CPI, KPI & ROI: A Mobile Ad Network’s Perspective
With the explosion of measurable data from mobile marketing campaigns, smart marketers are becoming increasingly performance-driven. As a result, they are able to inform their activities not only on mobile but across channels.
In our Talking Performance series, we opened the mic to leading marketers across the industry who offered their take on how best to squeeze the data lemon. The final post in the series features a Q&A with Dennis Mink, the VP of Marketing at leading mobile app marketing platform Liftoff, who shared his thoughts and insights on the performance-driven app marketing space.
Shani: Why do many marketers say ROI is not yet measurable on mobile and across channels? Is the data unavailable, or are marketers not using the right tools?
Dennis: Actually, this has not been my experience. Nearly all mobile marketers that we work with are what I consider to be performance marketers, or at least performance oriented. They have a deep understanding of their cost per install, cost per post install event, conversion rates, customer acquisition cost and ROI. If marketers don’t yet have a grasp on how to measure ROI on mobile, it may simply be that they need to invest more time into making sure they’ve got their in-app events clearly defined and attribution setup properly.
Which pricing model do you most commonly use for UA? Do you see a shift towards CPA?
We’re big fans of the cost per action pricing model, where marketers pay only when we acquire a user who installs their app and converts in a revenue-producing post-install event, like subscribing or making a purchase. CPA pricing has a clear advantage over CPI buying in that it de-risks the marketing spend. Marketers no longer need to worry about wasting advertising dollars on installs that will never convert, unless of course the install is all a marketer wants, which is never the case. We offer CPA pricing to nearly all of our customers, and they love it.
Which metrics do you focus on in your optimization efforts and why?
Though we typically optimize campaigns for a dozen or more KPIs, 3 key metrics that we emphasize include (1) win rate, (2) cost per install and (3) the cost per action. These three KPIs combined are what we find really moves the needle in terms of acquiring ROI positive users at scale.
How do you compare the performance of your different ad formats? Are they even comparable or should they be treated in silo?
Most definitely we compare the performance of different ad formats. We compare clickthru rates, conversion rates, CPI and CPA. By understanding how one ad format compares against the next, we can modify our bidding so that each ad type can generate a positive return. Plus we often find that, while one ad format may be more expensive on a cost per install, when comparing on CPA, that same ad format can easily be a top performer.
What role does RTB play in your mobile activity?
RTB plays a central role at Liftoff. All of the inventory that we buy is bought programmatically in real time across the major exchanges. By applying machine learning technology to bidding and buying across the RTB exchanges, coupled with a very large database of over 2 billion mobile profiles, we’ve helped our customers scale and grow their business.
What’s your dream KPI even if it’s not yet available?
Great question. As the mobile marketing industry becomes increasingly focused on driving engagement in downstream events, especially non-gaming app marketers, a KPI that captures the probability that a user will convert prior to even serving them an ad would be tremendously helpful to marketers. This would help further de-risk the marketing spend while making user acquisition as a whole more effective.