During the last couple of years we have seen a steady increase in companies exploring the Smartphone/Tablet channel developing Applications in order to increase the revenues and visibility among the potential customers. Additionally it helps to enhance the customer service. This doesn’t only apply for big brands, but also small and midsize businesses. According to Comscore, Americans spend an average of 162minutes on his/her mobile device every day, with the majority of the time being on Applications.

mobile app

As mentioned above, the Mobile App contributes to your brand awareness and recognition. Furthermore, it doesn’t matter which sector you find yourself in, your customers need an easy way to reach you. By having an App you help to create a Direct Marketing Channel to your customers. Through push notifications you are getting as close as possible to a direct interaction with the customer.

As you can see from the table it isn’t enough to only have your landing page mobile optimized as most people rarely use their browser anymore, and this is something that Advertisers has started to understand when promoting their product. Instead of generating traffic to their Landing page, they are now pushing all traffic to their Applications. It’s more convenient for the customer.

From a performance based marketing point of view, when buying traffic to your Application its important to make a set of requirements that the user would need to do in order to be counted as a valid conversion. Depending on the traffic type this will differ. In the end the objective is always that the customer actively starts using the Application.

Mobile apps

In order to have a win-win collaboration where both Advertiser and Publisher are happy its vital to distinguish the two overall traffic types; Incentivized and non-incentivized traffic. For non-incentivized traffic its, in most cases, enough to only have install + open the Application as the user voluntarily take the campaign of its own interest and start using the Application. The possibility of the user becoming an active user is high. On the other side for incentivized traffic, the retention rate is much lower and the probability of the user actually deleting the Application after opening it once is very high. Therefore, in order to prevent this, Advertisers usually adds more steps that’s required before identifying a conversion as valid. An example of this is that the users need to install the application and then go on to complete the registration of his/her profile inside the Application.

As a compensation of adding more steps before the conversions are valid, the Advertiser tend to offer a higher payout for these campaigns. In the end earning more per conversion will make up for the lower Conversion Rate that the Publisher could experience. In some cases we have seen that Advertisers are making it too complex/time consuming for the user to complete the required steps and they end up dropping out before actually starting to use the Application. An example of this is Magazine Apps where you would need to download the application, complete the registration and choose the annual subscription. The other subscriptions didn’t count. Even though the payout is high for these kind of offers, the Conversion Rate is simply too low and Publishers wont continue running them over a longer period of time.

As a conclusion, for it to be profitable for both parties, we would recommend to keep the required steps at a minimum for non-incentivized traffic, as the user isn’t looking to get something in return when downloading the Application. He/she is genuinely interested in using it. For incentivized traffic the Advertiser should take it one more step further to “force” the user to spend time inside the Application, as that will help to increase the retention rate in the end.