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Direct response advertisers uncover new opportunities in mobile apps

While brand marketers are embracing in-app advertising, direct response marketers have been less enthusiastic about the opportunity. However, with the right targeting and offer, building a successful in-app direct response campaign is possible.

Since Google integrated AdMob into AdWords last year, the ad network now offers more flexibility and targeting options. As a result, some performance marketers, such as Everyday Family, are finding success with in-app advertising even when they are not promoting an app.

?The amount of direct response in in-app advertising is pretty minimal because of the lack of targeting,? said Marc Poirier, co-founder and chief marketing officer of Acquisio, Brossard, Canada. ?It is hard to build the audience, but it can be done.

?Because Google has made AdMob more targetable and because they have given you more control over how much you pay, including paying on a CPC basis rather than a CPM basis, it is now also possible to use it for direct response, to generate conversions for sales at a price that fits the objective,? he said.

?It is early days and there is still a lot to come from AdMob. The audience is huge, there is no doubt about that.?

More granular targeting
Direct response marketers have shied away from in-app advertising because the economics do not work since the conversion rates tend to be significantly lower than on desktop, the cost-per-click can be very low and there are a lot of accidental clicks.

Part of the problem when it comes to direct response advertising in apps is that app users are actively engaged with the app and often do not want to be taken away from the app?s activity ? whether it is playing a game or something else ? in order to click on an ad or convert.

?They may click because they are curious but to get them to convert on their phone can be tricky,? Mr. Poirier said. ?So the conversion rates are much lower so it makes it really difficult to reach the target cost-per-acquisition that direct response advertisers would have.?

Driving conversions
With the right campaign optimization technology, direct response marketers can manage where the ads are showing up, at what time and how much they are paying for them.

For example, Everyday Family, a digital publication for expecting mothers and mothers with young children, typically uses display and search advertising to generate online registrations so it can send out a daily email brief which it sells ads against. The online publisher wanted to extend the program with in-app advertising and worked with Acquisio on the strategy using its AdMetrica for AdMob.

Initially, Acquisio targeted high-volume apps, which mostly ended up being gaming apps. However, this approach did not work.

?We saw a really high volume but virtually no conversions because we were completely mismatched on the demographics,? Mr. Poirier said.

Acquisio tried to drive results by lowering the maximum bid from 20 cents down to 5 cents, but there was no change.

Next, Acquisio changed the strategy and started targeting apps related to pregnancy as well as coupon-related apps.

While there is not a lot of traffic on these apps, they are highly targeted.

After some testing, it was determined that 320 by 50 image ads and text ads were the best formats for producing conversions at a good price.

The volume of conversions started to grow, moving up from one or two per day to between 20 and 35 per day.

Finding an audience
Eventually, the campaign delivered up to 60 conversions per day at a cost-per-acquisition of $2 when the company had budgeted for a CPA of $3.

Everyday Family increased the budget for the campaign and it is ongoing.

?We learned that it is really tempting to go where the volume is and to try to optimize like crazy,? Mr. Poirier said. ?But the fact is that you need to find your audience and it is not going to be in the most general app of all that you are going to find them.?

One of the keys to a successful direct response campaign on AdMob targeting app users is to have a low-engagement conversion such as signing up for a newsletter and not something that requires users to take out their credit cards.

It is also important to be able to drive enough volume, which can be tricky, since it is difficult to build an audience on AdMob.

?It is about the audience,? Mr. Poirier said. ?Because it is difficult to build an audience in AdMob because right now all they can give you is category of apps.

?The key to improving results is finding the right category and subcategory of apps,? he said. ?You need to look at what?s yielding clicks, everyday all the time and makes decisions based on that.?

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York