Implementing performance-driven paid user acquisition

1. Overview

In Paid marketing channels, you explored paid user acquisition channels and the ad ecosystem with an advertiser perspective.

In this tutorial you’ll be exploring how to actually implement a paid in app user acquisition campaign with in app ads. Let's explore what you need to know so you can execute your own campaign.

In this tutorial you'll:

• Determine UA campaign objectives using past data

• Explore how to budget and determine how much to spend

• Identify how to get your creative going

• Consider how to target your players

• Explore how you can achieve your KPIs using campaign metrics

2. Ensure campaign foundation and utilize past data

Once you have decided to run a paid user acquisition campaign with in-app ads, you might be wondering how to get started.

Once you are ready to begin, use as much of your existing data as possible. For example, if your game is highly successful in Germany and that’s where most of your users come from and monetize from, then you probably want to focus on growing that user base before trying to expand into additional regions.

Also, try to find similar geographies (geos) to those that you know already work. To extend the previous example: if you want to expand your user base beyond Germany, you may decide to initially focus on expansion in Europe to see if that is where your audience is strongest, before expanding more broadly.

If you don’t have that much data to support your decisions, you can start the user acquisition campaign broadly. You can also explore different pricing strategy options, to see how low you can bid while still getting meaningful conversion volume.

Other than that, your mindset should be to test test test!

3. Budget and how to determine how much to spend

While there is not an exact formula to determine your starting budget, you should aim to spend enough to test at least one to three different ad partners, and gather enough installs and spend to evaluate the quality of the advertising inventory source or the app where your ad runs within.

Install volume

Having enough installs to evaluate quality is key. Ideally, you will be able to statistically analyze your data to evaluate the quality of the inventory source. Once you have enough installs from a source, you can monitor things such as return on ad spend, and player lifetime value (LTV), inclusive of retention and revenue.

As a rough guide, $10k/platform is a reasonable figure to start with.However, remember that the install volume is more important than your actual total spend.

Payback period

Another important metric to figure out is what your payback period is, meaning on average how long it takes for you to make back the money you spent.

This payback period will differ depending on the game. Typically more casual games should have a payback period of about 7 to 14 days, while more in-depth games can have a payback period of up to 90 days.

If you’re running a casual game and not making revenue back within 14 to 30 days, while you could be bidding too high, there could be something more fundamentally wrong with your monetization strategy.

4. Get your creative going

Creative refers to the ads you are going to run. There are a variety of different types of ad you can use to attract players.

Video ads

A common format that drives results for app downloads are video ads. You might want to experiment with different creative concepts or themes, and then try different variations within that theme.

For example, you might have a concept around dragons. The dragon would be the main theme of the ad creative but you could experiment with the following ad elements:

• Background colors

• Placement of text

• Use of icons

• Video lengths

Below is an example of a short video ad:

Source: Best Fiends

Playables

Another ad format gaining popularity is playables. Playables enable users to actually try out your game, and can lead to qualified downloads since the user knows exactly what they are getting once they click to download.

Below is a recording of a playable ad:

Source: Voodoo, Hole.io

Another ad format gaining popularity is playables. Playables enable users to actually try out your game and can lead to qualified downloads since the user knows exactly what they are getting once they click to download.

Additional ad formats

There are some additional ad formats available, including:

• Banners: Banner ads are a form of smaller sized graphical ads, typically including static images & text to convey a marketing message.
  
  

• Interstitials: Ads that appear between two content pages. These can be videos, static, or rich media. Sometimes interstitials can be referred to as non-rewarded or skippable ads.
  
  

• Native Ads: Native advertising is a form of paid media where the ad experience follows the natural form and function of the user experience in which it is placed.

End cards

End cards often accompany video ad placements. Typically, end cards are a static or animated image including the app icon and call to action (CTA) driving the user to the app store listing and providing an easy place for users to download.

5. Explore video creative tips

There are a range of resources available to help you develop engaging video creatives.

Explore best practice guidance

The Unity Ads network suggests a range of video best practices for you to consider.

Use machine learning to predict conversion

Using a bidding-based advertising platform driven by machine learning algorithm is often a good idea. The algorithm aims to predict the conversion likelihood of users (that is, how likely a user is to install a game when they see a particular ad), and optimizes their conversion by showing them the most suitable ad. If you use an assortment of creative, of varying lengths, the algorithm will get more data and a better chance to find the right creative to drive the best results for you.

Try the Creative Test App

Another helpful tool is Unity’s Creative Test App. You can use this app to test videos and playable ads, and ensure the ad units are compatible with the Unity Ads environment.

To use the video tester, follow these five steps:

1. Download the app for Android or for iOS.

2. Upload your video creative pack assets to the Acquire Dashboard.

3. Wait for the assets to be processed.

4. Scan the asset URLs from a QR code in the dashboard.

5. Initialize and view the ad content.

6. Include attribution

As you explored in Paid marketing channels, mobile attribution is the process of tracking where users learn about your app and connecting them to key actions in their journey towards becoming customers.

Advertising partners often require you to utilize attribution so you can attribute installs to their ad campaigns and ensure the payment loop is successfully completed.

Review the requirements for the different ad partners you are looking to test and utilize, and ensure you have either third party attribution, in-house attribution, or the attribution required by the ad partner to get started.

7. Target your players!

Now it’s time to determine what kind of targeting strategies you want to deploy in order to reach the right audience.

At the onset of your campaign, a good strategy is to limit your targeting tactics. This is often referred to as a run of network (RON) strategy. To start, you can use geography and/or platform (i.e., iOS or Android) as your initial targeting method. This way, you still reach a broad audience and can gather data to analyze and help you determine various optimizations.

Then once you’ve figured out the best optimizations for a specific country or platform, you can scale up by adding more countries and other targeting factors.

8. Target your players: Additional targeting

Some ad platforms will provide additional targeting variables you can manipulate. These can include targeting potential users by:

• Device type

• Operating system

• Internet connection

Some ad platforms also have options such as targeting based on demographic information, or the ability to create look-a-like audiences (where a potential user segment is created based on characteristics you define). For example, you want a segment based on a certain geographic region (geo), and other interest data. This segment can be expanded to reach additional users that fit those criteria.

No matter what kind of targeting you use, the more you break down your audience into different groups, and the more accurately you can define them, the better the ads you can serve them to convert them into new users.

However, by narrowing your pool, you’re limiting the scale of your reach. You’ll need to balance implementing the targeting strategies that get you the users you want with reaching a wide base of potential new users.

9. Target your players: Publisher-based targeting

Ad networks and platforms often provide targeting based on the publishers or apps that you are advertising within. For example, you might want to target a set of publishers. This is often referred to as whitelisting.

You can determine this list by utilizing either results from your RON campaign or past performance data. You might also want to block certain apps that you know do not bring you the quality of users you need. This is often referred to as blacklisting.

Scenario: You have been running a static CPI campaign with minimal targeting (geo, OS) for about 2 weeks. How could you utilize those results to refine your publishing targeting?

Answer: Analyze the campaign reporting to evaluate your return on ad spend metrics. If you see that certain apps are driving a high volume of quality installs, you might want to optimize your campaign set-up and target those apps specifically.

10. Target your players: Advanced targeting tools

In addition to app targeting (whitelisting) or app blocking (blacklisting), you can also utilize more granular pricing and targeting.

Granular source pricing

Ad partners might offer the ability to granularly price sources (apps where you are advertising). This strategy enables you to bid higher for sources you consider more valuable, while not bidding as much for those you find less valuable (but which still give you a profitable ROAS).

Post-install targeting

Another advanced targeting tool is referred to as post-install targeting or optimization, where you are not only looking for a user who will install your app/game but who will behave favourably after the install takes place. Depending on the partner, you might find solutions based on a user taking a specific action, watching ads, or spending in your game, or groups of users doing these actions.

Audience Pinpointer

Unity offers a product called Audience Pinpointer which uses machine learning to help you find the players most likely to have value beyond the app install. Using dynamic pricing, Audience Pinpointer allows you to bid more for predicted high-value users and less for easy to find users.

There are two models to choose from:

• Retention: Optimize for retention to acquire users who are more likely to play your game for 7 or more days.

• ROAS: Optimize for revenue to acquire users based on their predicted spend and maximize return on ad spend (ROAS) during their first 7 days in your game.

Audience Pinpointer uses dynamic pricing, so you can pay the right price across the entire user base. The dynamic pricing will adjust depending on the campaign model and your specific inputs, such as the ROAS goal you are hoping to achieve or maximum bid you are willing to pay as well as the predicted value of the user.

For maximum impact, we recommend running revenue-optimized (ROAS) campaigns alongside retention-optimized campaigns and standard CPI campaigns that optimize for the best install conversion rates.

11. Campaign metrics: Key Performance Indicators

As you reviewed in a Deeper dive to user acquisition, campaign metrics are vital to understanding how effective your spend is and if you are getting the right return on your investment.

One important type of campaign metric is Key Performance Indicators.

Key Performance Indicators:

Payback window

How long it takes to recoup your marketing spend. If you spend $5 to acquire a user, how much time does it take you to make back that $5 from the user? Depending on how long that is (7 days, 14 days, 30 days), use that amount of time to let your data mature before making major changes.

ROAS:

Return On Advertisement Spending. For example, if you spend $1,000 on advertising within a month and that campaign leads to $5,000 in revenue, that would give you an ROAS of 5:1, or $5. For every $1 you spend, you can generate $5.

Takeaway: It’s important to also understand your payback period, so you know how long you can expect your return on investment to pay off and ensure that amount of time passes before jumping to make changes.

Retention (D1, D3, D7)

The number of unique users who came back to your app on the next day of installing/opening the app, three days, 7 days etc.

Takeaway: Retention not only can help you relate to revenue, this metric can be a key indicator of your game play and player progression.

Lifetime Value (LTV)

Lifetime Value is the amount an average player will spend over their entire time with a game. This figure is very directly linked to your retention, because the longer a player stays, the more money they put into your game, be it through IAP or viewing ads.

Takeaway: Acquiring a new user is just the first step. There are many factors that go into making sure the user continues to be engaged with the game and continue session after session.

How to calculate: total days a player spends in a game, multiplied by revenue for day. For example if a player stayed for 30 days and spent an average of $0.50 per day, their LTV will be $15.

12. Campaign metrics: Health metrics

These metrics are provided by the ad partner reporting and in some cases dashboards.

Pricing

This is how much you are willing to pay per user whether that is per install, per click, per action or per impression.

• CPI: Cost per install

• CPC: Cost per click

• CPA or CPE: Cost per action or Cost per engagement

• CPM: Cost per mille (cost per thousand impressions)

Pricing model takeaway: You can flex this number up or down depending on the volume and quality of users you are getting in return to help manage the return on your ad spend

Impression or start

A single ad that appears on a web page/in app when the page arrives on the viewer's display

Takeaway: Impressions can help you understand scale. The more impressions an ad network/platform can serve, the more likely users are to see and engage with your ad

IPM

Number of installs per thousand impressions.

Takeaway: IPM can help show the full picture of the user journey when targeting new users. Additionally, a high IPM can impact the bidding process, moving the rank of a given ad campaign towards the top due to the high performance of a creative, ad, and campaign in generating installs. In turn, the ad receives more traffic and a higher volume of impressions, further boosting install rate.

CTR

Click through rate (clicks divided by impressions)

Takeaway: CTR relates to installs. This is the percentage rate of users who saw your ad and then clicked on it. The more users who click on your ads, the more users who are taken through the journey to ultimately install the game.

CVR

Conversion rate (Impression to install conversion)

Takeaway: CVR can help you understand the volume of installs you get based on impressions served. If your conversion rate is poor, then you may not be able to scale. In this case, many users might be seeing the ad but not choosing to install the game. You can raise the CPI (cost per install) that you are willing to pay, but then it might be too expensive to acquire those users based on the return you will make. If your conversion rate is high, then you know you can pay a lower price to get more users and still be competitive.

eCPM

Effective cost per mille or cost per thousand impressions. This metric can help determine how competitive an ad placement is. Calculating the eCPM in this capacity is eCPM = (CPI x CVR) x 1,000.)

Takeaway: Understanding this metric can help you evaluate how competitive your ads are. The higher the eCPM means the ad is more likely to win and you might be able to manipulate the cost you are willing to pay, or make improvements to the creative to improve CVR.

13. Campaign metrics: User and revenue metrics

These metrics relate to the revenue generated by your users.

ARPDAU

Average Revenue Per Daily Active User (daily revenue divided by the number of active users)

Takeway: This metric helps you understand how much revenue each of your players generate daily. The revenue earned will depend on your monetization strategy (ads, IAP or a combination of both). This metric looks at all users, not just those who make purchases via IAP. This metric can be helpful because it not only helps you predict future revenue earnings, it can also help to evaluate your marketing efforts.

If you are acquiring new users and the ARPDAU remains consistent or increases then it’s an indicator that the users you are acquiring are adding to your revenue. If your ARPDAU decreases and you are actively paying to acquire new users it could be a sign that the quality of users you are acquiring is not what you expected or need to continue growth.

ARPU

Average Revenue Per User (lifetime revenue/lifetime users)

Takeway: Similar to ARPDAU, this metric helps give an overall picture to the health of your player base and revenue in a longer term view rather than just daily

ARPPU

Average Revenue Per Paying User

Takeaway: This can help you understand your loyal, IAP paying customers

14. Ask the experts!

Would you like to hear more from an expert? Watch Cathal and Illya, both Unity monetization experts, discuss this question:

1. If we’re paying for ads to drive people to our games, then advertise other games to these users to create revenue how do we make more money than we spend? Is it a zero sum game in the end?
   

15. Using metrics to evaluate your ads

As you run your campaigns, you need to pay attention to the scale and quality of your installs. To understand the volume of installs you are generating, an important metric to monitor is the number of installs you get based on impressions served – the CVR. If your conversion rate is poor, then you may not be able to scale. In this case, many users might be seeing the ad but not choosing to install the game.

You can raise the CPI (cost per install) that you are willing to pay, but then it might be too expensive to acquire those users based on the return you will make. If your conversion rate is high, then you know you can pay a lower price to get more users and still be competitive.

With regard to understanding the quality of these users and the value the users bring after the app is downloaded, you will focus on the post-install metrics, such as:

• Retention

• Return on ad spend

The return you make is based on your specific monetization offerings, such as the combination of ads and in-app purchase opportunities within your game.

A key part of performance advertising is testing out multiple channels and partners. While it can be complicated to manage multiple partners at once, you will likely need to try out various tactics before finding what works.

That is why it is critical to focus on post-install metrics and understanding the return on ad spend for acquiring these users. That way, you will be focusing on making optimizations and tweaking your strategy to ensure you are not spending money without a return.

16. Summary

In this tutorial, you have:

• Determined UA campaign objectives using past data

• Explored how to budget and determine how much to spend

• Identified how to get your creative going

• Considered how to target your players

• Explored how you can achieve your KPIs using campaign metrics

• Reflected on how developers can make more money than they spend

In the next tutorial you’ll consolidate your user acquisition knowledge by taking a quiz. After that you will have completed the Acquiring your users project of this course. Well done so far!

After you complete the quiz you will start the Strategizing for success project where you will create, refine and consolidate your strategy.

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