10 More Things I Learned By Spending Another £1M On Facebook Advertising - Mobile App Edition | Happy Nine To Five

Wednesday, 9 September 2020

10 More Things I Learned By Spending Another £1M On Facebook Advertising - Mobile App Edition


Two years ago I wrote a blog post detailing my experience of running paid Facebook campaigns and the most important things I learned along the way as I spent over £1 million on the platform.

I was so amazed by the response I got to it, and I was honestly so happy to see how many people have found it useful and identified tips and ideas they could implement in their own strategy.

Which is why I am now writing part 2! Since then I have transitioned into mobile app marketing and worked with a number of companies who relied heavily on paid acquisition through Facebook and Instagram. This led to me spending another £1m on the platforms and acquiring more in-depth knowledge about how to best market your mobile app and grow your business.

While the first post was based predominantly on my experience running website conversion and lead generation campaigns, this time I'm focusing on mobile app advertising and the best strategies that helped me scale user acquisition and drive business growth through Facebook.

You'll also find practical examples of campaign ideas, target audiences and creative considerations that you can easily apply to your own campaigns, so make sure to keep reading!

1. Lookalike Audiences are a very powerful targeting tool.

Lookalike Audiences allow you to reach people who share similar characteristics with your existing customers. You get to tell Facebook what attributes to look for and how closely they should match the audience with your existing app users.

If you're a mobile app publisher, you can create Lookalikes based on in-app events tracked through your SDK (software developer kit), such as Purchase, Add to CartComplete Registration or Level Achieved

Lookalike Audiences are also dynamic and get updated every week (as long as they're being used in an active ad set), which means you'll always be targeting new people.

If you're optimizing for in-app purchases, create Lookalikes based on the top 10-25% transactional users, purchase value or purchase frequency. If retention is more important to you, base your Lookalikes on app installs plus the number of app sessions in a given time.

Which brings me to #2...

2. Use your mobile app data to target based on purchase behaviour.

A strong Custom Audience is key to building high-performing Lookalikes. When creating a Custom Audience (also known as seed audience), consider your most valuable in-app events, and make use of extra parameters such as the number of app sessions, session frequency or purchase amount. 

If you have implemented Facebook' SDK and are actively tracking mobile app events, you can create Custom Audiences based on specific actions people have taken in your app, such as Add to Cart or Complete Registration

You should also think about your overall campaign objective - iff your goal is to increase purchases, aim for an audience of high-value transactional users. If you want to improve app retention, create an audience of deeply engaged app users.

While the quality of the Custom Audience is the most important, you should still aim for between 1,000 and 10,000 users as a minimum. This will give Facebook enough data to build a Lookalike Audience that closely matches your seed audience.

Ultimately, the type of Custom Audiences you set up will vary depending on your business model, objectives and KPIs. 

However, if your goal is to drive conversions and increase sales, these are the best Custom Audiences I have used as a base for Lookalike Audiences, across a variety of industries:

  • Top 25% transactional users - Retargeted to drive more purchases.
  • App users with 3+ purchases - Retargeted to drive more purchases.
  • High-value app users with purchases of £100+ - Retargeted to drive more purchases.
    • All three incredibly effective especially at peak times such as Black Friday or Christmas.
  • Added to Cart or Initiated Checkout - Retargeted to complete the purchase.
  • Viewed Content but didn't purchase - Retargeted to drive the first purchase.

3. Choose the right campaign objective.

Your Facebook campaign objective should align with your overall business goals, while the conversion event you optimize for should reflect the action you want people to take after clicking your ad. 

Some of the standard conversion events you can optimize for include View Content, Add to Cart, Initiate Checkout and Purchase.

Your chosen conversion event determines who Facebook will show your ads to - for example, if you optimize for purchases, Facebook will show your ad to people most likely to complete a purchase in your mobile app. 

As a general guideline, if your goal is to acquire more app users, you should optimize for App Installs. To increase purchases, optimize for Conversions or Catalog Sales.

Another thing to keep in mind is how frequently your chosen app event occurs. You should pick the lowest funnel app event that will give you a minimum of 10 conversions per day, and an app event to install ratio between 1% and 50%.

If you've chosen Purchases but the purchase rate is too low, test another mid-funnel event that could bring in high-quality users, such as Tutorial Completed, Level Achieved or Initiated Checkout.

And a quick note on what to measure:

For in-app purchases, your main KPIs should be ROAS (return on ad spend, based on user LTV) and ARPPU (average revenue per paying user).

If you're aiming for cheap installs and high volume, pay attention to CPI (cost per install), ARPDAU (average revenue per daily active user) and in-app retention rate (based on day 1, day 7, etc.).

4. Increase your budget slowly to stay within your target CPI.

Increasing the campaign budget will eventually also increase your average cost per install (CPI) because Facebook has to expand your reach to be able to spend your entire budget. 

Therefore, it's recommended to not increase the budget by too much in one go - increase in 10-20% increments at a time and avoid increasing any further until the CPI stabilizes and the ad set has exited the Learning Phase (this usually happens when the ad set generated at least 50 conversions).

To scale growth in a more sustainable way, focus on a combination of user acquisition campaigns and retargeting campaigns to convert existing app users to customers and re-engage inactive users.

5. Scale user acquisition with App Event Optimization.

When running App Install objective campaigns, you also have the option to use App Event Optimization (AEO). This feature optimizes towards the first instance of a standard app event within 1 or 7 days of someone clicking an ad.

It targets high-value users who are more likely to take a valuable action in-app, so CPIs tend to be higher - but that's expected because it focuses on the quality of users rather than volume.

I would recommend starting your campaign with App Install optimization first and then switch to App Event Optimization after 24-36 hours. Using automatic bidding instead of manual can also help speed up delivery, and you can still control the campaign budget and volume with daily spend caps.

6. Drive growth and revenue with Value Optimization.

When you use Value Optimization in your campaigns, you focus on purchase value. The feature was designed to help advertisers optimize mobile app install and conversion campaigns to drive results while focusing on purchase value as the main KPI.

This type of campaign works best with larger audiences (2+ million). Facebook analyzes mobile app data passed through your SDK and based on purchase value, it estimates how much someone is likely to spend over a 7-day period. Your bid is automatically adjusted to reach people who are likely to spend more, at a lower cost.

It's best to let the campaign run for at least 10 to 14 days before assessing performance. When analyzing performance, the main metric to look at in the Ads Manager dashboard is Purchase Return on Ad Spend (ROAS).

7. How to make Campaign Budget Optimization work for you.

In September 2019, Facebook began rolling out its Campaign Budget Optimization feature as a default setting to all advertisers. With Campaign Budget Optimization, budget and bid strategy control moves to the campaign level (previously at the ad set level).

The main benefit is that it distributes the campaign budget efficiently across ad sets based on performance, so if one ad set is generating more conversions at a lower cost, more budget will be allocated to it.

The drawback is that it doesn't allow for an even budget split across ad sets. From experience, this has been particularly challenging with geo-targeting and multiple location-based ad sets within the same campaign, each requiring a custom budget based on audience size.  

In this scenario, to have more control over budget allocation across ad sets, I would set minimum and maximum daily spends for each ad set. This way, even with CBO optimizing towards the best-performing ad set, all of the ad sets would still get enough results to allow me to assess performance.

An example of how to structure your ad sets in a CBO campaign, and also avoid audience overlap:

  • Ad set #1 - Interest and demographic-based
  • Ad set #2 - 1% Lookalike
  • Ad set #3 - 1-2% Lookalike (excluding the 1%)
  • Ad set #4 - 2-3% Lookalike (excluding the 1% and 1-2%)

8. Customize your SDK app events and parameters.

The Facebook SDK (software development kit) allows you to measure your mobile app activity, build audiences and optimize delivery to reach people most likely to take an action. 

To start tracking the actions people take in your app, you need to integrate the SDK with your iOS and Android apps and set up standard app events. You can then use the data passed through the SDK to create Custom and Lookalike audiences, optimize campaign delivery and measure performance.

When you define your app events and parameters, it's important to think about how you can customize them based on your type of app and your unique customer journey. 

If your app is in the eCommerce/retail space, you could benefit from setting up a Searched event, an Added Payment Info event, or Content View and Added to Wishlist with Content ID, Currency or Value as parameters. 

If you're promoting a mobile game, Completed Tutorial, Achieved Level or Unlocked Achievement would be better app events to track.

Aligning your app events to your objectives will help you better understand the user journey and conversion flow through the app, identify high-value audiences and retarget users based on app behaviour.

9. Use Dynamic Product Ads to retarget Abandoned Cart users.

If you have a Product Catalog, you can run dynamic ads to get users back into your app to complete their purchase, and also to show relevant product recommendations and encourage cross-selling to existing customers.

These ads are automatically generated based on your catalog inventory, which means you don't have to manually create an ad for each product. They're also very efficient at reaching people across devices.

Since they're based on in-app user behaviour, dynamic ads are an incredibly powerful way to drive high-value conversions at a reasonable cost. 

In previous retargeting campaigns ran using Product Catalogs, I have seen conversion rates as high as 50% (the average conversion rate for Facebook ads across all industries is 9.21%, according to a recent study by WordStream). 

Creative-wise, I have also noticed that the call-to-action "Book Now" tends to perform better overall (= has a higher conversion rate) than "Use App" or "Learn More".

If you've set up a Product Catalog and you're ready to start experimenting with dynamic ads, here are two audiences worth testing:

  • Abandoned Cart in the last 7 or 14 days - Retarget to complete the purchase.
  • Viewed Content in the last 7 or 14 days - Retarget to encourage product discovery and initiate checkout on the first purchase.

10. Static images and video work better together.

Campaigns that combine both static and video assets generally achieve a higher conversion rate vs. static images alone. By increasing your incremental conversions, your CPA is also lowered, which leads to better-performing campaigns overall.

If you don't have resources to create video ads, you can experiment with adding lightweight motion to static images, to creates more compelling and engaging ads.

Also, pay attention to the creative considerations and adapt your creative to the platform you're running ads on. For example, if your campaign is running on Instagram only, consider using different, more stylized images or videos in your ads, as they will match the Instagram aesthetic better.

Make sure to also rotate creatives every week or every other week, depending on performance.


Photo by Viktor Hanacek / Picjumbo (Premium Collection) 

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