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Winning the CPI Holiday Race: Data Learnings from Q4 2017

Jillian Gogel Jillian Gogel Oct 11, 2018

The holiday season is upon us and with it the promise of major revenue and user acquisition. In fact, according to a recent report by eMarketer, mobile commerce in the US is predicted to surge by 32% this year. No doubt, it’s going to be huge.

App marketers know that with the right preparation and momentum, Halloween, Black Friday, Cyber Monday, Christmas, and New Year’s, among other occasions worldwide, can be leveraged to ride massive traffic and revenue waves into the new quarter. It is the most wonderful time of the year, after all.

To make it wonderful for app marketers as well, they must first be aware of and armed ready for the challenges of heavy competition and much faster dynamics ahead. One of the most critical of these is inevitable media cost fluctuation, which can make or break an app’s profitability if not navigated with intention and foresight.

We recently looked back at the CPI rates in Q4 2017 for five countries: Germany, Brazil, Russia, UK, and the US. Across both iOS and Android in two verticals, shopping and gaming, our findings showed that they were consistently and particularly influenced by some holidays more than others. Let’s take a closer look at some of the most important findings that will help marketers better plan this Q4.

Data pulled varies by country depending scale and ability to achieve statistical validity.

 

1. Shopping CPIs take the bulk of holiday effects

Explore the data using the interactive charts: hover to see data from specific days, or click on the legend to filter lines:

We can see that customers are busy seeking the best deals in the shopping frenzy of Black Friday, and so are ad networks, it seems. In 2017, all five countries experienced varying distinct increases in CPI influenced by Black Friday, which landed last year on November 24.

  • Starting around the second week of October, the US experienced the beginning of a sharp 44% increase before its highest seasonal peak on 20/10, ahead of the heat of Halloween, Black Friday, and Cyber Monday. Rates decreased gradually after that before again peaking one or two weeks before Christmas to catch last minute shoppers.
  • All countries except the US found themselves influenced by Black Friday’s consumerist nature, with the day after bringing higher rates than the holiday itself. Overall, Brazil led the pack with a nearly 2x climb from the day before peaking the day after, while Germany’s rates shot up 3x from Black Friday to the day after Cyber Monday. The UK was not as severely affected, but still felt a 46% increase from Black Friday to peak the day after Cyber Monday along with Germany.
  • The end of November held extreme, rapid monthly increases overall – especially with Germany jumping over 3.3x between 20/11 and 30/11 and the UK by 2x – but, surprisingly, December showed far less activity around major holidays, with the exception of the UK’s 34% rise from Christmas to 28/12.

 

2. US CPIs peak shortly before Christmas on iOS, and are nearly double those on Android

Shopping fluctuations by platform showed significant differences.

  • In particular, on Android, the US maintained a fairly level rate through November and December with some peaks ahead of Halloween.
  • There is little  change around Christmas, which has a significant impact on iOS.

On the other hand, iOS saw a few extreme fluctuations, concentrated, first, in the lead up to Christmas, and then again between Black Friday and Cyber Monday.

  • The star of the US’ holiday show was the CPI activity before Christmas. Surprisingly, the towering peak a day or two before Christmas Day was the second highest for its iOS 2017 holiday season, at $5.90 on 23/12.
  • In the lead up to Christmas Day rates leaped by 64% from 7/12 to 23/12, peaking twice before an end-of-the-year decline. The increase is especially driven between 18/12 and 23/12, rising by a whopping 56%.
  • Rates in the US on iOS were not just high; they were more than 2.5x the amount as on Android, with an average of $4.20 compared to $1.60. In addition, the standard deviation for iOS was more than double in fluctuation as well as price.
  • Lastly, between each of the three months themselves, there was noticeable difference in the average monthly CPIs. With averages falling at $4.65 in October, $3.86 in November, and $4.46 in December.

 

3. Gaming CPIs peak in October as rates remain consistent between Android and iOS

Gaming costs were far quieter than shopping in both November and December, even on and after Christmas.

  • The CPI peak for all countries we looked at occurred on and around Halloween, but built momentum from the beginning of the month. The difference between the monthly October average compared to November and December combined was significant – 118% in Russia; 74% in Germany; 48% in Brazil; 47% in the UK; and 31% in the US.
  • As November started, all four countries shifted quickly to stagnant rates and experienced only slight decreases, if at all, until the new year. Most significantly, rates in the US dropped sharply within the last 10 days of the year, remaining more or less on the decline even on Christmas.
  • Though fluctuations follow nearly the same pattern from October to December in gaming, prices were 25% higher, on average, in iOS. As with both platforms combined, October experienced the busiest period of fluctuation overall before dropping sharply at the beginning of November and remaining stagnant until New Year.

 

Key Takeaways:

If you’re a shopping app marketer, be well prepared and strategize for the holiday season. While both gaming and shopping, as well as Android and iOS, are affected, the most drastic fluctuations in CPIs occur in shopping apps. This is likely due to the consumerist nature of Black Friday and Cyber Monday, above all other holidays studied, which drive in-app and in-store sales… and CPI increases due to heightened demand. Be sure to include data from previous years when creating a cost-effective and flexible user acquisition strategy for your app if you fall under this vertical.

Start targeting users EARLY. Our data shows that it may be beneficial to start your advertising efforts as early as mid-October, accounting for the Halloween, Black Friday, and Cyber Monday waves. Reaching target audiences before those extreme spikes in CPI rates occur gives you plenty of time to understand your users and their preferences, which you can later use for more effective re-engagement campaigns on the major holidays themselves.

This is particularly important for shopping apps and the US, whose CPIs will rise drastically and dramatically throughout mid-October and mid-November before most holidays. On the other hand, since rates proved to be distinctly lower the day or two before each holiday, this may also be a good opportunity to launch powerful, data-driven campaigns at budget-friendly prices.

Pay close attention to your revenue. Ultimately, CPIs are just one side of the overall ROAS coin. While high costs can negatively impact your app if left unbalanced, it is also important to understand if that high cost is matched by a high overall LTV. High CPIs may not necessarily be a downfall – your app may still reap the benefits of high profitability if your holiday season advertising efforts bring high-value users.

Christmas does not have as much weight as may be expected. While the UK stood out as having the most distinct increases and peaks on and around the holiday, all other countries showed little extreme activity on that day itself, surprisingly maintaining fairly consistent rates throughout the period. When planning your budget for the holidays, remember that the true cost of Christmas does not happen on the day itself (in all countries except the UK), but instead a couple of weeks ahead of time.

Take advantage of surprising US trends. In both shopping and gaming, the US pulled out some surprises at various points in the holiday season. Given the sharper increases well before Black Friday and again one or two weeks before Christmas, one good strategy for shopping app marketers looking to crack the US may be to aggressively engage users as early as a month and a half before Black Friday and two weeks before Christmas. This creates an opportunity to run more efficient re-engagement or retargeting campaigns on the holiday itself.

For gaming marketers, dispel the myth of sky-high, post-Christmas CPI rates and consider running both UA and re-engagement campaigns in the last 5-10 days of the year for high, cost-effective New Year impact.

Watch out for Brazil spikes at end of November. In shopping, Brazil peaked sharply in the Black Friday and Cyber Monday time range. While the rest of the year was much quieter, the end of November in Brazil stands out as consistently spiking hard when the sales come out. As a marketer in this country you can expect your CPIs to soar. Account for this when strategizing your user acquisition budget.

 

To sum up, the end-of-year holidays are not to be underestimated when it comes to fluctuating CPI rates, though some are more extreme in influence than others. When harnessed well, the holidays can be major boosts for ad traffic, user acquisition, revenue and profitability. Just remember that the mobile ad space will be shifting along with your strategy and user expectations; if you don’t adapt, you will be risking more than a lump of coal in your stocking.

Here’s to a prosperous holiday season!

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