Mobile Marketing discusses the role of the partnership channel in driving mobile app installs and engagement with Florian Gramshammer, MD EMEA, Impact.
Mobile Marketing: So Florian, what are some of the issues you see with app marketing today?
Florian Gramshammer: One of the biggest issues is retention. According to eMarketer, on average, 87 percent of an app’s new users will stop using the app within seven days. These are people you have paid to acquire, who are now providing you with no value at all – it’s a major problem. Added to this, there’s a lack of diversified sources to acquire new users, with the vast majority of ad spend in the user acquisition (UA) space going to Facebook and Google; leaving CPI (Cost Per Install) networks to soak up what remains of the advertiser’s small experimental budget.
MM: But if Facebook and Google are working, is it really a problem?
Florian: It may be working today, but the question to ask is: how long will it continue working, and is it working as well as it could. It’s a bit like having a diversified stock portfolio – diversified UA sources would be a smarter approach. The UA industry is also heavily reliant on in-app banner ads, to the point where people will pay money for an app they could get for free so they don’t have to look at the ads any more.
MM: So what’s your answer to these issues?
Florian: We believe partnerships are an excellent new source for UA. They let you operate in a much more native way to tell people about your app and convince them to download it. It’s a very open space and there’s a lot of opportunity if you look beyond the same tired banner ad inventory.
The other really cool thing about partnerships is that you don’t have to pay for an install. This is a big issue with a lot of CPI marketing. People know that churn is a concern so they have built the churn numbers into the price they will pay for their install.
You’re forced to guess and come up with what your risk tolerance is, whereas with a partnership you can say you’re not going to pay anything for an install, but you will pay when someone completes the first level of your game, or deposits funds or spends $5 in your app, or whatever desired outcome you specify.
MM: So can you give us an example of how it works in practice?
Florian: Sure, look at Ticketmaster’s partnership with Spotify. So you’re on Spotify looking at an artist and you see a tab to say that the artist you are looking at is playing a gig in your area, and with an invitation to buy tickets via Ticketmaster. So you buy the tickets and Spotify gets a commission.
Ultimately, this is nothing like a banner ad as it’s much more of a native experience where you are showing an interest in that artist, so the invitation to buy a ticket to see them live is contextual, relevant and useful for the user; as opposed to the interruptive and intrusive experience of a banner ad. This is the way that most of the relationships we power work – there’s usually a performance aspect involved.
Another example is the shopping rewards app Drop. They started a partnership programme from scratch and have told us they are getting 15 percent of their total installs from partnerships. And they don’t pay until a user uses their reward platform start to finish.
MM: So why do you believe this is so much more effective than the traditional paid media approach?
Florian: The first aspect is the native part. We’ve seen over several years now that people do not like ads, and that they are not performing as well as they used to due to banner blindness. Consumers in general don’t trust advertising, so the fact that partnerships tap into the authenticity of the existing company that already has an audience that they can show your offers and services to in a native, contextual way is very powerful.
Specifically in the UA space, if you think of a retail eCommerce brand. They will typically have a team that gets app users and a team that gets sales, but if done right you can get both at once by spending a few dollars for the install and then offering a bigger payout on a purchase.
MM: And what’s Impact’s role in all this?
Florian: We provide the software that acts as the backbone to that relationship. We help brands and partners and publishers to find each other, so we enable these relationships and then, using a single link, route and track between the web and app and app-to-app to make sure people get credit for their role in the path to purchase. We also provide insights to enable the brands to see which partners are delivering the best results and the most valuable installs. And of course we power the contracting functionality and the payouts, enabling the whole thing so the partners are not jumping round several different platforms.
On the attribution side, a lot of people like last-click, but on top of that, we have to figure out how to incentivise top of funnel partners so that they keep promoting even if they are left out of last-click attribution, so we provide the data and tools to enable advertisers to understand if people are being left out and to compensate them even for sales where they do not get the last click. It puts the power back in advertisers’ hands.
MM: And what does the process of matching partners up look like?
Florian: It works in a couple of ways; we have a marketplace of pre-integrated partners, but in addition to that, our Discovery tool enables companies to search among millions of potential partnerships. It crawls the internet looking for everyone who has x number of followers on Instagram, or all websites with an Alexa ranking over x, apps with a certain number of users, and other category and quality filters. It makes the whole process of finding the right partners much faster and more seamless.