GLOSSARY / UA
User Acquisition

User Acquisition (UA)

User acquisition (UA) is the process of attracting new users to a mobile app, service, or platform through various marketing activities. It is an essential component for growth, particularly in the app industry where gaining users is critical to monetization.

What is User Acquisition?

User acquisition involves attracting new users to a website, service, platform, or app via marketing efforts. Unlike other industries that refer to "customer acquisition," the app world uses "user acquisition" since not all app users will necessarily be paying customers. Even for free apps, user acquisition remains vital as more users equate to more opportunities for revenue through advertising or in-app purchases.

This article explores the importance of UA for mobile apps, methods to acquire users through paid and owned media, and tools to measure and optimize these efforts.

Why is User Acquisition Important?

With over 7 million apps available on iOS and Android stores, relying on users to stumble across your app is not feasible. In such a competitive market, it is crucial to target your ideal audience and demonstrate the benefits of your app.

Key Reasons for UA:

  1. Monetization: More users lead to better monetization through in-app advertising, purchases, or a hybrid model.

  2. App Store Rankings: Higher download numbers improve app store algorithms, increasing visibility.

  3. Retention: A solid UA strategy goes beyond installs to attract the right users, reducing uninstalls and boosting retention through re-marketing or re-engagement campaigns.

In summary, effective UA activities are crucial for app growth and sustainability.

Common Types of User Acquisition

User acquisition can be achieved through various channels, including paid, owned, and organic activities. Here is a closer look at these methods:

Paid Media Marketing

Paid media involves paying to display your brand to a relevant audience through channels like banner ads, social media ads, paid search ads, and influencer partnerships. These techniques aim to raise brand awareness or drive specific actions such as app downloads. Since you are paying for these placements, it's essential to ensure your investment attracts high-quality users.

Owned Media Marketing

Owned media refers to channels you control, such as emails, SMS, QR codes, your social media pages, and user invite communications. Although some of these channels target existing users, they can also be used to convert web users to your app, upsell to premium subscriptions, or re-engage dormant users.

App Store Optimization (Organic Acquisition)

App Store Optimization (ASO) is like SEO but for app stores. It involves optimizing your app store page headline, description, keywords, and other elements to boost rankings and make your app more discoverable. Effective ASO ensures your marketing efforts convert users who land on your install page.

Key Metrics for UA Measurement

UA managers track various metrics to measure the success of their marketing efforts and identify areas for improvement. Here are nine key metrics:

  1. Conversion Rate (CVR): Measures the percentage of ad interactions that lead to app downloads.

Formula: CVR = (amount of conversions / number of interactions) x 100

  1. Churn Rate: Indicates the percentage of users who uninstall the app within a specific timeframe.

  2. Cost per Install (CPI): Measures the cost effectiveness of acquiring new installs.

Formula: CPI = total campaign spend / number of installs

  1. Cost per Action (CPA): Measures the cost of specific actions like referrals or subscription upgrades.

Formula: CPA = total campaign spend / number of desired actions taken

  1. Cost per Mille (CPM): Calculates the cost of 1,000 ad impressions.

Formula: CPM = (total campaign spend / number of impressions) x 1,000

  1. Customer Acquisition Cost (CAC): Compares total acquisition costs against the number of new users.

Formula: CAC = total sales & marketing cost / number of customers

  1. Lifetime Value (LTV): Estimates the total revenue a customer will generate over their lifetime.

Formula: LTV = average purchase size x number of purchases x retention period

  1. Average Revenue Per User (ARPU): Measures the average revenue generated by users within a specific period.

Formula: ARPU = total revenue in period X / number of users in period X

  1. Return on Ad Spend (ROAS): Determines the revenue generated from advertising efforts.

Formula: ROAS = (total revenue from ad campaign / total campaign spend) x 100

Optimizing for High User Acquisition

To optimize your UA efforts, continuously monitor your metrics and adjust. Here are some tips:

  1. Target the Right Users: Understand your audience to serve relevant messaging that converts.

  2. Build a Content Strategy: Use content marketing to demonstrate your app’s value and connect with potential users.

  3. Perfect Your Creatives: Utilize A/B testing to identify the most effective ads.

  4. Optimize Your App Store Listing: Ensure your app store page is compelling with clear copy and attractive visuals.

  5. Offer a Taster: Use video demos and free trials to showcase your app’s value.

  6. Know Your Attribution: Use mobile measurement and attribution tools to identify high-quality user sources.

Common UA Challenges

Be aware of these challenges in your UA efforts:

• Ad Fatigue: Users may become blind to or block ads, so ensure your creatives are high quality and targeted.

• Attribution Issues: Privacy rules and fraud can complicate attribution, making it hard to measure effectiveness. Partnering with a measurement company can help.

• Cost and Scale: Scaling up can be expensive if relying solely on paid media. Balance your efforts with owned and organic activities.

Key Takeaways

• Definition: UA is the process of attracting new users through marketing to increase installs and drive monetization.

• Methods: Use paid advertising, owned channels, and optimize app store listings for effective UA.

• Metrics: Track a variety of metrics to measure and optimize UA campaigns.

• Optimization Tips: Target the right users, build content strategies, perfect creatives, and optimize app store listings.

• Challenges: Be aware of ad fatigue, attribution issues, and the costs of scaling UA efforts.

• Tools: Consider using measurement trustable partners for accurate data and optimization insights.