Blog

Share
Publishers

Holiday season user acquisition: What’s your strategy?

by Thomas Heinze on Nov 20, 2016

This is a guest post by Eric Seufert, a consultant with expertise in mobile user acquisition.

From the perspective of mobile marketers, the winter holiday period between American Thanksgiving and New Year’s Day is a complex but potentially lucrative few weeks. Going into the period, it’s important for user acquisition managers overseeing large budgets to determine what their strategy will be: attempt to tame the massive wave of traffic that surges throughout the app economy, or relent and let the tide take them where it may.

But before devising a strategy, the difference needs to be understood, from a marketing perspective, between the winter holiday season and the rest of the year. The first obvious difference is that people generally have more free time on their hands: public holidays and vacations provide plenty of opportunities to explore the App Store and Google Play. And what better respite from talking to family than playing a mobile game? Surely more than a few Thanksgiving dinners this year will be saved by someone deciding to load up Clash Royale rather than ask everyone who they voted for.

The second difference is the increased propensity to download apps around Christmas as people receive new devices and platform store gift cards as presents. Christmas day traditionally sees the highest number of smartphone activations and app downloads of any day in a given year, despite slowing smartphone sales growth in the West. Last year, Apple was the primary beneficiary of this phenomenon, taking nearly 50% of all smartphone activations on Christmas day (more than double that of Samsung, which had the 2nd most activations). And mobile analytics firm Flurry estimates that Christmas day sees a 120% increase in app installs compared to average daily installs for the rest of the month of December, meaning lots of owners of new smartphones will download lots of new apps in close proximity to eggnog, feeling flush with iTunes or Google Play gift card money that they reason might as well be spent all at once.

eric_headshot_square

Eric Seufert

These two differences could be interpreted to represent a holiday feeding frenzy for mobile marketers, and for some, it probably is. But a third unique characteristic of the holiday season makes it more likely to feel like a horror movie for many mobile marketers: brands have moved their budgets to mobile over the holidays in a meaningful way over the past few years — and this is especially true for Black Friday, the American shopping frenzy that takes place the day after Thanksgiving and on which 34% of total retail purchases were made via mobile phones in 2015. CPMs rise precipitously starting at the end of November and stay high through the end of the year, at levels well above the end-of-quarter budget dump in which brands usually engage. This is because mobile is increasingly where brands reach eyeballs, with mobile traffic accounting for 55% of total digital traffic last Thanksgiving.

And brands aren’t alone in trying to capture attention on mobile during the holidays. This year, both Zynga and Nintendo will be releasing massive mobile titles in December: Zynga with Dawn of Titans and Nintendo with Super Mario Run. These games will almost certainly eat up a lot of gamers’ time on mobile after Christmas.

So what should a developer do during the holiday season? That depends on its financial wherewithal and whether its app can credibly compete on a marketing basis during a CPM surge. Apple institutes an “App Store Freeze” each year (last year it was December 22 – 29) during which new apps are unable to be submitted to the app store. Given Apple’s recent reduction in App Store approval times, it’s hard to say how early a holiday app update needs to be submitted to get in ahead of the freeze, but the earlier, the better.

Once a developer’s holiday update is live, it’s up to them to figure out how they handle their holiday marketing spend. Most developers are operating their user acquisition campaigns on pretty thin margins and decide to bow out of the market completely by leaving their bids for CPI traffic stable over the holidays, accepting a big reduction in paid installs as a reality of the industry. That said, many developers also experience a big bump in organic installs — all of those new devices! — and so the period can be a revenue wash even if paid DNU numbers drop off, especially if the developer’s apps monetize heavily through ads (high CPMs are a great thing for some apps!).

But some developers go all in on the holidays. This approach sees developers ramp up their bids in an attempt to build mass awareness of their apps and make up the unit economic loss on strong network effects that persist well past the holidays, potentially having a long-lasting positive impact on ad CTRs. This is certainly a risk, but the allure is understandable: if a user installs an app on their new phone during a period in which they have a lot of free time to dedicate to it, they’re probably better candidates for becoming super engaged than they would be if they downloaded it on a bus on the way to work.

Whatever approach a developer chooses to take during the holidays, it’s important to recognize and understand the big shock the market experiences in November and December. All mobile marketers should be preparing a plan now for how they’ll adjust their campaigns for the holiday season.

Eric Benjamin Seufert runs Heracles, a mobile consultancy. He also operates Mobile Dev Memo, the mobile advertising trade blog, and Agamemnon, an analytics tool for mobile advertising. In 2014, his book, Freemium Economics, was published by Elsevier.

Tags:
Thomas Heinze is senior director, Business Development, at AppLovin.

We’re hiring! Apply here.