interesting, risky and at the same time very profitable business.

Stereotype: only people who have already spent much money, have a financial history and a big number of offers on the go, can work successfully in VK.com and [email protected] These networks provide discounts to those who have invested heavily in them. Novices will not be able to work like that because the price they will have to pay will be much higher than the price experienced folks pay. Still they say that typical, stock, stolen or copied creatives allow working effectively in these networks.

Vova, barsag.com: I agree with the first part of this statement, the success of working in TM and VK depends largely on 2 things:

  • "special competitive advantages" - discounts, bumps, permissions;
  • infrastructure: if you can launch, test and get all the traffic from an offer in a few hours, you’ll be great, if you can’t do that – too bad for you.

As for the rest, I don’t think that coping somebody else’s campaign even if you know all the targeting parameters, will work. External coping (when you look up the creatives, landings or sources) almost never works. There are nuances here: the account and traffic return history on this specific campaign, bidding strategy, targeting, special conditions on the part of the advert or the source. It’s not like that with TM, here you can even add stock creatives if you have competitive advantages and infrastructure.

Yura, Zenna Apps: In fact, such an opinion is justified. Clients always choose the most favorable terms, and having traffic sources revealed is one such term. Only if your offer is exclusive or unique enough, you can try to force your way straightforwardly. If there is a direct competition for an offer, the conditions are not so comfortable and it is much more difficult to get cost-efficient downloads.

Stereotype: adverts and partnerships always shave.

Vova, barsag.com: The truth is somewhere in between, I guess. On the one hand, shave is not such a widespread phenomenon. Still, such things really happen. In CPI, it is usually the advert who plays such tricks. They bought much traffic but failed to control its quality at the very start, so they chose not to pay because they didn’t like the quality. Or just not to pay, for no reason at all. Partnerships usually side with publishers because those are their capital asset, though I must admit there are exceptions. What’s different about this is that affiliates start complaining and blaming everyone at any single conversion loss, which does not always happen as a result of a shave.

Yura, Zenna Apps: Talking about partnership programs, I’d say it all depends on how much its owners or managers are concerned about their reputation. If such malpractices that include deceiving your partners (in this case, affiliates) are common for them, they will try to lure away the advertisers with the help of dumping. On the other hand, you can’t possibly build a healthy working relationship or a stable business like this. It is a dead-end road. There are sporadic attempts on the part of advertisers to deceive and hold out the money. You cannot eliminate such risks. However, it shouldn’t be the partner’s concern.

Stereotype: CPI works from markets only, .apk - wares, gambling and adult content. In fact, there is a strong demand for .apk. It looks like traffic arbitrage specialists are frightened by .apk more than users.

Vova, barsag.com: Certainly, the .apk channel is used to upload different stuff. Midlets, subscriptions, gambling, Trojans. On the other hand, .apk is great for white utilities. With a more rigorous monetization system, users install those with pleasure.

Yura, Zenna Apps: The .apk market is unique. There are many grey areas so its reputation is somewhat tainted, and for a good reason too. We have detected decreased activity of this channel so we do not focus on it as much as we used to. One thing is clear .apk is not something market novices should try.

In 2015, we should be ready to see a rapid growth of video advertising, Facebook ads, merger of some big platforms like AdColony, Flurry, GrowMobile and so on. Users will be less willing to download new apps. However, they are also expected to spend half the usual amount of their mobile app time playing 1 or 2 favorite applications.

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