Incipia blog

Part 1: How to Market an App with Limited Budget

Gabe Kwakyi | November 23, 2016

For independent developers, the exploding number of mobile apps has increasingly meant that building and releasing a solid mobile product without a marketing strategy is no longer good enough to succeed. Consider a few of the headwinds facing independent app developers looking to achieve success in the App Store:

  1. Rankings (category and keyword) in the App Store are influenced by any kind of downloads, whether paid, organic or otherwise. This means that the scales for gaining free visibility and downloads, which the vast majority of independent developers rely on, are tilted significantly towards apps that can afford to invest in a marketing campaign.
  2. Google and Apple, in pursuit of easy corporate profits during this frenzy in mobile marketing, are monetizing the App Stores more aggressively. While this does relieve pressure on headwind #3 by increasing the supply of ads, it ends up implementing an advertising-driven App Store tax, where organic visibility is declining, forcing apps to invest in marketing campaigns or else lose what organic shelf space is left, per headwind #1.
  3. App marketers are exacerbating the arms race of mobile marketing by pouring more and more money into their efforts to out-compete one another for a piece of the user downloads pie that has ceased growing in both relative and absolute terms. Rising demand means that every dollar spent on app marketing is becoming progressively less effective, with the consequence that it becomes more difficult for independent app developers to invest a small amount of budget and still enjoy a flow of quality downloads.

For developers with budget to spare, this is simply one more cost of doing business. Yet, for independent developers working solo or in a team of 2-3 people, the fact that investing in marketing is paramount to success can be a show-stopping problem.

How do I market my app with limited resources?

While these headwinds are significant, there is still a way for you to get the word out about your app and to move the needle in the right direction, no matter how limited your resources are. That said, it's important to set the right expectations, hence we use the phrase "move the needle" here, rather than succeed given how competitive the app industry is. While there is always opportunity to improve, it's important not to expect a mile if you only have an inch to give.

Five Tenets of Mobile App Marketing

Before getting to the actionable things that you can do to move the needle for your app, take a moment to read and consider our perspective on five important tenets of mobile app marketing to keep in mind:

  1. For marketing in general, there is a trade-off between ROI (return on investment; a ratio used to calculate value per instance, like dollars of revenue returned per dollar spent, or conversion rate per impression) and volume. By and large, the more installs you get, the lower your ROI per install will be, after you have reached critical mass of acquiring your true target users. This is because there are only so many people who are 100% sure to be your true target users, and as you reach broader in pursuit of acquiring more users you will acquire more "possible" target users, who may or may not be, while still expending resources to acquire them. The more narrow your marketing gets (low volume), the more sure you are that each user is your true target user (high ROI); the more volume you get, the less sure you are that each user is your true target user (low ROI). You may find that you can generate profitable installs with a small-scale paid marketing campaign, but it will be impossible to maintain that same level of profitability when seeking more volume.
    • Facebook lookalike audiences are a good illustration of this. A US 1% lookalike audience will have the highest ROI, but is limited to ~2 million users by definition. A 1-5% lookalike audience will have a lower ROI, but has higher volume (~10 million users).
      • If 200,000 users are your true target users, then the conversion rate from each user install from the 1% lookalike audience will be 10%. The conversion rate from each user install from the 1-5% lookalike audience is only 2%, meaning you have to pay for 5 installs before getting 1 true target user, which causes your ROI to decline. The reason for pursuing more volume at a lower ROI is when you have already acquired all or most of the 100% true target users, and you are looking to continue growing your user base.
  2. Tenet #2 is another generalization, which will by and large hold true. Whereas you will likely see declining ROI per install as you enjoy higher volume, you will also see a positive correlation between investing more effort into optimization and ROI per instance (if it is SMART-oriented and you are learning over time). You can always find ways to optimize for better performance, no matter how large or small your marketing efforts are. For instance, this can involve figuring out what time of day is best to post to social, what blog topics to write on, which ad text to use or what the ideal app screenshots are.
  3. Independent of tenet #1, keep in mind that there are precious few apps that genuinely have no competition, and as more apps enter the App Store (more competition), your ROI from each download will decline over time, all things equal. This is because mobile users are savvy and will download multiple apps to try each out before settling on one they like. This means that each app receives +1 download, but only one will keep that user and generate an ROI from that user.
  4. It's no longer enough to simply acquire more users – you must activate, retain and monetize users that you acquire (per Dave McClure's Pirate Metrics model), otherwise your effort/dollars will be invested inefficiently. By eeking out more value from the users you are getting, you can improve your ROI, and, per tenet #1, afford to go after more users (i.e. volume).
  5. Lastly – data is vital to drawing a good ROI from your marketing campaigns. Until you have acquired enough users through your marketing efforts (i.e. gathered enough data) your ROI will be sub-optimal, because you don't have enough data to know who your true target users are, where to find them and how to market to them.
    1. At first, all of your assumptions of who will be your target users are just that: assumptions. Just like the many bugs you'll find, you won't know who your true target users are through betas and your gut or before your app is "in the wild." You earn the knowledge of who your target users are over time through trial-and-error as you gain more users, meaning that every new user you get helps you become more efficient when deciding how to invest your next marketing dollar or minute of time. The big game studios make so much money because they can spend thousands of dollars figuring out who their target users are, then invest millions more marketing to these users. Furthermore, the more games they release, the more data they have and can use to make their future games marketing campaigns that much more efficient.
    2. Not only does your targeting improve with more data, but the better informed your creative optimization efforts are (i.e. does ad A or ad B convert more users on average?).
    3. If you're running ads, the more data you track (using the right tools), the better your campaign performance from any advertising algorithms you're working with will be. For example, Facebook's bidding optimization algorithm requires at least .5% conversion rate or 25-50 conversions per day for best results.

Now that you have some food for thought, check out part 2 to learn what your app marketing options are and how to select the best one(s) given your available resources.

Thanks to Brett Bauer for making some improvement recommendations on this post!

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Incipia is a mobile app development and marketing agency that builds and markets apps for companies, with a specialty in high-quality, stable app development and keyword-based marketing strategy, such as App Store Optimization and Apple Search Ads. For blog/video or speaking requests, business or press inquiries please contact us or send an inquiry to hello@incipia.co.