User Acquisition Cost – How do you calculate it? How do I know how much each app user is worth to your business?

Can you imagine your life without the apps you use daily? It seems that the app age has been a part of our lives forever, but as a matter of fact, it only started a little over a decade ago. While the app age has definitely matured, it’s still growing and evolving constantly. The app age has allowed us to access a variety of services and information quickly and easily and has given us greater control over our lives. As this trend continues, it is likely that the app age will continue to shape our lives in increasingly dramatic ways.

If you own an app, it doesn’t matter the vertical or size, you are constantly on the lookout to keep your app growing its user base which in turn will grow your revenue and profits. To achieve this, you constantly need to invest in marketing and in your app promotion. This is like trying to fill a bucket with water – you have to continuously pour water into it to keep it from emptying out. Similarly, in order to keep an app’s user base growing, you have to continually invest in marketing and promotion to maintain the momentum.

But how do you know if all that promotion and hard work of attracting new users is paying off?

User Acquisition Cost (UAC) is a critical metric that measures how much a business spends to attract new customers. It is an essential parameter to track for businesses of all sizes, especially for startups that are still trying to establish themselves in the market. In this blog post, we will discuss how to calculate UAC and how to determine the value of each signup to your business.

Calculating User Acquisition Cost

The formula for calculating UAC is simple. It is the total amount spent on marketing and sales divided by the number of new customers acquired during that period. For example, if you spent $10,000 on marketing and sales in a month and acquired 100 new customers, your UAC would be $100.

However, it is important to note that UAC should not be looked at in isolation. It should be compared to the lifetime value of a customer (LTV) to determine if the cost of acquiring a customer is worth it. If the UAC is higher than the LTV, the business is losing money. On the other hand, if the LTV is higher than the UAC, the business is profitable.

Determining the Value of Each Signup to Your Business

To determine the value of each signup, you need to calculate the average revenue generated per customer. For example, if your business generates $100,000 in revenue from 1,000 customers, the average revenue per customer is $100. Therefore, each signup is worth $100 to your business.

However, it is important to note that not all customers are created equal. Some may generate more revenue than others, so it is essential to segment your customers to get a better understanding of their value to your business. For example, customers who make repeat purchases or refer other customers are more valuable than those who make a one-time purchase.

Why are all these calculations important? Because once you know how much each user is worth, you’ll know how much you can invest in your app growth. Also, when you invest your time segmenting your audience, users, and high-profile or returning users, you’ll know where to invest more in your marketing efforts. The more you know about your users, the better you can target your efforts. This can help to maximize your return on investment and ensure you get the most out of your marketing budget.

Lifetime Value (LTV) is the total revenue that a customer will generate over their lifetime using your app. LTV solves the problem by telling you how much value a newly acquired user brings to your app – and by extension, gives you a cap for how much you should spend on acquisition costs. Mobile app LTV should be the primary barometer for your mobile marketing budget because it effectively assigns weight to each and every user (or a user average).

How to use LTV to optimize your app marketing strategy and budget allocation?

To optimize your LTV, you need to consider three factors: average purchase value, number of purchases, and retention period. Average purchase value is how much a user spends on your app each time they make a purchase. The number of purchases is how often a user buys something from your app. The retention period is how long a user stays with your app before they stop using it.

To increase your average purchase value, you can use strategies such as upselling, cross-selling, bundling, or offering discounts and incentives. To increase your number of purchases, you can use strategies such as personalization, loyalty programs, referrals, or push notifications. To increase your retention period, you can use strategies such as improving your app’s user experience, providing value-added content or features, or re-engaging users who are at risk of churning.

By measuring and improving these three factors, you can optimize your LTV and allocate your marketing budget more efficiently. You can also use LTV to compare different user segments, channels, platforms, or markets and identify the most profitable ones for your app.

The Return on Ad Spend (ROAS) is a marketing metric that measures how much revenue you earn for each dollar spent on advertising. To calculate ROAS, divide the revenue generated from an ad campaign by the cost of that campaign.

Conclusion

In conclusion, UAC, LTV and ROI are essential metrics to track for any business. By calculating UAC and comparing it to LTV, businesses can determine if their marketing and sales efforts are profitable. By determining the value of each signup, businesses can better understand the revenue potential of their customer base.

If you’re looking to grow and maximize your budget in the best way possible, contact us today.
With the variety of solutions we have for advertising and performance campaigns, you only pay for the results you’re after. We Maximize your budget the best way possible to meet your KPIs.

By Barak Vinkler, Product Manager at Zoomd

ROAS, or Return on Ad Spend, is a critical metric for any marketing campaign. It measures the amount of money a company earns for every dollar spent on advertising, helping to identify which strategies are the most cost-effective. In the world of mobile app user acquisition, achieving a high ROAS is essential for driving growth and maximizing the return on investment in marketing efforts. 

One way to boost ROAS in user acquisition campaigns is by using artificial intelligence (AI). AI can help optimize campaign performance by automatically adjusting bids and targeting based on user behavior and other factors. This allows marketers to maximize their ROAS while minimizing wasted ad spend. 

As a product User Acquisition expert, I will share my insights on the advantages of incorporating AI into user acquisition strategies and guide how to effectively set up and optimize AI to achieve a high return on ad spend across various channels. 

The Benefits and Challenges of Advertising in Multiple Channels 

Advertising in multiple channels can be a powerful way to reach a wider audience and drive growth for a business. By expanding beyond a single channel, marketers can access new audiences and increase their chances of finding and converting potential customers. 

However, advertising in multiple channels also comes with its own set of challenges. Each channel has its own unique features, targeting options, and ad formats, which can make it difficult to manage campaigns across multiple platforms. Additionally, different channels may have different audiences, which can require customizing campaigns and targeting to fit each platform. 

Despite these challenges, the benefits of advertising in multiple channels can be well worth the effort. By leveraging the unique features and audiences of each platform, marketers can reach a wider range of potential customers and drive growth for their business. By using AI to optimize campaigns across multiple channels, marketers can streamline the process and make it easier to manage campaigns and achieve great ROAS.  

Understanding AI for User Acquisition 

AI for marketing refers to the use of artificial intelligence and machine learning algorithms to analyze data and automate marketing activities. It can be used to identify the most effective strategies for reaching target audiences, improve KPI, and optimize campaigns for better results. 

AI can be used to automate bidding and targeting decisions based on user behavior and other factors such as event, impressions, or location. This can help marketers tailor campaigns to specific users, resulting in higher ROI from each ad spend. 

Applying AI for User Acquisition

Setting up AI for mobile user acquisition requires collecting user data, training a machine learning model, and implementing the model into your existing campaigns. This can be a complex and expensive process, but many tools are available to help marketers get started, including Skipper by Zoomd.  

AI for user acquisition requires testing new media strategies, analyzing user data, and adjusting bids and budgets regularly. In order to maximize ROAS, advertisers must pay attention to trends in their field and adjust their strategies accordingly. 

Maximizing ROAS with Skipper: A Tool for User Acquisition Across Multiple Channels 

One tool that can help marketers achieve great ROAS in user acquisition campaigns across multiple channels is Skipper, created by Zoomd. Skipper is a powerful platform that helps marketers optimize their campaigns by automating decisions such as bid and budget, campaign status updates, and more. 

One of the key features of Skipper “Automation Center” is its use of the “IFTTT” (If This Then That) methodology, which makes it easy and fast to create and edit campaigns. With IFTTT, marketers can set up simple “rules” that dictate how their campaigns should behave based on certain triggers.  

For example, a marketer might set up a rule that says “If the ROAS of a campaign falls below a certain threshold, then pause the campaign.” This allows marketers to automate their campaign management and make real-time adjustments based on performance for multiple campaigns and channels.

Skipper also offers a range of features that make it easy to track campaign performance, such as real-time reporting, budget allocation, graphs, and dashboards. This allows marketers to stay on top of their campaigns and make informed decisions about how to optimize them for the best results. 

Overall, Skipper is a tool for app owners, campaign managers and overall marketers looking to achieve great ROAS and stay on top their data in their UA. By automating campaign management and making it easy to track performance, Skipper helps marketers focus on driving growth and maximizing the return on their marketing efforts. The use of the IFTTT methodology makes it easy and fast to create and edit campaigns, helping marketers to quickly optimize their campaigns and achieve great ROAS. 

In conclusion, achieving a high ROAS is essential for driving growth in mobile user acquisition campaigns and AI can help in optimizing the performance. Advertising on multiple channels can be beneficial, but it can be challenging to manage campaigns across different platforms. Tools like Skipper can help streamline this process by automating decisions and optimizing performance across multiple channels. With Skipper’s automation center, advertisers can easily maximize ROAS and drive growth for their business. 

If you are out there looking for the fifth or sixth week of the month, you are not alone. Talk to any professional in today’s busy-driven environment, and they’ll likely have a story of how they rushed to work in the morning, struggled to keep up with their inbox, or came home too exhausted to spend time with friends or play with their kids.

For marketers operating in a constantly changing landscape, often serving audiences and teams in multiple time zones, it feels harder and harder to keep up with the clock and deliver powerful results for management along the way.
But it does not have to be this way. There are practical strategies you can implement to take back control on both your time and ROI.

Understand Your Core Audience and its Needs

The number one-way marketers can save time and improve results is to get back to the basics, and really get to know the people we serve or want to attract. The better we understand them, the better we will be at tailoring experiences to their preferences and goals, which means the less time we will spend on content, channels and campaigns that don’t work.

According to the 2019 Content Marketing Institute and Marketing Profs B2C report, marketers use a wide variety of tools to learn about what their audiences need to convert and thrive. These tools include social media listening, website analytics, keyword research, database analysis, primary research, sales team feedback, secondary research, and customer conversations and panels. You do not need to use all of them. Choose the ones that make the most sense for you.

Source: 2019 Content Marketing Institute and Marketing Profs Report

Of course, to make sure you get the most impact for your audience and bottom line while saving as much time as you can, track your activities and measure results. This way, you keep your audience’s responses to your efforts top of mind and adjust as you go to serve everyone better.

We know all this can sound overwhelming at first. We have been there too. But once you implement a few strategic processes and tools, it makes your work life easier. Let’s dig deeper into that.

Get Ahead of Your Marketing Schedule

Chances are, you ran into this time waster once or twice. You know your company hasn’t published a blog post, Instagram story or LinkedIn status update, and you start researching for ideas. You invest time in one that seems great, only to find disturbing information, doubt yourself or get objections from team members, and start the process all over again.

Meanwhile, the clock is ticking.

The ad campaign keeps waiting for you to find a freelance designer. The email copy you approved yesterday has not been incorporated into your autoresponder.

And that’s before we even mention the word inbox.

When we’re behind, it’s easy to feel so overwhelmed, we might as well take an hour-long coffee break. There’s no way we can get any of it done anyway, right?

It’s very human.

Yet if you use that coffee break, or another dedicated time slot, to take control of your schedule, your day to day life could become easier.

How?

If you publish content on a regular basis, get yourself a Trello board or an Excel spreadsheet, where everyone on the team can throw ideas into a collaborative space when they come up spontaneously, and provide feedback on a regular basis, instead of spending too much time coming up with a good idea when they’re stressed to hit “publish.”

To help you out, here’s how the team at CoSchedule, a platform that helps marketers stay organized, does it:

Even better? Create an editorial calendar and start producing content in advance. Creating a calendar can make it easier to come up with strategic ideas, such as aligning content with National Coffee Day, product launches and the step by step process you want your audience to go through this year, to continuously grow educated enough to buy from you.

This, too, is about putting your effort into what can generate the biggest impact, and saving time on what cannot. Producing content in advance gives you the peace of mind that you’re not running out of time, and helps you develop ongoing processes that ultimately streamline your work and make it faster.

Make More Use of the Content You Already Have

Have a game plan to repurpose the content you produce. Chances are you already have stats, quotes, images, and little nuggets of storytelling in your longer-form content you can repurpose for social media. Or you’ve given 20 tips on Instagram about a topic over time and can now combine them into one blog post.

SheIn, for example, presents clothing items in multiple ways on the same site, displaying them in different order under different categories. Women looking for workwear might find certain blouses by casually searching for blouses…

… other attire by searching for “urban elegance” under “Trendy 2019″…

… and completely different suggestions under “What to Wear to the Office?” under “Explore.”

Source: SheIn

All these options could be relevant to the same woman yet might not be discoverable without repurposing product photoshoots.

And since we’re talking about workwear, let’s talk about other choices you make for work.

Make Strategic Choices About Your Team

It’s likely that, at some point, you will need to hire an in-house team member or bring in a freelancer, a consultant or a software provider.

When you spend your marketing time on social, carve out time to get to know experienced professionals and leading tools in your industry. Connect with people who already know and love your audience ahead of time, so that, once a need comes up, it’ll be easier to reach out to a person you already trust, instead of researching tens of websites of new faces.

Bringing in people who specialize in your industry means it will take you less time to train them and to see results.

That said, consistently investing in the education and professional growth of people who are already on your team can also help your schedule stay sane as your marketing operations grow.

First, professionals who are on top of industry trends and skills can be more agile as needs change. Second, according to Training Industry, “personal and professional development is an important focus area for modern employees when seeking employment, as well as for deciding to stay with their current employer.” In other words, consistently investing in your team equals less time spent on recruiting and training new folks.

Showing your teammates, you care about them and sharing a costume with them also helps, of course.

Unify the Platforms and Tools You Use

Now that you have got your strategy and your team figured out, let’s go back to the whole “being everywhere and doing all the things” situation we tapped into earlier.

First, you do not need to be everywhere. That is a very easy way to waste time. Get clear on your goals, get clear on your audience’s needs, and test everything out. A strategy and a channel need to prove their efficiency for you to continue to invest in them.

However, as demands increase and platforms multiply on the daily, many of us do need to show up in a lot of places. That is basically how our company got created in the first place. You might know that our company was created by merging two companies, Zoomd and Moblin. But back in the day, Moblin was a performance agency. We served a bunch of big brands, including Coca Cola, Always, Ikea and… even ICQ. Yes, that’s how far back we go. And as you might imagine, we were swamped. We had to check so many platforms and ad networks for each client. It was thrilling, but exhausting.

So we built our own unified platform that combines over 600 ad networks into one simple dashboard, and when we offered it to clients, they managed to save 70% of their campaign work time thanks to that. Not to mention that, as a bonus, they’re also the new favorites with their finance people. If you want to make your accountant’s day, send her one invoice instead of the 600 she used to get.

But on a more serious note, you do not actually need to go all out and build your own software. The MarTech world is only getting better, and there are plenty of unifying options for marketers. There are platforms that let you handle all your campaign creative in one place. There are social media management tools that spare you from logging into 10 platforms every day and getting lost in a sea of hashtags. There are team management tools that combine email-like communication with task management and collaboration.

And those are just a few examples.

How Marketers Can Maximize Their Time-Saving Efforts and Set Themselves to Success

As you see, there are many ways to get underneath that mountain called your to-do list and make a bigger impact. We highly recommend not overwhelming yourself by trying to explore all of them at once, as sometimes you need to invest some time upfront – say, when onboarding a new tool or getting your team used to list down content ideas – in order to save time down the line. Start with one or two strategies, master them, then add more.