App Installs: The Reality & Responsibility of ROI

I have been a part of the mobile ecosystem for a fairly long time. I might even pride myself on having a mobile only career (sounded much cooler in 2016, 'mobile first' is still hot though) - but then jargons are just that, jargons.

In these 10+ years I've seen mobile bear the brunt of many such jargons. ROI probably topped the list. ROI, a jargon? Well when someone measures ROI as a great CPI, read really low CPI (resulting in very high no. of installs), and believe me this has been the most popular metric, it ends up being just that. A jargon thats never seriously acted upon.

It was perhaps late 2013 when I first experienced 'exceptional ROI' performance - an ad network was delivering app installs for a CPI of Rs.20 - I was rather shocked, amazed perhaps, and even impressed. I was a novice who had no clue. A 'novice' who had been helping shape mobile advertising for atleast 3 years back then.. but few years hence (read now) I could get you that install for Rs.7 or perhaps even less. Amazement be damned.

Whether you're part of 'retail tech', 'fintech', 'edtech' or any 'xtech', it's likely that mobile is today at the very centre of your product / innovation. Just yesterday morning I saw a requirement by a popular gaming dev co seeking experts for mobile game downloads, and that got me thinking about how almost everyone in the Start-up / Mobile ecosystem must have to grapple with "Installs".

User Growth is not easy, and unless your product is ultra viral, you will most likely need to spend on advertising to drive those installs.

But its very very very (I could seriously add a few more very's) important to understand whats really happening behind the scenes. What goes down when you ask someone to deliver you App Installs, add to that App Installs 'with ROI'?

Lets start with this - a supra high level view of sources that will drive your Installs:

Search = Google = Awesome

If its intenders you want, you just can't beat Google. Imagine search to be your lowest hanging fruit. There are people who are looking for just what you have.. all you have to do is tell them about it.

Use Google's search based App Install campaign to target app installs on specific keywords or, if you are a generic application with a wider appeal you can even go in for the Universal App Install campaign. Typical CPI can be anywhere from Rs.50 to Rs.100, Mostly 100+ when needing higher scale. We get a CPI of almost Rs.185 on Google for our app targeting potential SMEs.

Social = Facebook

If you're in India, then for the time being Facebook is your best bet for App Installs. Twitter is the next possible option, but is atleast 2x or 3x more expensive. So first get a hang of Facebook and then think of moving to twitter. But to be fair, you need to forget 'Expensive'.. CPI is irrelevant. My statement above (and I purposely have not edited it) shows the bias towards channels basis CPI. Twitter may have a high CPI but may result in a much more active user, which in-turn may have a much better LTV.

As a generic rule when using search or social while CPI is not important, CTR is critical. Good CTR = Low CPI.

Use as many filters as possible to define multiple campaigns right from Devices to Geo to Age to Gender to Interests. If you already have a large user base then draw any learnings on such filters and apply them to your Facebook campaign. It's painful but you may need to have multiple variants of filters to find what really works. Again measure each of these by CTR - CTR is not just about the creative but also about the targeting and hence the filters are important.

Typical CPI = You can start with Rs.15 perhaps but you'll shoot to upwards of Rs.100 in no time. But again if you're a great brand you might just be able to pull of a sub Rs.50 campaign on scale. Imagine PayTM advertising during demonetisation - would be good to know the impacts on CTR and CPI (incase anyone from PayTM reads, do share). We get a CPI of Rs.255 on FB for our app targeting potential SMEs.

Display aka Ad Networks aka Affiliates = Be very careful

Here is where it gets interesting. And complicated.

If someone comes across and tells you that they'll drive app installs for Rs.30 CPI, be afraid, very afraid. Remember I mentioned you could get one for less than Rs.7? Infact I noticed one co even offering Free Installs at ad:tech ;) You might want to go meet them. Just remember what can be done with Installs can be done with any 'action' be it retention, activation, log in etc.

Just to demonstrate here is what it will take to deliver a CPI of Rs.30: Rs.30 CPM (1000 Impressions) x 1% CTR = 10 Clicks x 10% conversion ratio = 1 Install. If you're from this industry you can imagine what inventory you would get for Rs.30 CPM, how kickass a CTR of 1% is and how ultra awesome a conversion of 10% is. Do the math. There are no free lunches.

The reality of Display unfortunately is that once you give your campaign to an Ad Network or an Affiliate Network (no matter how well known), your campaign will go down a rabbit hole... you, or even I, would not know how deep that hole goes. You'll never know where the good ends and the bad starts (read fraud).

But by knowing you can achieve the very first step - acknowledge it, be aware of it, and possibly even strategise for it. For e.g. Rewards Apps or 'Incent' apps as they may be better known, reward users for certain actions - e.g. install this app & get Rs.10, signup and get Rs.50 and so on - a lot of Installs end up getting consumed by this segment, many times entirely unknown to Brand / Product owners. But if you know that this channel is being utilised then you can use it to your advantage and more importantly measure if for what it is. If this channel gives you an Install for say Rs.10 where you reward the user with in-game credits, and this user goes on to give you an LTV revenue of Rs.30, thats probably job done. For gaming apps I might go a step ahead and actually recommend this channel (with full visibility) and maybe it just works better than search and social. Maybe.

Be careful but don't be biased. Just don't be blind in asking your partners to meet CPIs. Typical CPIs: Rs.30 or I think 35 was the crowd favourite some time ago :)

Other channels mentioned under display like direct apps work mostly on CPMs and by their very design will, most likely, not result in meeting a direct ROI objective. E.g. popular news sites can have CPM > Rs.300 and going by the above math of CTR and Conversion Ratio if you are ad funded it'll take a really awesome performance to meet ROI, but hey anything is possible. The OEMs again are popular for OTA installs (sometimes forced without user consent - have sense to say no to those, and chose only user consent installs). And then there are the browser owners, the new walled garden of Operators in some ways - you'll have to pay a minimum of Rs.20 Lakhs a month or much more to get anywhere near those home page listings.

Google Display & Facebook Audience Network are good places to start experimenting too.

Edit: have edited the image to include App Stores as source of install. As pointed out in the comments, these can result in very good CPIs and perhaps also better LTV users. You may consider Apple App Store (not open in India yet) or Google Play Store via the Universal App Campaign - you also should look to distribute your app across 3rd party app stores like Getjar, 9Apps etc. which can help with greater distribution - they also do install campaigns at good CPIs but make sure your agreements allow only using their app store inventory, else these too will end up in the Rabbit Hole.

But then, how do I get my ROI

Real ROI is Really possible. It just needs you to expand your mind and go back to the basics, the very basics. Think product, think proposition, think why, think how. Why should the customer use your app / game? How often will they use it? Etc.

Then think LTV. Measure it. To the T. Or more so to the V = Value! And LTV has only one measure of value, REVENUE. Be it revenue from CPM or revenue from subscription / activation.

Above, if done right, will lead to a formula that could look something like this:

Good Brand / Product / Proposition = Good CTR = Low CPI + High LTV = better chances of achieving ROI.

Once LTV > CPI, you will have achieved Nirvana. Real ROI.

All In All, YOU, yes you are responsible for ROI

Don't look for an agency that will make your troubles theirs. Don't look to shift the responsibility. Instead arm yourself with Platforms. Maybe assisted by Agencies who use these platforms, but be sure its not just an agency. You'll need Platforms that can measure the f@#$ out of data, by source. Platforms that can gauge, assess and enhance ROI. Platforms that can track, and act.

From what I have seen, and biases aside, I would recommend you evaluate these, listed alphabetically and not in any order of preference:

• Affle mTraction [Disclosure: My first co was acquired by Affle and I contributed to building this stack] + useful for measurement of channels + auto management of channels - mostly for enterprises - install ad formats can't be tracked for Twitter, FB (other formats can)
• Apsalar - useful mostly for measurement + support for fb twitter tracking + free install tracking for a bit - not really useful for channel management (everything is manual)
• Appsflyer - useful mostly for measurement + support for fb twitter tracking + free install tracking for a bit - not really useful for channel management (everything is manual)
• Betaout - useful for measurement + great segmentation + notifications email & sms promos - install ad formats can't be tracked for Twitter, FB (I quite like what they're doing)
• MixPanel, App Annie, Kissmetrics etc. usually do not meet requirements of channel management since their focus is more on user flows, segmentation and push notifications, but might still be able to serve the purpose

Its important to disclose what we currently use at our own startup - markt.ooo - given our spends are minimal and that we only rely on Facebook and Google for driving our app installs for now, we use three SDKs currently: (i) Facebook's (ii) Google's (iii) Crashlytics. We also shared our CPI numbers alongside each section above.

Glossary for the uninitiated: CPM - Cost per Mille or Cost per Thousand Impressions, CTR - Click Through Ratio, CPC - Cost per Click, CPI - Cost per Install, OEMs - Original Equipment Manufacturers or Device Makers, OTA - Over The Air, LTV - Life Time Value, ROI - Return On Investment :)

If you'd want to know more or have any specific questions you can post them here or tweet to me on @anuragsingh - if I can, I'd be happy to help. Hope you found this useful.