In today's fast-paced digital world, mobile apps have become an essential part of everyday life for many people. From social media to online shopping and gaming, there's an app for almost everything.

As a result, mobile studios are investing heavily in user acquisition to tap into their audiences. However, creating a successful mobile business requires more than just a great app. You also need a solid marketing strategy to reach and engage your target audience. One of the most critical elements of this strategy is advertising.

Advertising plays a crucial role in driving user acquisition and engagement for mobile apps. It's also one of the biggest expenses for app developers and marketers. With increasing competition, the cost of advertising is going up, making it challenging to balance ad spending with user growth and engagement.

The goal is to reach a large number of potential users while still maintaining the highest return on investment (ROI). To achieve this, businesses must be strategic in their approach to advertising, focusing on the most effective channels while cutting back on those that are less effective.

In this article, we'll explore strategies for cutting ad budgets without sacrificing the quality of user acquisition campaigns.

Summary

1. Understand your Target Audience
2. Analyze your Ad Performance
3. Quality over Quantity
4. Remarketing
5. Optimizing Ad Creatives
6. Influencer Marketing
7. Monitor, Adjust & Iterate
8. Follow Best Practices

1. Understand Your Target Audience

When it comes to mobile apps and games, understanding your target audience is crucial for creating a successful ad campaign.

Knowing who your users are and what they need will help you determine the best channels for reaching them.

How to Understand your Target Audience?

Here are a few ways to better understand your target audience for these types of products:

1. Demographic Data: Collect information about your target audience's age, gender, location, education, and income level. This will give you a good idea of who your target audience is and what their interests and needs are.
2. User Behavior: Analyze the behavior of your current users. Look at how often they use your app, what features they engage with the most, and how long they spend using it. This information can help you tailor your ads to specific segments of your target audience.
3. Psychographic Data: Study the values, attitudes, and personality traits of your target audience. This information can help you create ads that resonate with your audience's values and lifestyle.
4. App Store Data: Take advantage of the data available in app store listings. Review the user reviews and ratings to get an understanding of what users like and dislike about similar apps.

By combining this information, you can create a profile of your target audience and use that information to create ads that are more likely to engage and convert them into paying users.

Monitoring your target audience

It is also important to continuously monitor and update your understanding of your target audience. As consumer behavior changes over time, your target audience may evolve, so it is essential to regularly reassess and adjust your strategies accordingly.

Once you have a good understanding of your target audience, it is important to segment them into different groups based on their behaviors and preferences. This allows you to create more personalized and relevant ads for each group, increasing their engagement and the chances of conversion.

By understanding your target audience, using tools to gather information, segmenting your audience, and continuously monitoring their behavior, you can create ads that effectively engage and convert your target audience.

This way, you will finally be able to adjust your ad campaigns to improve their performance over time.

2. Analyze your UA Ad Performance

Once you have a clear understanding of your target audience, it's time to analyze your ad performance.

Analyzing ad performance is crucial in determining the success of your advertising efforts. By monitoring key metrics such as click-through rates (CTR), conversion rates, cost per acquisition (CPA), and return on investment (ROI), you can get a clear picture of which ads are performing well and which ones are not.

One of the key benefits of analyzing ad performance is that it allows you to make data-driven decisions about your ad spend. By identifying which ads are generating the most engagement and conversions, you can optimize your ad budget to focus on those that are producing the best results. This helps you to cut your ad budget without sacrificing the quality of your user acquisition campaigns.

Understand your Metrics & Goals

To effectively analyze ad performance, it's important to have a clear understanding of your goals and metrics. This may involve setting up tracking and measurement systems that capture key performance indicators and provide you with detailed insights into your ad campaign.

Once you have a clear understanding of your ad performance, you can use this information to make informed decisions about your ad strategy. For example, if a particular ad is not generating the desired results, you can adjust its targeting, messaging, or creative elements to see if it improves performance.

By regularly analyzing ad performance, you can make data-driven decisions that optimize your ad budget, and ensure that your advertising efforts generate the best possible results.

3. Focus on Quality Over Quantity

When it comes to mobile advertising, sometimes quality is more important than quantity.

Focusing on quality over quantity in ad campaigns is crucial for cutting ad budgets without sacrificing the quality of your user acquisition campaigns. High-quality ads can be more effective in engaging users, even with a smaller ad budget.

Rather than spreading your advertising budget across multiple channels, focus on the channels providing the best results. This will help you maximize your ROI while also reducing your overall advertising costs.

This way, you can reduce your ad budget while still achieving the user growth and engagement you desire. Remember to prioritize relevance, clarity, and visual appeal when developing your ad campaign to ensure success.

4. Use Remarketing

Remarketing is a powerful tool for reaching users who have already shown an interest in your product or service.

Remarketing is a powerful technique that can help increase user engagement and retention in mobile apps and games. It involves reaching out to users who have already interacted with your app or game in some way, such as downloading it, making a purchase, or simply visiting the app store page. By targeting these users, you can improve the chances of retaining them as active users and encourage them to continue engaging with your app or game.

Push Notifications

One way to implement remarketing in mobile apps and games is through push notifications. Push notifications can remind users about the app or game and offer them incentives, such as rewards or exclusive content, to encourage them to re-engage.

For example, if a user hasn't used a mobile game for a few days, a push notification could be sent with a message like "Come back and play to earn a special prize."

Targeted Ads

Another way to use remarketing in mobile apps and games is through targeted ads. For example, if a user has abandoned an app or game mid-level, targeted ads could be displayed to remind them about the app and entice them to come back and complete the level. By using targeted ads, you can ensure that your advertising budget is being spent on users who are most likely to re-engage with your app or game.

Control your Timing

Another important aspect of remarketing in mobile apps and games is timing. It's important to send push notifications and remarketing ads at the right time, such as when a user is most likely to be engaged and have time to re-engage with your app or game. For example, if your app or game is primarily used during the evening, you may want to send push notifications or display ads in the evenings when users are more likely to have time to engage with your app.

By reaching out to users who have already shown interest in your app or game, you can improve the chances of retaining them as active users and encourage them to continue engaging with your app.

Through targeted ads, and timing your remarketing efforts effectively, you can maximize the impact of your remarketing efforts and achieve your goals for user engagement and retention.

5. Optimize Ad Creatives

Another way to maximize the impact of your advertising budget is by optimizing your ad creatives.

Optimizing ad creatives is an important aspect of cutting ad budgets without sacrificing your user acquisition campaigns. Ad creatives refer to the visual and text components of an advertisement. When these components are not optimized, it can result in low engagement, low conversion rates and, ultimately, low return on investment (ROI).

Steps to optimize ad creatives:

1. Test different ad formats - Experiment with different ad formats such as interstitials, banners, rewarded videos, and native ads to see which ones perform best for your target audience.
2. Use high-quality visuals - Ensure that your ad creatives have high-quality visuals that are eye-catching and relevant to the target audience.
3. Keep the messaging clear and concise - Keep the messaging in your ad creatives clear and concise so that it is easy for the target audience to understand and take action.
4. Use emotional appeals - Emotional appeals have been shown to be effective in boosting engagement and conversion rates. Consider incorporating emotional appeals in your ad creatives to tap into the emotional connection of your target audience.
5. Personalize the ad creatives - Personalizing the ad creatives by using the target audience's location, interests, or behavior can increase engagement and conversion rates.

By following these tips and continuously monitoring and adjusting the ad creatives, you can optimize your ad spend and achieve quality UA campaigns. Regular testing and optimization of ad creatives can help to increase the ROI on your ad budget and drive better results for your business.

6. Utilize Influencer Marketing

Influencer marketing is a cost-effective way to reach a large audience and drive user engagement. By partnering with influencers with a large following in your target market, you can leverage their reach to promote your app.

In other articles, we have already covered some tips for game studios that want to start working with influencers, and even some of the worst mistakes of influencer marketing from mobile game studios.

Influencer marketing can be a more cost-effective alternative to traditional advertising channels, especially if you choose influencers who are a good fit for your product or service.

7. Monitor, Adjust & Iterate

To ensure the best return on investment for ad spend, it's important to continuously monitor and adjust campaigns. Data-driven insights and analysis of ad performance can highlight areas for improvement and inform optimization decisions. This can involve tweaking targeting, testing different creatives, or making changes to bid strategy.

One key aspect of monitoring ad performance is tracking the right metrics. The most important metrics will vary depending on the goals of each campaign, but common metrics to consider include cost per acquisition, return on ad spend, and the user LTV (life time value).

Use the data to make informed decisions

Once data is collected, it's important to use it to make informed decisions.

 For example, if a particular targeting strategy is driving high acquisition costs, it may be time to try a different approach. On the other hand, if a creative element is performing particularly well, it may be wise to double down and create similar creative for other campaigns.

It's also important to avoid getting too fixated on short-term performance. User acquisition is just one piece of the puzzle – user retention and lifetime value are just as important, if not more so. As such, it's important to keep the bigger picture in mind and make decisions that will drive long-term success, even if they have a temporary impact on short-term performance.

Monitoring and adjusting ad campaigns is a crucial part of ensuring that ad budgets are being used effectively and efficiently. By tracking the right metrics, making informed decisions, and keeping the long-term in mind, businesses can cut ad budgets without sacrificing the quality of their user acquisition campaigns.

8. Cutting Ad Budgets while maintaining the quality of your UA Campaigns

In conclusion, mobile app and game studios must be strategic in their ad budget planning to ensure they are not sacrificing quality user growth.

By focusing on quality over quantity, optimizing ad creatives, analyzing ad performance, understanding the target audience, and utilizing remarketing techniques, mobile studios can effectively reduce ad spend while still acquiring high-value users.

Follow these best practices to attract high-quality users and keep them engaged, and you will find your way to long-term success and growth.

As the competition in the mobile app and game market continues to increase, it's important for developers to stay ahead of the curve and make informed decisions about their ad budget to ensure they are getting the best return on investment.

It is important to continuously monitor and adjust ad strategies to ensure optimal performance and return on investment. By taking a data-driven approach to advertising, mobile app, and game developers can successfully grow their user base without sacrificing their bottom line.

Written by Mobe Growth, app agency specializing in mobile marketing and user acquisition. Our goal is to help our clients achieve sustainable growth through effective and innovative user acquisition strategies, and to be at the forefront of the rapidly evolving mobile gaming market.

As a creator and/or developer of Mobile Games, you are likely familiar with eCPM, fill rate, Click-Through Rate, ARPDAU, and other metrics. Every publisher is eager to evaluate the growth of their audience and revenue. But what’s really behind each metric, and what's the best way to apply them? 

As management master Peter Drucker said, “What gets measured, gets managed.” Apply that to managing and optimizing your mobile ad revenue, and you’ll learn to measure what matters with the following on-point metrics.

Summary of this article:

• eCPM
• Fill Rate
• CTR: Click-Through Rate
• CAC: Customer Acquisition Cost
• ARPDAU: Average Revenue per Daily Active User

eCPM for a Mobile Game

This metric has been a part of the advertising world for ages. Effective cost per mille, or eCPM, is used to determine the cost of advertisements (whether they’re in newspapers, magazines, or mobile apps) per every one thousand impressions.

eCPM stands for Effective Cost per Mile (‘mile’ means ‘thousand’ in Latin). In other words, eCPM demonstrates what you earn per 1,000 impressions. The formula is the following:

How to Find eCPM & use it

To calculate eCPM, simply divide your ad revenue by the total number of impressions. Multiply this number by 1000.

eCPM = (Total Revenue / Total Impressions) x 1000

For example, let’s say your ad took in $1,870 in revenue and achieved 10,000 views in the allocated period of time. Divide $1,870 by 10,000 and you’ll have 0.187. Multiply this number by 1,000. This brings your eCPM to $187 (per every 1,000 impressions).

For this reason, eCPM becomes relevant in cases such as:

• Testing the performance of different ad formats, positions, and styles.
• Comparing monetization solutions on the market.

Comparing Ad Performances with eCPM

Since eCPM is a standard advertising metric, it usually comes to mind first when you need to compare the performance of ad networks. The higher eCPM is, the more you receive from an ad provider per thousand impressions. 

However, eCPM can be surprisingly unreliable. Let’s turn to math to see the catch.

Let’s say you have two ad networks: TomsNetwork and JerrysAds. Your eCPM comes out at $5 for TomsNetwork and $2 for JerrysAds. Who’s the winner? 

1. TomsNetwork 
2. JerrysAds 
3. Or do you need more data to evaluate?

Result (select the text to know the answer): If you picked C) you’re the real winner here!

There’s no way to answer this question accurately without analyzing the revenue and impressions together. 

To make the most informed decision, you have to look at the big picture. With TomsNetwork, you received $5 per 1000 impressions in a week’s span while JerrysAds brought you $20,000 per 10,000,000 impressions for the same time period.

Keep in mind that it’s only a comparative figure; the total number of ad impressions can influence it radically. 

With this example, we can see that sometimes eCPM says nothing about how exactly you earn money.

Consequently, eCPM isn’t particularly suitable for evaluating your provider’s performance or making a revenue forecast. In order to estimate the effectiveness of a given ad network, you’ll need to dive deeper into metrics and data.

Fill Rate in Mobile Games

Yes, we’re talking about fill rates again. This rate reveals how many of your requested impressions were actually shown to users.

Take time to compare eCPM along with fillrate. Fillrate calculates the rate your ad unit is filled in with provided ads. An ideal fillrate is 100%, meaning that all of the ads your app requested were delivered and displayed.

Seriously, this metric is vital to optimizing your mobile ad revenue. What’s the sense in throwing away impressions and earning potential?

Finding your Fill Rate & How to use it

To find the fill rate, divide the number of impressions displayed by the number requested. Multiply the resulting number by 100 to find the exact percentage.

Fill Rate = (Ad Impressions / Ad Requests) * 100

If you requested 1000 impressions by your ad network and only 800 were fulfilled, the fill rate would be a mediocre 80 percent. Remember—when it comes to fill-rates, keeping it at 100 is a must.

Therefore, fill rates will be very useful when: 

• Maximizing your ROI
• Maintaining inventory

Achieving a 100% Fill Rate

Unfortunately, 100% fillrate is difficult to achieve, because too many factors influence it, such as bad or lost connection, low phone battery, or a failed network. On the other hand, the fillrate shouldn’t be too low; if it goes down all of a sudden, check the app’s stability and your networks. Even if the eCPM is high, bad fillrate can be the reason for low revenue, so you must consider them together as demonstrated below.

Back to our two ad networks: TomsNetwork and JerrysAds.

TomsNetworks’ eCPM from the last month was $10, whereas the fillrate was 20%. On the other hand, JerrysAds’ eCPM equaled $3 with 90% fillrate.

Basically, it means that TomsNetwork displayed expensive ads once every five times, whereas JerrysAds delivered cheaper ads, but consistently. With an equal number of impressions, the second option is preferable.

Click-Through Rate (CTR)

Of course, you want users to see the ads. But what they do afterward matters. Do they stare off into the abyss, check their Facebook newsfeed, or actually click on the ad? Add the click-through rate to your metric arsenal, and you’ll be closer to finding out.

Understanding & calculating your CTR

This metric’s a breeze to solve for. Just divide the number of clicks by impressions, and you’ve got your CTR.

CTR = (Ad Clicks / Ad Impressions) * 100

You will find that Click-through Rate is good for:

• Studying your conversion rate
• Determining the performance of your CPC or CPA campaign
• Comparing CTRs for ads placed on the web vs. in-apps

Customer Acquisition Cost (CAC)

How much green do you have to put out to attract a new user? The CAC metric answers this question for you in a flash.

Customer acquisition cost is a key business metric that is commonly used alongside the customer lifetime value (LTV) metric to measure value generated by a new customer.

For more info on the Life-Time Value or LTV metric, check our extensive article on LTV for Mobile Games (Life-Time Value) - Successful UA Campaigns

Conquering your Customer Acquisition Cost

Understanding the cost to acquire new customers is crucial to analyzing marketing return on investment.

Thankfully, this one doesn’t require an advanced degree in mathematics. Take your marketing costs to obtain new users during a selected time period and divide them by the number of customers acquired.

CAC = Marketing Costs / Customers Acquired

Therefore, if you spent $800 on the acquisition and took in 750 new users, your CAC would come out to be $1.06.

Understanding its CAC provides a business with the ability to fully analyze the value per customer and improve its profit margins. It is commonly used when:

• Analyzing the performance of conversion tactics
• Maintaining profit by achieving a lifetime value for each customer higher than the acquisition cost.

Average Revenue Per Daily Active User (ARPDAU)

It’s impossible to discuss metrics without considering the most important factor of all: revenue. At the end of the day, apps are developed to make money for their owners, aren’t they? We suggest evaluating ad performance with ARPDAU or Average Revenue per Daily Active User. 

ARPDAU shows how much money you earn from a daily active user. The metric is based on the average number of daily active users, your core audience. 

ARPDAU vs ARPU: Knowing how much money is generating each user is important to make realistic budgets and figure out how to drive those revenue numbers up. With ARPU, you need to determine your total revenue for an allocated time period—a week, a month, galactic years… While ARPDAU, the time period is fixed to a day, and you only focus on active users during this 24h.

Mastering your ARPDAU

The ARPDAU formula is simple:

ARPDAU = Daily Revenue / Daily Active Users

Going back to the previous example, let’s imagine that you have two apps with 15.000 daily active users (DAU) each. App A works with TomsNetwork while App B is on board with JerrysAds. You’re curious to see how much revenue each active user is bringing in per app.

With TomsNetwork, App A has a daily revenue of $4,000 while AppB comes in at $4200. To determine your ARPDAU for each respective app, simply divide the revenue by your DAU. In this case, App A has an ARPDAU of .26 while App B is at. 28. The difference in these two figures might not appear as significant at first glance but after consideration, you can see that the potential impact on daily and overall revenue is huge.

ARPDAU helps estimate how changes influence monetization. By monitoring your ARPDAU, you can see how engagement campaigns, sales on in-app purchases, deliberate user segmentation, and the like, affect your revenue.

Use it to assess the effectiveness of personalization made via Segments or to determine if users are spending more (or less) than they were yesterday, last week, and so on. Over time, you can use the insights you glean from analyzing ARPDAU to build a more successful monetization strategy.

Other details of ARPDAU:

In all, ARPDAU can be used when:

• Determining upwards and downwards trends
• Budgeting ad-spend
• Predicting revenue generation

Also, it's important to remember that ARPDAU applies to networks delivering 1000 impressions, as well as to networks delivering 1,000,000 impressions.

This metric is neither influenced by users fluctuations nor by the number of impressions. Even if your audience multiplies tomorrow, ARPDAU will remain an objective indicator of your app’s revenue. For that very reason, always place ARPDAU at the forefront of your monetization strategy while keeping a close eye on eCPM and fill rate.

Checklist to Get started with these metrics

✅ Need a quick checklist to get started with better metrics analysis? We’ve got you covered:

1. Know your eCPM, but always compare it with revenue.
2. Check the fillrate of every ad network in your app.
3. Monitor your ARPDAU to keep track of the effect changes has on monetization results.