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School of Ad Tech: What is Mobile Retargeting and Why Your App Needs It

Welcome to the School of Ad Tech, an AppLift series where we demystify the basics of ad tech for our readers. Recent conversations in the mobile advertising industry have focused greatly around app retargeting. In this edition, we break down what mobile retargeting is and why your app needs it.

Modern-day performance marketing relies on buyer’s intent, and businesses that leverage this can hit the gold early on. User retention statistics prove that the importance of user re-engagement and retargeting is invaluable to the modern marketer to maximize value. Retargeting as a re-engagement technique can help convert user intent into conversions.

What is Retargeting

Retargeting isn’t a new concept to most advertisers. In the days of desktop, advertisers relied strictly on cookies to deliver tailored ad placement. On mobile apps, retargeting relies on device identifiers, especially IDFA and Google Ad IDs.

Mobile app-to-app retargeting is run through RTB Exchanges and SSPs by bidding programmatically and in real-time, targeting the users that previously engaged with the advertiser’s app or ads. Advertisers are able to track the user activity through their SDK integration. Afterwards, they send the user-level data to their retargeting partner of choice. Upon reception, the retargeting partner is able to build user segments, depending on the previous user activity, playing with the frequency, as well as recency of events. These user activities and retargeting actions are based on the KPIs defined by the advertiser for the user action: add an item in the cart, made a purchase, app not opened in the last X days, are some examples of user activity that should be tracked, analyzed and used to determine the retargeting strategy.

In simple terms, the mobile app retargeting process works like the image above. A user browses a product on your app and leaves the app without performing any action (for eg: purchase the product or complete a hotel booking). What retargeting does, then, is to show the user ads for the product they recently browsed to reignite user intent (via special offers, recommendations etc.) leading the user to click on the ad and get directed to the advertiser’s app through deep links. If the app is already installed on the user’s phone, the deep links take the user to the specific page within the app, or else the user is redirected to the App Store.

Retargeting for App Advertising Success

A well-defined organic and paid user acquisition strategy is key to successfully launch an app and grow a quality user base. But that is only one part of the puzzle. In general, maximizing the value of the existing customer base can significantly add value. Marketers who want to be successful need to extend beyond growing the customer base and take a holistic end-to-end view on customer acquisition and management. In this sense, a well-defined retargeting strategy can change the economics of mobile performance marketing (head over to this article to dive deeper into this topic). On an average, retargeting produces 3 times more sessions per dollar spent on traditional UA, driving roughly 48% higher click-through-rate. In fact, our research reveals that retargeted dormant users are 173% more likely to spend again.

Retargeting can be very helpful for app marketers, and especially eCommerce retailers, to bring users back to the product they searched for, and eventually drive conversions. With shopping cart abandonment rates as high as 69%, it is a huge pain point for those in mCommerce. By reminding users of a product, retargeting helps in not only steering customers back, but also building brand awareness through exposure. Game publishers, too, are retargeting mobile gamers on mobile devices.

Other benefits:

  • Through follow-ups on newly acquired users with highly targeted ads, UA efforts are profitable for longer, even with diminishing returns for new users
  • The return for the whole user base increases as all KPIs of monetization, retention and virality can be positively affected.
  • At some point, the incremental investment into retargeting an existing user is lower than that of acquiring a new user.

Summary

When employed wisely, retargeting can help retain loyal users and turn them into valuable customers for an app, improving an advertiser’s ROAS. Understand the funnel and start with segmenting users based on in-app events to create unique messaging. A solid understanding of the funnel will help you become aware of the KPIs and device a retargeting plan that fits perfectly with an overall marketing strategy. Work with a retargeting partner who can help you to device an effective retargeting strategy, based on the campaign KPIs.

Diksha is a Senior Content Marketing Manager at AppLift and is based out of our Bangalore office. When she is not behind her computer writing, you can find her binge watching her favorite movies, finding her happy place at a dance studio, and checking off places on her bucket list.
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