When it comes to knowing their mobile customers, many companies have a bad case of tunnel vision. And it’s a problem that costs them a lot of money.
Retailers, game companies, and publishers can see a lot about what a customer is doing when they’re inside their mobile application.
But that’s only a small slice of the customer’s activity. These companies have no idea of what the customer does when they’re outside the app. Once they leave, what do they do, where do they go, what do they buy or play or read?
The apps on their phone reveal a lot about a person
Companies can use that information to learn a great deal about that customer’s interests and behavior.
More importantly, not knowing what other apps are on your customer’s phone can be very costly.
You could be paying too much to acquire customers
If you don’t know what your mobile users are doing outside your app, you could be paying much more to acquire new users than you should be. If you’re paying $2, $3, maybe even $4 for each new user acquired from outside sources, you could be wasting a lot of money.
You could be acquiring these new users much less expensively. You could save yourself from writing a large check every month to Facebook, Twitter, Fiksu or another data broker.
How? You need to know more about your users and what apps they were running on their phones.
Run the numbers to prove it
Consider an example to compare the costs of acquiring a new customer through two different options:
Option 1: If you’re a gaming company looking to acquire new customers, you could buy those customers from an outside broker. For the sake of illustration, assume you pay a $3 cost per install (CPI).
Making some reasonable assumptions about conversions, a campaign targeting 1 million users might yield 15,000 new users. That means you’ll be paying the outside broker $45,000.
Option 2: But there’s a second option. Instead of buying users for your game from a third party data broker, consider acquiring them from your own existing users. If you could discover what other games are on their mobile devices, you could identify likely users for the new game. You could then cross-promote to these users through targeted ads or promotions, a much less expensive way to reach them.
Seeing all the apps on a device lets you target customers more cost-effectively
Estimate that is would cost $3 per thousand (CPM) to deliver an ad to those targeted users. To reach 1 million users would cost $3000. That’s a fraction of the $45,000 that you would have paid an outside broker for those new users.
In other words, you’re paying 15 times more for new users than you should be.
Plug in your own numbers. See for yourself how much you’re overpaying.
Purchase new customers from outside broker
Acquire new customers by targeting existing users based on their interests
|Number of targets||1,000,000||1,000,000|
|% click through||5%||5%|
|Conversions to new customer||15,000||15,000|
|Cost per customer||$3.00 CPI||$0.003 ($3 CPM)|
Customers using your mobile app reveal a lot about themselves.
They generate data about what they do when they’re inside your app: where they go, what they look at, how long they stay, etc.
Plus they generate data on what they do when they’re outside your app: what other apps are installed on their mobile device, are those apps complementary or competitors, are they used more often than your app, etc.
There are 1.19 billion reasons for mobile advertisers to like Facebook. That’s how many mobile monthly active users are on Facebook.
Almost one of every four mobile device users on Earth is active on Facebook. Somewhere in that vast population, almost any brand should be able to find their target audience.
Context on Consumer behavior outside of the Facebook app is needed
But size isn’t everything. No doubt, Facebook and others can provide mobile advertisers access to lots of users.
Unfortunately, most publishers and advertisers don’t know much about their mobile customers.
Once customers leave the company’s own mobile app, they’re invisible.
There’s a whole lot of information on customers’ mobile devices that can reveal their interests and behaviors… but most companies aren’t seeing it.
“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
John Wanamaker was lamenting the budget his retail store wasted on newspaper advertising in the early 20th century.
Unfortunately, his complaint still holds true in the early 21st century: Retailers waste a lot of the money they spend on mobile advertising.
Though we should have 100 years’ more experience and more sophisticated techniques to make more informed decisions, many of the decisions retailer marketers make about where to spend money on mobile advertising are still based on guesswork.
Mobile advertising is still based on guesswork
Actionable information on how, where and when to target mobile advertising is imprecise. In many ways, retailers are completely in the dark about their mobile customers. Or at best, they are making guesses:
With accurate answers to questions like these, retailers could attract customers much more effectively. In other words, they can stop
wasting money advertising in the wrong places at the wrong time with the wrong offer.
A better way to understand mobile customers, target more effectively
Fortunately, newer technology can give retailers the answers they need. By analyzing information collected directly from their customers’ smartphones and tablets, retailers can better understand their interests and behavior.
And they can act on that information:
Smarter ad placement: Retailers can place their ads more precisely. For example, if they see that their customers are regular users of the New York Times app, the retailer can spend more on ad placements on the New York Times app. And if they see that the customer never uses their ESPN app, they can reduce their spending on those placements.
More timely promotions: Retailers can present promotions to customers when and where they are most likely to be shopping.
For example, if they could predict that a customer will be using their device between 8 and 9 AM en route from home to work, they could push ads at that time. And they can minimize their spend on ads delivered outside of that heavy usage time slot.
More appealing offers: Retailers can present more appealing offers to their mobile customers when they better understand what other apps are sitting on the mobile device and how often they are used.
For example, if they knew that a large number of their customers frequently used a competitor’s app, the retailer could push out an offer to honor any of the competitor’s discount coupons. And the retailer could avoid pushing this offer out to customers that don’t have the competitors app installed.
Technology to bring mobile advertising into the 21st century
Solutions that allow retailers to gather and analyze this kind of data on mobile customers – information they can use to advertise more effectively – are available from companies like Marlin Mobile. Accurate information on mobile users’ interests and behavior can help them better segment their customers and be smarter about where they spend their advertising budget.
After all, maxims about the wasteful ad spending from 100 years ago should not still apply in the 21st century.
Faithful readers of this blog have gotten this message loud & clear: a successful mobile website or application needs speed.
To satisfy your customers, readers & advertisers, your mobile site needs to load and run quickly and consistently across multiple devices, operating systems, carriers and locations. A slow site loses customers and readers.
Who shares the real estate with you?
But a successful mobile site depends on more than your performance. It also depends on your site’s neighbors.
Your mobile site or app sits cheek by jowl with lots of other mobile sites and apps on a user’s smartphone or tablet. And those other sites that share that small bit of real estate matter to the success of your site.
A simple example can illustrate this painful truth:
If you’re the one and only airline app sitting on a user’s mobile device, the chances are pretty good that you’ll get tapped when that user needs to make travel plans.
But if you’re one of two dozen travel-related apps sprinkled around the screen, your chances of a visit aren’t quite so good.
The same principal applies if your mobile site is about sports, news, shopping, games, whatever. The more crowded your neighborhood, the more difficult it is to attract attention.
So while you’re looking at your own site – measuring speed, installs/uninstalls, traffic, sales, etc. – it makes sense to look at the sites around yours as well.
You can learn a lot from the neighbors
With the proper tools, you can figure out if they’re competitors to you, or if they offer complementary services. Does your airline site sit next to other airline sites, or is to sitting amongst sites on European vacation destinations?
By checking out the neighboring apps, you can learn more about the people who have installed your own app. If your app serves up sports information, seeing that a user has the New York Yankees app sitting next to yours on their phone, tells you something useful about your customer’s specific interests.
Or if you sell sporting goods, that kind of information would be useful in presenting attractive offers… let’s say for baseball jerseys and caps with the Yankees logo.
Here’s the bottom line: Knowing how well your own mobile app and website is performing is essential. But it’s not all you need to know. Understanding the neighborhood – what other apps and sites are sitting next to yours – is critical to your success as well.
It sits alongside lots of other mobile apps and sites on a user’s smartphone or tablet. Depending on where in the world the user lives, your app could be sharing that space with two or three dozen other apps.
Of course, companies should care about the performance of their own apps: How can we make them faster, easier to use, and more attractive?