Marketers always get overwhelmed with choices as the digital world evolves and expands rapidly. When considering retargeting vs. user acquisition, the multitude of strategies and channels can make determining where to allocate budget and focus efforts daunting.
Navigating the complexities of mobile app marketing today feels like being at the helm of a ship in a storm. Marketers are under immense pressure to continuously bring in new users, with every campaign scrutinized for performance and ROI.
The expectations are relentless: each quarter must outperform the last, with higher installs, better retention, and more revenue. Moreover, in an era of omnichannel strategies, the challenge isn’t just about choosing the right channels—it’s about optimizing them in tandem.
The dilemma with retargeting vs. user-acquisition
For mobile app growth marketers, two of the most critical strategies are user acquisition (UA) and retargeting (RT). With so many strategies available, how do you prioritize? Should you double down on user acquisition to keep that growth engine humming? Or should you pivot and invest more in keeping your current users engaged?
With countless possibilities, finding the best fit can be tricky. It’s not just about following trends; it’s about making decisions that align with both short-term gains and long-term objectives.
In this post, we’ll peel back the layers of two critical strategies—user acquisition and retargeting. As you juggle budgets, resources, and expectations, it’s essential to explore which of these strategies best addresses your challenges and how they fit into your broader marketing efforts.
The stakes are high, and the answers aren’t always straightforward.
How do user acquisition campaigns help?
Growing an app often starts with user acquisition (UA). Bringing in new users is essential for expanding your app’s reach and driving growth. However, successful UA campaigns go beyond simply increasing installs.
The success of a UA campaign is often measured by how effectively it balances acquisition costs with the value generated by new users. A well-executed UA strategy not only drives installs but also ensures that these users are high-quality and likely to engage with your app over time.
Key KPIs for UA include Customer Acquisition Cost (CAC), Lifetime Value (LTV), and Return on Ad Spend (ROAS). Balancing these metrics is crucial to maximizing the efficiency and effectiveness of your campaigns.
Additionally, tracking retention rates on Day 7, Day 14, and Day 30 helps ensure that new users are not just acquired but also retained and engaged over time. After all, acquiring users is just the first step; retaining them is equally vital for sustainable growth.
The challenge of retaining mobile app users
Interestingly, studies have shown that the probability of selling to an existing customer is 60-70%, compared to just 5-20% for new prospects.
For mobile apps, retaining users is a major challenge. Mobile users have an average of 80 apps installed, but they actively engage with just 9 different apps daily. Retention rates are dropping yearly, as reflected in Appsflyer’s App Retention Benchmarks.
In other studies on retention:
- On average, apps lose 77% of their daily active users (DAUs) within just three days of installation
- Retention rates drop from 25.3% on Day 1 to a mere 5.7% by Day 30
- With a Month 3+ churn rate of 68%, keeping users engaged is crucial.
- Apps that successfully engage users at least once a week are much more likely to build long-term loyalty
This is where retargeting comes into play as a powerful strategy for mobile app marketers.
How can retargeting help?
Retargeting is a strategy focused on re-engaging users who have interacted with your app but haven’t completed key actions. It helps improve critical performance indicators (KPIs) that growth marketers care about, such as retention, cost efficiency, and campaign effectiveness.
Retargeting boosts retention by reminding users about your app, reducing churn, and increasing Monthly Active Users (MAU). This naturally enhances Customer Lifetime Value (LTV) since retained users typically contribute more revenue over time.
These campaigns are often more cost-effective than acquiring new users, resulting in lower Cost Per Acquisition (CPA) and better Cost Per Click (CPC) metrics. By targeting users who are already familiar with your brand, you can achieve a higher Return on Ad Spend (ROAS), making your ad budget work harder.
Comparing UA and RT side-by-side
It’s evident – user acquisition and retargeting complement each other
User acquisition and retargeting are not mutually exclusive. That’s why there should never be a comparison of retargeting vs. user acquisition. When combined, they drive the maximum value and revenue from app users. Each plays a distinct yet interlinked role in a holistic growth strategy.
User acquisition focuses on expanding your user base by attracting new prospects. This strategy is crucial for growing your app’s reach and initiating engagement. However, to truly capitalize on this growth, retargeting plays a vital role. By re-engaging users who have already interacted with your app, retargeting helps to boost their retention and ongoing engagement.
When combined, UA and RT not only enhance user acquisition efficiency but also significantly improve metrics such as Lifetime Value (LTV) and Average Revenue Per User (ARPU). UA brings new users into the fold, while RT maximizes the potential of these users by keeping them engaged and increasing their value over time.
Together, they ensure a more effective and profitable user journey, turning initial interactions into long-term revenue streams. Looking at an even bigger picture, the synergy of UA and RT also supercharges your omnichannel strategy by ensuring a seamless, personalized user experience across multiple touchpoints.
Achieving the perfect balance between user acquisition and retargeting requires a strategic approach, and Aarki’s advanced AI-powered solutions are designed to help you optimize every stage of the user journey. Whether you’re looking to scale your audience or maximize the value of existing users, Aarki provides the expertise and technology needed for a holistic strategy. Ready to elevate your app growth? Contact us today to get started.
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