As the song goes: “Make new friends but keep the old. One is silver and the other’s gold.” What can we learn from this little tune? That existing users — like, old friends — are gold. In fact, existing users who engage with retargeted ads are 70% more likely to convert than users who don’t.
Since the dawn of the app store, mobile marketers have been obsessed with growth — but times are changing. With prices and inflation on the rise, retention is the new acquisition. In today’s competitive landscape, it’s critical that marketers shift their focus to long-term and cost-effective engagement strategies that drive ROI and retention, like app re-engagement strategies.
Below, we cover why you should be investing in retargeting in the age of enhanced data privacy.
From iOS 14.5 to now
Until the release of iOS 14.5 last year, Apple let advertisers use its device-level unique identifier — the IDFA — to serve relevant ads to users on iOS devices. Now, under Apple’s new ATT Framework, app advertisers can no longer rely on the IDFA to provide them with device-level data. Instead, users must consent to provide their data to advertisers through opt-in protocols. As you can imagine, when news of Apple’s restrictions first broke, the ad tech ecosystem lit up with panic. Data reports flooded the industry predicting opt-in rates could be as low as 1%.
What happened in reality?
More than a year later and opt-in rates have ended up being much higher than initial (panicked) predictions. According to recent data from Adjust, industry-wide opt-in rates are as high as 25%. For gaming apps, that rate averages 30%.
Interestingly, as more time passes, more users are opting-in. The industry-wide opt-in rate rose from 16% in May 2021 to 25% today. This shows that users are coming to understand the value of receiving more relevant advertising by opting in as time wears on and how creating app re-engagement strategies can help combat this.
The importance of contextual signals
But, what happens if users don’t opt-in to your app’s tracking under Apple’s ATT Framework? This is where contextual data signals and machine learning models have become increasingly valuable in the post-IDFA age.
In this time of enhanced data privacy, advertisers might not have open access to device ID data, but they can still use data like contextual signals to serve relevant ads to high-quality users.
What are contextual signals? They’re privacy-compliant data points that relay useful information about a user — such as their location, device type, and the environment in which an ad is shown (such as characteristics of the app or website). Using these signals, marketers can undertake contextual targeting — or, algorithmic matching of an ad to an impression that accurately assesses the probability of a user engaging. From here, they can determine the amount to bid for each impression and iterate their campaign spending over time.
New data, new ways to use it
Using machine learning, contextual signals can be combined with other metrics to create algorithmic models that predict the probability of future desired outcomes. For example, you can combine contextual signals with information about the number of interactions made with a specific ad element. With this information you can understand not only what parts of a creative is driving performance, but also predict the real time value of each ad impression with close to the same level of accuracy as device ID-powered advertising.
From here, new signals can be added to the model and iteratively tested against a holdout group. If the signal doesn’t improve performance, then it’s not used. But, if the signal has a positive impact, it’s added to the existing model and tested on live traffic.
Expanding your reach in the data privacy era
So, how can you expand your reach in the age of enhanced user privacy. Here are some ideas on where to start.
Invest in App Re-Engagement Strategies
As mentioned above, it’s time for marketers to stop underestimating the value of re-engagement. If you’re spending money on user acquisition campaigns you should also be investing in retargeting campaigns to keep the high-quality users your app acquires from the start. No longer is growth the standard of success for mobile apps anymore. In today’s data privacy-centric landscape, marketers should be optimizing their app re-engagement strategies towards driving positive ROI and retention to compete.
Partner with an Independent Programmatic DSP
To expand your reach in the data privacy age, partnering with trusted programmatic DSPs with historical first party data and custom model testing capabilities is key. As noted above, the capability to power and test models using contextual signals (versus deterministic signals from device IDs) will be critical to expanding your app’s reach in the post-IDFA age. A competitive DSP will be able to use contextual signals to drive probabilistic models that are the foundation of algorithmic bidding strategies. They will also be able to weight signals accordingly to drive ROAS-positive bidding models optimized to your app’s specific audience. This custom model building and testing is the new way to compete in the post-IDFA mobile landscape.
As the economy shifts and marketers take a renewed focus on ROI over growth, in today’s mobile market, retention is the new acquisition. To expand your app’s reach in the data privacy age, it’s critical that marketers invest in long-term and cost-effective engagement strategies that drive profitability and retention, like app re-engagement strategies.
- Opt-in rates are much higher than initially expected. According to recent data from Adjust, industry-wide opt-in rates are as high as 25%. For gaming apps, that rate averages 30%.
- Contextual signals offer solutions post-IDFA. Using contextual signals, marketers can build probabilistic models that place bids algorithmically to drive custom, ROAS-positive spending.
- Marketers should be investing in app re-engagement strategies through trusted partners. To expand your reach in the data privacy age, partnering with trusted programmatic DSP with historical first party data and custom model testing capabilities is key. These DSPs should support your app in not just acquiring new, high-quality users, but retargeting them from Day 1 of your UA campaigns.
Looking for a DSP to help you expand your reach?
In the data privacy era, working with an independent DSP like YouAppi is key to campaign success. Reach out to us for support planning your app re-engagement strategies in the Q4 holiday shopping season for maximum performance.