Is the mobile industry immune to the virus? Not really. From a business perspective, the past few weeks have been strange, at best, and worrisome for most. We see striking shifts in online and mobile users’ behavior, forcing all advertisers to make changes and adapt paid marketing strategies.
Working with this disruption forces us all to be more adaptable to make informed decisions. Retargeting strategies will need to be versatile and planned in a way that will allow app marketers to change the course of action if required.
Here we look at the top concerns on app marketers’ minds regarding their retargeting campaigns, the different scenarios and offer some “food for thought” to help professionals better respond to the current impact of Covid19.
The consequences of the Covid19 are seen everywhere, but they manifest differently depending on the nature of each app business and the geos where it operates.
One of the main shifts seen with this pandemic is the increase in organic activity for some verticals like food delivery, gaming, and streaming services, and the sharp decrease in conversions and app usage in verticals like ride-hailing, travel, fashion, and beauty, for example.
The uncommon organic demand seen in some verticals caused a situation where, in some cases, demand exceeds supply, pushing businesses to limit orders to essential purchases only (as implemented by the Singaporean e-grocer Redmart, for example) and decrease their investment in marketing activities.
Other of the significant impacts of Covid19 and subsequent preventive measures is also felt on logistics. App businesses whose monetization depends on the delivery of physical goods have their revenue heavily impacted and have, in many instances, chosen to stop marketing spending. Inditex is one of such examples, choosing to stop manufacturing clothes to support the production of medical supplies while halting their logistic centers and closing around 3,785 stores worldwide.
Travel and event ticketing businesses are severely affected by social distancing measures and country restrictions. Along with refunds due for canceled events and trips, these companies bear the revenue loss from all the events that are not being planned in the first place for the rest of the year. In these industries, the demand has been reduced to zero, and paid marketing can’t change that status.
Looking at Asia to find some clues
Looking at Asia, and in particular at China, can provide some hints on the direction the current situation might take. After all, Asia was the first region to be impacted, to take measures, and handle its consequences.
Stats from AppAnnie show interesting insights. Ride-hailing and car-sharing apps in China (DiDa, Didi, and Hello, for example) showed a drop of up to 75% in weekly sessions during the lockdown period. Now that the lockdown measures are being loosened, the country is showing signs of a slight rebound.
In travel, businesses from China started promoting substantially discounted offers for domestic travel (e.g., Mafengwo’s latest in-app promo campaign) and extending expiration dates on those same campaigns as an incentive to capture users’ interest again. In any case, demand for travel is still pretty much dependent on the travel restrictions and social distancing measures imposed by the government. Therefore, this investment in advertising travel promos might not result in immediate ROI.
The gaming vertical has shown an increase in organic installs across different markets in Asia, and various game categories (mid-core and casual games in particular), especially after more and more countries start advising users to self-isolate.
For verticals such as grocery delivery, that trend is similar. Grocery delivery apps in China saw an increase in monthly sessions, and, not surprisingly, the majority of these sessions were organic. There are signs that the demand for food delivery will keep on growing in several markets in Asia. In Thailand, the meal and beverage delivery market is said to increase by 17% to THB 40 billion (USD 1.22 billion) in 2020.
And to face this acceleration during the Covid19 period, the delivery businesses are finding ways to rise to the demand in orders while implementing safety measures. Companies like Foodpanda, Grab and Gojek already created drop-off options in their services to minimize contact between drivers and customers upon food delivery.
Across the Asian markets first affected by the virus and in markets that implemented quarantine measures early on, the trend follows comparable patterns. We are referring to markets such as South Korea. For app categories such as media streaming, health, fitness, and education, the uptick on organic activity is also noticeable. For the Korean market, the uptick was observed during mid-February and has since then shown signs of stabilizing to previous numbers.
For eCommerce, a vertical that is expected to grow in Southeast Asia, this rapid expansion poses severe strains when it comes to supply and delivery. Indian online grocers like Bigbasket and Grofers opt to implement buying limits per user to be able to reply to the order surge. Other companies, such as Flipkart, announced they would be suspending operations due to the difficulty in transporting and supplying goods.
Facing these circumstances, how can advertisers best adjust their retargeting strategy to this disruption? The need to adapt to all this uncertainty leads us to look for both short and long term answers.
In the short term:
In the long term:
In the short term, there is a need to evaluate what is the intrinsic value that your retargeting campaigns and your other channels are bringing. In these times, using the same measuring framework and KPIs you used before won’t bring gains in the short term.
This doesn’t mean apps will necessarily need to pause all campaigns. Instead, this predicament requires a new approach to measuring and analyzing performance: app marketers need to find out where they can spend in a smarter way, reevaluate their strategy, and set new KPIs, as a way to keep their brands present and relevant. This involves measuring for incrementality in regular intervals to complement attribution KPIs for marketing channel management.
It is crucial to power up your business with accurate data on the performance of all your channels. Only with detailed, reliable, and timely data, you will be able to make fast and right decisions. Using incrementality testing will deliver the complete transparency and iterative optimization that allows app marketers to make informed decisions faster, change course, and make smart budget allocation whenever needed.
Data hold the answers: advertisers will be able to spot any changes in the users’ behavior and identify potential “leaky buckets”. Users’ needs and behaviors are shifting now. Find out what those behaviors are for your vertical. In terms of messaging, avoid the mere “push sale,” switch your narrative from what you can offer to focus on what users might need from your app right now. Don’t be tone-deaf. Be present but provide clarity and solutions.
Concurrently, think about a long-term approach to your retargeting strategy. Plan retargeting campaigns to continue driving conversions in user segments that offered the highest ROAS potential before this crisis makes perfect sense now.
A long-term approach also supports app businesses in maintaining a healthy brand presence. This course of action is particularly relevant in cases where the sharp increase in organic activity is driven by the Covid19 impact in the markets. This organic growth might be short-lived, and it might revert once the virus is increasingly contained. Therefore, continuing to engage with your customers and focusing on retaining them using retargeting ads with personalized messaging can prove to be a wise move in the long-term.
In sum, what can we do in an environment like this? Play the long game: reevaluate, react fast for short term results, and prepare for the aftermath.
Although no one can predict when the current situation will improve or guess how the app businesses will fundamentally change, it is wise to prepare for a recovery scenario. If and when the economy shows signs of a comeback, we can expect app businesses all over to gear up and start moving at full speed. In this competitive scenario, the goal will be not to be left behind.
We all have an extraordinary challenge ahead of us. Making informed decisions in this crisis period, testing, and adapting your strategy every few weeks will be the norm. Make sure you have the right tools and partners at your disposal to do just so.
Are you interested in discussing further how you can manage the situation? Feel free to reach us at firstname.lastname@example.org or message us on Linkedin. We’re always open to hearing your thoughts.
Marta is a content strategist and digital marketer with 8 years of experience turning ideas into prose for media agencies, online travel, e-commerce, and ad-tech companies.
At Remerge, she works closely with our APAC teams to create engaging content about app retargeting and mobile marketing. When she isn’t in our Singapore office, she is reviewing books and practicing Aikido.
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