“On TV And Video” is a column exploring opportunities and challenges in advanced TV and video.
Today’s column is written by Alex Betancur, co-founder at Lucktastic.
As we move into a new year, app marketing will continue to evolve with many companies shifting to and relying on a return-on-advertising-spend model.
What this really means is that marketers are ditching cost per install (CPI) and only paying once a new user performs a qualifying action, such as initiating a new game or leveling up. Given the ways that fraud continues to evolve, advertisers will increasingly look for qualifications that a new user will be valuable and loyal.
And they will also look for unique ways to access new users. TV appears to be on the rise, and although it can be costly, app marketers are findings ways to make it work. Will it stick?
When I first saw SuperCell buying a major ad spot during the Super Bowl XLVIII, I was ecstatic but had so many questions. I wondered how the company made the economics work. I always assumed that particular ad, and any mobile-app TV ad spot, was less of an attempt for an ROI and more of a fan thank you and perhaps a way to increase brand awareness. However, many mobile brands have made TV work.
Five years ago, TV ads for mobile apps used to stand out, but recently it’s become a little more commonplace with companies like Machine Zone and Seriously making it a more regular practice. That said, plenty of companies still don’t have confidence that they will see a return by running a prime-time spot.
For app marketers, the principal goals of a TV ad spend is typically to acquire installs or encourage engagement. It’s hard to quantify the amount of experimental TV budget that’s being allocated, but many new entrants have emerged in the remnant-TV space over the last year. TV marketing companies have various ways to attribute an install to their ad, however the base methodology usually involves looking to see if there was a spike in geo-specific installs within a small window following the ad airing.
For this reason, discerning TV installs from normal organic installs becomes a bit precarious as there can be many confounding variables, including the accuracy of the attribution model or changes to user-driven in-app social mechanics, such as likes or shares.
For app marketers who are new to TV and considering running a pilot, there are a few things to be aware of.
First, despite the remnant agency buys, it can be an expensive proposition. Unlike spend on a mobile affiliate network or through a platform like Google, minimum spend for remnant TV is usually around $100,000. This spend would likely be spread over four to six weeks and involve multiple networks. This means that they need to partner closely with a third partner company – usually a media-buying agency that understands the ins and outs of TV ad buys – and factor in their management fee.
Once the pilot has concluded they may emerge with an evergreen acquisition channel if the average customer lifetime value is high enough. However, they should expect CPIs that are far higher than their typical mobile spend.
A TV buy is obviously much different that a direct mobile buy. Mobile offers the benefits of a smaller and less-risky test spend, a shorter measurement period, the ability to handle it in-house through an existing user acquisition team and likely much lower average CPIs.
A traditional mobile ad buy can also be tethered to an in-app promotion or event, which can be branded and offer rewards to the viewer. Most companies are equipped to run these types of events through their marketing automation systems, incorporating push notifications and in-app messages.
In general, TV can be a big win for some companies but, unless the goal is purely branding, it needs to be scrutinized like any other channel. It is critical to start with test spend, work closely with a well-versed remnant inventory intermediary agency and be transparent about the economics before more spend is earmarked.
If app marketers are looking for a performance-based campaign, their budget may still get more mileage on mobile. However, if costs are starting to soar and the biggest traffic sources are capping out, app marketers may be able to find a new evergreen source of installs in TV.