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Importance of Running Retargeting Along With UA

Posted on November 28, 2019

As a mobile marketer, you know about retargeting and how it works, but you might not be yet sold on the idea of including it in your app strategy at an early stage. You might be more comfortable relying on user acquisition campaigns. Investing in a strong UA campaign makes perfect sense, but it might not be enough to achieve strong user retention, because around 80% of (acquired) users will drop out after Day 1.

Myth:

  • I don’t want to target my newly acquired users because they are most likely to convert organically. Retargeting efforts are only worth it at a later stage.

Reality:

  • User acquisition needs to be supported by a well-thought retargeting strategy from the start - to increase engagement and activate your audience.

Here we show why you should plan your retargeting campaigns sooner rather than later. We will explain why app retargeting is worth the investment and how it helps you achieve your long term goals.

How can you benefit from retargeting alongside with your user acquisition campaigns?

Short answer:

Retargeting gives marketers an unparalleled audience targeting, at scale. Retargeting is useful to drive traffic after app install and to keep users actively engaged for longer. Retargeting acts as a catalyst to bring back users that already use your app for a while and turn them into paying users: users that are willing to purchase, unlock new levels or try a newly release app feature.

When it comes to app growth, it all starts with user acquisition. During the app launch stage, naturally, the focus will fall onto boosting installs and getting new users onboard. App marketers want to build a large user base to optimize ad spend towards ROI and will be looking at costs per install. However, is that all you should be focusing on when it comes to your mobile strategy? We advise against it.

A well developed mobile strategy that aims to achieve exponential and consistent growth needs to consider retargeting from an early start. Boosting user numbers is a must, but app businesses should also be checking in on customers as time passes to make sure they are still engaged with the app. The ultimate focus should be on improving the lifetime value of the users. To improve the LTV of app users, a constant and planned retargeting effort will be the best ally in the job.

Once new users install and register, it is time to think about how to build a long term retargeting strategy to keep them in the app.

Habit drives retention

One might assume that once users install an app, they will use it and use it often. One might also think that, in time, they will even start purchasing whatever offers an app presents. However, the harsh truth is that most customers will download and register onto your app and uninstall it the next day or forget about it.

Average app retention rates after install (out of 30 days) (Source)

Screenshot 2019-11-28 at 2.42.36 PM

No business has access to unlimited users, and, according to previous benchmark reports, out of the new users that you acquire, around 89% will not engage after a week of installing your app. That is why it is so important to complement your acquisition efforts with strong and consistent retargeting campaigns. Let’s explore this theme in more detail.

Different verticals retain differently.

Each app should confirm its user base behavior. Data tell us that eCommerce apps only retain around 25% of its user base by Day 1. Travel and Food Delivery apps show similar behavior by retaining only 20% and 16% of its users, respectively, by Day 1.

So the question remains: how to prevent this behavior and reduce the churn rate? Retargeting can be the tool you need in your arsenal to improve retention in your app.

Reasons to consider retargeting along with your UA campaigns

  • RT campaigns have 152% higher engagement rates on average than new user acquisition campaigns.
  • Retargeted users tend to make more purchases when compared with newly acquired users.
  • Retention is higher for retargeted users versus non-retargeted new users during the first week after install.

1. Retargeting can help with app retention

We know that a user that installs your app has better chances of being monetized and stay in the app if retargeted. Studies show that there is a significant difference between retargeting and acquisition results when we look at both performances per day and per week, across different metrics.

Retention rates turn out to be slightly higher for retargeted users, especially during the first week. Although we can notice an increase in sessions from newly acquired users during the early days after install, the engagement rates of retargeted users are better as they trigger more events: using more app features and purchasing, for example.

Allocating a part of your marketing spending to retargeting campaigns along with your user acquisition will decrease the user churn rate.

2. Retargeting can help with engagement

Retargeted users show higher engagement when compared with an acquired user not yet retargeted, through their lifetime. We can observe the same trend even after 30 days post-install. This is due partially to the retargeted users being already familiar and experienced in using the app, and therefore more likely to engage.

A good indicator of engagement is the number of sessions, particularly when it comes to Social and Entertainment apps. Retargeting is an effective way to get to the users with the intent of getting them in the app several times a day for checking messages, listen to new songs, or whatever is the desired action in a particular app.

Also, retargeting campaigns allow a marketer to learn more about their target users. Campaigns allow gathering more insights about the target audience, insights that can be used to create customized ads. And personalization does matter! When users see an advertisement with an offering that feels made for them, they are more likely to engage.

3. Retargeting can get your loyal users to spend more

Are you actively re-engaging your most active and high paying users? Your retargeted users are more engaged and have a stronger sense of brand recall. If an app business focuses its efforts on the users that have shown user intent, it has better chances to get them to convert and to purchase.

When it comes to Food Delivery apps, this is a particularly relevant aim: because of the nature of the business, users might not use the app multiple times a day; therefore, the number of sessions/day might not be a relevant metric to track. What retargeting can assist with is to bring users back to complete a purchase whenever they do visit a Food Delivery app. Ultimately, retargeting enables app marketers to lift revenue through engagement.

4. Retargeting can help lower your overall ad spend

Retargeted users tend to spend more, which also means that they engage with app offers at a lower cost. Data show that marketers need to spend an average of $76.40 to acquire high-value users that are willing to make app purchases. Retargeting active users while they are still interested in the app is more effective, and it is possible at a lower cost.

Prioritizing your retargeting campaigns before your users start lapsing will allow you to save costs and increase their lifetime value.

5. Retargeting will allow you to perfect your audience targeting

As mentioned, running retargeting campaigns will provide a deeper understanding of the behavior of a user base. Plan and run retargeting campaigns, look at the results, optimize, and gather stronger insights. These insights are valuable and crucial to identify the users who have shown interest in the app offerings, instead of targeting as many users as possible just for the sake of it.

With retargeting, app marketers can identify users that are prone to engage, spend more, and ultimately be more regular users.

Advantages of a retargeting strategy:

  • More accurate target audience
  • Better engagement
  • Higher conversion rates
  • Better iROAS
  • Higher brand equity

In summary,

User acquisition has a narrow focus on the early stage of a user’s lifetime cycle. An app retargeting strategy supports and complements UA efforts by focusing on improving the LTV. Consequently, it brings long term benefits that justify the investment made in the campaign as it provides through creating brand equity, engagement, and, subsequently, incremental revenues.

Read more about app retargeting strategy:

Reach us at hello@remerge.io to discuss how we can add value to your app business.

Marta Gaspar

Marta Gaspar

Content Marketing Manager APAC | Remerge

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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