Traffic situation on the mobile market

The price of traffic has been high for a long time. In 2016, it has only become higher. This is primarily due to three factors.

competition of traffic sources with each other;
competition of big brands with companies represented only on the mobile market;
market development.

By the latter, I mean the following: the big players raked out most of the audience that was interested in their product. Then they can grow mainly only due to new devices, and their number is not growing so fast — Apple recently reported a prolonged decline in iPhone sales for the first time since 2007.

In the current situation, the logical step for large players is to work with an existing user base, re—attracting them. This is called retargeting.

When retargeting is needed

When you buy users for 10 rubles, retargeting is not necessary. It is cheaper to attract new users. But the user’s price increases from purchase to purchase.

Imagine a pile of sand where the grains of sand are users. The higher the grains of sand, the lower the price of attraction. If you need a few users, we can only remove the top. But if we need a lot of users, then inevitably we need to dig deeper and take users more expensive. Starting from some point, the price of a new user becomes too high, and it turns out to be economically profitable to return old users.

Despite this, in many companies KPIs are still only for new users, so they don’t get around to retargeting. Many believe that the indicators are already growing.

This is self-deception.

Let’s imagine a simplified model. 1000 new users come to us every day. On the second day, it returns 2 times less, on the third day — 3 times less.

We see that the DAU is growing every day, but the growth rate of the DAU is slowing down. After 14 days, each new thousand users increases the DAU by less than 100. Half of the DAU is made up of users who have come in the last three days.

Any other indicator can be in place of the DAU: the number of orders, registrations, payments. The indicator is growing only due to new users. They don’t work with old users.

Problems with mobile retargeting

Why are the big players procrastinating and not switching to using retargeting? The most obvious explanation: inertia. But, of course, this is not all.

Setting up retargeting is not so easy. You need to unload the device IDs (IDFA and GAID) from the tracking system, select the right users from them, form audiences from them, then pour these audiences into the advertising system. Doing it manually is hard and long. As a rule, even such a simple task to unload ID cards according to some criterion is a whole task for a backend developer, which can be performed for several days.

In addition, unloading should be done regularly. If the user was sleeping, and then we returned him, and he bought something, he should no longer be sleeping. And, accordingly, we already want to work with him in a different way.

Advanced advertising systems such as Facebook offer setting up retargeting campaigns in semi-automatic mode, with auto-renewable segments. However, in practice, such a setup is usually also quite difficult to perform, and many give up this business.

Plus, the exhaust immediately turns out not to be very large. If we have a small number of IDs, and if we use only one grid, then the number of clicks will be incomparably small compared to how many can be obtained with broad targeting.

To achieve a really good volume, you need to work with all available sources, as well as choose a large number of IDs, working with different segments point by point.

If the user has an application installed, in the case of an advertising retargeted campaign, it should immediately open when clicking on the link (deep link). Ideally, a specific screen should open. But you also want all of this to be measured by a tracker. So, you need to wrap the deeplink through the tracking link AppsFlyer, Adjust or Tune.

In practice, such links do not work perfectly, they often open a store instead of an application. This happens due to the fact that when the tracker clicks, it needs to determine whether you have an application, and this does not always work.

Result: The campaign doesn’t work the way you need it to.

Another problem is the increased complexity of preparing an advertising retargeting campaign. Instead of standard targeting by gender, age and operating system, it is necessary to create complex user segments, given the huge number of options. For example, for a user who has not logged into the application for a very long time, you are ready to pay as for a new one or even more expensive. And you don’t want to spend much on a user who has been active recently. All this should be taken into account when forming targeting by segments.

Retargeting is still the future

The systems and procedures associated with retargeting today are far from ideal. Despite this, retargeting is a universal solution to the problems that the market is facing today.

As soon as the tools become more convenient, there will definitely be mass interest in retargeting from market participants. Following this, we expect an increase in retargeting budgets in mobile apps. And it may happen already in 2017.