Jess Overton, Director of Demand for ironSource Aura, was welcomed by AppsFlyer to speak at MAMA Tech Virtual. Here’s the breakdown of his talk and what we learned about engagement and personalization.
The value of personalized marketing
With the number of ads that the average person sees a day rising from 500 to more than 5,000 in the last 30 years, there’s a necessity for personalized marketing. While the share of organic app downloads is decreasing, advertising spend per user is increasing and, as a developer, it’s important to be paying to reach the right users. For marketers and product managers who dive into data, metrics, and research, the currency has become the user's attention and long term engagement.
Advertisers are seeing a paradigm shift from being product-centric to user-centric in order to increase downloads and user engagement in the current market. By serving the right ads at the right times, the user is much more likely to respond to marketing, build a connection with the brand, and become a loyal user.
In leveraging personalization, partners of Aura have reduced acquisition costs by as much as 50%. It is very clear to our team that personalization is the way forward, but how? Before going into the pillars of personalization, we must first understand who we are personalizing for.
Know your users, know their journeys
For app based businesses, knowing who your high-value users are is important to all team members, and looking at deep data is a good way to discover who those users are. Aura recommends the following steps when starting down the trail of personalization.
- Identifying 8 customer segments that are high-value is the sweet spot. It’s important to remember that these segments may be surprising. For example, a food delivery app partner discovered that working class women, though they had smaller average order sizes, were very high LTV users.
- Map the user journey to find out where you’re losing and where you’re gaining users. When the segments are combined with the user journey, you create micro-segments to look at the connections between each stage of the journey and each segment profile.
Ultimately, these micro-segments lead to a one-to-one marketing strategy where you can spend money on the most valuable and profitable users. The food delivery app mentioned above increased conversion astronomically by showing ads with specific language on specific buses on specific routes to target working class mothers.
The 3 pillars of personalization
With the foundation laid and the micro segmentation done, the pillars of personalization are the next step in getting to the tops of users’ minds.
1. The targeting strategy
The first step in building a targeting strategy is to distill those rich descriptive user profiles into granular targeting parameters that you can use to find and identify your micro segments. For example, with the food delivery app, you must determine what is a working class mother and what that means.
Some parameters to define your micro-segments are device model, purchasing power, geographic region, age and gender, and existing apps already on their device - Users may have specific apps installed or a detailed engagement pattern to pay attention to. Most beauty service apps, for example, don’t have to get as granular because they simply exclude men from targeting. Basic shopping apps, however, personalize based on purchasing power in specific cities which means deep city, device, and age targeting.
You shouldn’t be paying for traffic that isn’t relevant or is outside of your micro-segmentation. Getting smart and identifying a good targeting strategy is imperative for personalization. Now that you know you are speaking to the users you want to be speaking too, you also need to be speaking their language.
2. The creative strategy
Ultimately, marketing is a two-way street where you provide messaging to the customer, and the customer responds with signals such as app downloads, clicks, or purchases. To offer continued value to your users, your responses to signals must be relevant, timely, and refined. A/B testing and advanced planning ensures you have a stockpile of triggered messages that are matched with individual signals for each micro segment.
During the midterm elections, Aura did some personalized A/B testing with a news app. Having already identified micro segments and parameters, we tested solely based on state. We built creatives that included the state name and imagery of the candidates of each of the leading parties in that state. The uplift in the CTRs for the personalized creative were somewhere between 20% and 30%, and the improvements held throughout the entire funnel.
The impact that a personalized ad can have on app growth is extensive. The experience of your app should be different for each of your micro segments to optimize on marketing, advertising, and in-app features. Now that the targeting and creative strategy is set, the only thing left is price.
3. The pricing strategy
At Aura, when launching a campaign on a new channel, ad, or micro segment, we use the same playbook every time. Yet, price is often dependent on the fact that you have identified segmentation, targeting, and A/B testing, which is why nailing down the users, their journeys, a targeting strategy, and a creative strategy is vital to personalization.
We begin by launching a blanket bid, which is one bid for all micro-segments. After 7, 14, or 30 days, we analyze the data to see where the LTVs are lowest. Ultimately, you are waiting to identify the pricing structures per micro segment, which ensures you are not paying for micro segments that don’t perform. Once the pricing structure is stabilized, we open the floodgates and scale on quality, ensuring we are paying the right price for the right user.
We launched an eCommerce app in South East Asia with a single bid, which we ran with for 30/35 days under a ROAS goal of 200%. We discovered that the results varied pretty widely between geos. While we were underpaying in India, we were overpaying in Malaysia and Indonesia. We employed a comprehensive bidding strategy that scaled based on quality, and each micro-segment saw a 200% ROAS.
A good pricing strategy makes sure that you’re winning those battles in the bidding waterfalls that you want to be winning, and letting go the ones that you should be letting go. Ultimately, you want to get to peak efficiency by scaling based on quality.
If the pillars of targeting, testing and pricing are built on a solid foundation, your app is well on its way to reach the most personalized users.
As personalization becomes the norm, there will be trends towards hyper personalization, which integrates datasets horizontally across a 360 degree user profile. In the future, experiences will be much more personalized than they are today and will combine both virtual and brick and mortar experiences.