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Go behind CPA Go Return of Investment (ROI)

Return of Investment

Stop focusing on other people’s numbers and start working on your own. We humans are obsessed with comparing numbers. It begins since childhood when we compare ourselves to other babies; “He was born 55cm and the average is 48cm.” It continues as we grow up and kids compare some body parts with their friends or with actors, and it’s also present at our university when we’re being evaluated as students against our friends.

 

The same goes to marketing. Often, I hear people asking, “So, what’s your CPI/O/A…” and I think it’s a completely wrong approach. I once had someone telling me they reduced their CPI costs to 0.80 cents per install and they were still unhappy. This is because the focus should actually be on the return of investment (ROI) per euro spent, regardless of the type of business you’re running.

 

When talking to people, I often say we build a report that does more than just answer your questions. It also indicates if you’re doing a good job and if the users you attract are producing the results you expected. Because in all honesty, our products can fit everyone, but the people who find us relevant should produce enough ROI to cover our spending. If this isn’t the case, taking the bidding down won’t help because most likely your users will be less relevant for you.

 

I know many organizations already adopted ROI as their main indicator for installs, but what do you do with your retargeting? There’s so many ways to retarget users and I’ll share with you three of my favorites. And no, you shouldn’t target them all as one.

 

Cohort breakdown

When was the first install? When was the session? This is the simplest cohort approach for targeting users. You start with the closest one, 0 to 7 for example, and you keep extending it. The farther you are in the cohort the less money you pay.

 

Flag and categorize

Based on events in the last session, you put the user into a category and decide how much you’re willing to pay for it. This system is a good start for companies with little data but with a working plan who wish to check if their product works while also evaluating the value of the session and future sessions.

 

User score

Scoring your users can help you create a nice segmentation over many sessions. The more your user is active, the better you know how to evaluate him and the value he produces. This way in the long term, each session gets a score which averages into a score per device or user id. This way, you keep track of your users and easily find what’s required to increase your session’s quality.

Lior Barak

http://www.taleaboutdata.com

Lior Barak has been working with marketing data for over ten years, overseeing transformations of teams from using manual and nonefficient tools into a state of the art marketing automated reporting systems.

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