User Acquisition Costs

How To Decrease User Acquisition Costs With App Store Optimization

Anyone working with paid user acquisition campaigns already knows that the cost per user is rising. If you’re new to the app marketing world, the Fiksu Cost Per Install (CPI) Index will help you understand what’s happening. This chart provides a good indication of the CPI trend.

Cost per install index 2017

You want to drive CPI down. But what can you possibly do? A great solution is increasing the number of organic installs you get through better exposure on search rankings. How do you do that? Through App Store Optimization (ASO).

When you run an ad campaign and your app gets more installs, it will climb positions in the search results of keywords and keyphrases found in your app’s metadata. Therefore, you will get more exposure. With more exposure, comes more installs.

So, to actually understand how many users your money is really buying, we need to use eCPI, or effective Cost Per Install.

How To Calculate Your eCPI

  1. Record the number of daily installs your app has before the ad campaign. Without paid acquisition, all of your installs are coming organically, so these are known as your ‘pre-campaign installs’
  2. Run your campaign. Your app will experience drastic growth, which should be clear in your daily installs analytics.
  3. Record the number of daily installs that are occurring as a direct result of the ad campaign (‘paid acquisition installs’). Besides them, there’s a third group contributing with installs from the App Store search or Top Charts. ’Total installs’, if separated by source, would look like this:
  4. total installs = pre-campaign installs + paid acquisition installs + extra organic installs

  5. Subtract ‘pre-campaign installs’ from the number of total installs. Your money acquired the last two groups, “paid acquisition installs + extra organic installs”
  6. total installs – pre-campaign installs = paid acquisition installs + extra organic installs

  7. Finally, to calculate eCPI, divide the money spent on the campaign by the remaining number of daily installs. You already have what you need to discover how much each acquired install really costs:
  8. eCPI = money spent on the campaign / (paid acquisition installs + extra organic installs)

    For instance, imagine you acquire 10,000 installs at $1.50 per install (CPI) on a 1-day campaign. Before the campaign, the app had 5,000 installs per day, and after the campaign begins, we have 23,000 total installs per day. This is how we’d calculate our eCPI:

    • pre-campaign installs = 5,000
    • total installs = 23,000
    • paid acquisition installs = 10,000
    • money spent on the campaign = 10,000 installs x $1.50 CPI= $15,000

    Now, we need to isolate the number of installs that were a direct result of our $15,000:

    • 23,000 (total installs) = 5,000 (pre-campaign installs) + 10,000 (paid acquisition installs) + extra organic installs
    • 23,000-15,000 = 8,000 extra organic installs

    Now that we know the number of extra organic installs, we can calculate eCPI.

    • eCPI = money spent on the campaign / (paid acquisition installs + extra organic installs from paid acquisition)
    • eCPI = $15,000 / (10,000 paid installs + 8,000 extra organic installs)
    • eCPI = $15,000 / 18,000
    • eCPI = $0.83

    Reducing the User Acquisition Cost

    As I mentioned before, it’s tough to drive the CPI down. But, looking at the eCPI formula, if you can increase the extra organic installs, you can drive the eCPI down. To make it happen, you should do App Store Optimization, also called Mobile SEO.

    For those not familiar with this concept, ASO is the process of optimizing your app’s metadata to get more organic installs. To better understand this process, you can separate it in two fields: Keyword Optimization (KWO) and Conversion Rate Optimization (CRO).

    Keyword Optimization targets exposure in highly relevant searches with the biggest traffic and lowest competition possible through keyword and keyphrase research. A research conducted by Nielsen discovered that app store search is the favorite method for app discovery, used by 63% mobile devices owners.

    When choosing keywords or keyphrases, always go for relevance, difficulty and then traffic volume, in that order. Keywords not relevant to your app will harm the conversion rate. For example, if you’re looking for a golf game and the search returns you a weather app, you probably wouldn’t download it.

    Conversion Rate Optimization (CRO) targets increasing the conversion of app store page views into actual installs through better marketing assets, such as icon, screenshots, videos, app name, description, ratings and reviews.

    Basically, KWO is responsible to get your app discovered on searches and the CRO will convince the user who found your app to download it. By working with both fields of App Store Optimization, you will increase the number of organic installs.

    With a paid acquisition campaign though, things get more interesting. Because of the increase in download velocity, your app will jump the charts and, more importantly, search results position. When combined with ASO, this boost will be easier and faster because your app will be naturally more visible and discoverable. The optimization process multiplies considerably the effectiveness of the ad campaign.

    The more optimized your game is, the higher the number of extra organic installs will be, and therefore, your eCPI will be lower as well.

    Now it’s your turn to optimize your app. Really, there’s no reason you shouldn’t, at all. It’s inexpensive and will generate lots of installs. In fact, it is the most cost-effective way to acquire users. By updating your app and changing its metadata, you’ll get a even better cost-effective campaign.

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