June 1, 2023
To say that the mobile app market is competitive is a bit of an understatement. According to Statista, there were 3.55 million apps¹ on Google Play in Q3 of 2022. Meanwhile, per data on Zippia, the average smartphone owner uses about 30 apps per month². Mobile marketers are constantly having to vie for space on the home screen, and the surest way to do that is by continuously adding new users through organic and paid user acquisition strategies.
Both strategies have their merits, and each one has something to offer to both seasoned marketers and those new to the game. It all starts with a comprehensive understanding of the differences between the two.
Paid user acquisition is a growth strategy that relies primarily on digital advertising as a means of expanding an application’s user base. In the case of mobile applications, app publishers pay to run ads promoting their app across different digital environments. Where possible, the ads are targeted towards the desired user base and distributed through a variety of paid marketing channels like social media platforms and in-app advertising networks. Potential users see the ad and (if they find it compelling enough), decide to install. Depending on the “quality” of the install, i.e. how well targeted the ad campaign is and the conditions under which the install was driven, users will hopefully stick around long enough to make in-app purchases, become a paying-subscriber or otherwise convert on other monetization methods the app employs.
Paid user acquisition campaigns can take place across a variety of different platforms, all of which offer varying degrees of targeting, testing, and measurement capabilities. Some of the most common channel categories include:
Paid ad campaigns can also be executed based on a variety of pricing models, each with their own unique benefits and drawbacks. Depending on the marketer’s desired outcome, they may elect to choose a specific pricing model that places more or less pressure on the platform to deliver results. Some of the most common paid user acquisition pricing models include:
Paid UA is an effective way of driving a predictable number of installs either on an ongoing basis or over a shorter fixed period of time. Unlike most organic UA channels, which can rise and fall based on community activity or seasonality, paid UA lets marketers keep their hand on the throttle and dial the flow of users up or down depending on their strategy. Ads start running as soon as campaigns are launched, meaning that marketers are able to see immediate results. Because they’re initiated by the marketer, calculating channel-specific ROAS (return on ad spend) is also relatively easy to calculate, provided campaigns are executed with the support of an MMP (mobile measurement partner) like Adjust, Appsflyer, Tenjin or Singular.
Paid UA strategies also allow for some audience targeting – though there are now fewer options as a result of user privacy changes³ made by Apple and Google. On top of that, most major platforms have shifted towards algorithmic campaign targeting that takes advantage of AI as a means of campaign targeting. This allows for a broader reach, but offers few (if any) manual targeting capabilities for marketers to dial in. Most modern digital advertising platforms still offer campaigns on performance-based pricing models, which is great for measuring and iterating your creative strategy, allowing you to get to know your audience even better for future campaigns.
Lastly, paid user acquisition tactics can also result in organic lift. Rapidly increasing your number of installs via extremely short and concerted ad campaigns – known as burst campaigns⁴ – can help boost your rankings in app stores, where more people will see your listing and may choose to give your app a try.
👀 Related reading: 10 user acquisition channels marketers need to know in 2023
The strengths of paid user acquisition strategies also come with some weaknesses. Marketers can expect to be acquiring users who have essentially been “cold-called”, meaning that they have little or no pre-existing relationship with the title. Without a solid user loyalty strategy in place, there’s immense pressure placed on the user onboarding funnel to demonstrate value to players early on. Failure to do so can lead to low return on investment.
Did You Know? - Mistplay & User Loyalty
While there’s no shortcut to fostering user loyalty, there are helpful solutions. The Mistplay loyalty app helps players discover new titles through an AI-driven recommendation engine, optimized towards spending behavior. Mistplay then rewards them with points for playing/spending which can be redeemed for real-life rewards like Amazon gift cards. The result is a more engaged, better retained, highly-loyal user base.
Reach out to our experts to discover the many advantages of advertising with Mistplay.
Furthermore, Mobile ad fraud⁵ is an ever-present concern in paid UA, which sees mobile marketers paying for fake installs that will never convert or generate word-of-mouth buzz. All that is to say, running ads is often only the first part in long-term user acquisition plans. To avoid losing users post-campaign, you’ll need to invest in loyalty strategies that motivate them to continue engaging with your app. In the age of user privacy where targeting capabilities are limited, app publishers also need to think carefully about their ad creative, which has recently become one of the most heavily weighted variables in a campaign’s performance. If your ad doesn’t match the in-app experience, particularly for mobile games, users may feel like their expectations have not been met, which can lead to higher churn.
And of course, as per the paid user acquisition definition, you must pay to play, which is getting more expensive. The average user acquisition cost on Instagram rose almost 20% from 2021 to 2022, according to Business of Apps⁶. Furthermore, a report covering Q4 2022 CPIs⁷ from Tenjin and InMobi found that the cost of acquiring players for hypercasual games, a genre known for its low-cost installs, had more than doubled to hit an all-time high on both iOS and Android. If you’re new to the market or simply don’t have the resources to continuously run ads, using only paid UA strategies may not be a sustainable option.
Organic user acquisition is a growth strategy that seeks to draw in users without the use of traditional advertisements. Unlike with paid UA, where you can easily attribute installs to an ad campaign, organic UA campaigns can be somewhat harder to measure individually. But there are a number of metrics you can track to see if your work is paying off, such as increasing page traffic and reviews, app store conversion rate by A/B testing how people respond to different messaging, subscription numbers for brand newsletters, and likes/follows on social media to indicate boosted brand engagement. Gathering all this data should allow you to connect the dots, perhaps not as precisely as you would for a paid campaign, but definitely enough to provide valuable insights and know whether or not you’re heading in the right direction.
Some popular organic UA strategies include:
Organic UA does not involve traditional ads, which means that, when done thoughtfully, it can be a more cost-effective way to drive people to your app. You’ll still need to invest in solutions that help you track organic growth, but you won’t incur costs by running ads.
It is also a less invasive experience for consumers, who get to discover you on their own time, at the right moment for them, without having to watch a disruptive or annoying pop-up ad that can cause negative sentiment. As privacy concerns around mobile apps grow⁸, more users may come to prefer finding new games or apps on their own.
Acquiring users organically also tends to be more effective in the long term, increasing loyalty and a user’s lifetime value (LTV). A 2020 Appsflyer study found that eight weeks after installing an app, organic users had been retained at a rate of 4.5%⁹, while those acquired through paid channels had a 3.5% retention rate. Why? One reason is, people who find your app on their own are actively searching for a product like yours and are therefore more likely to stick with it once they do.
Organic UA typically isn’t an overnight solution. While some apps end up going viral, organic user acquisition often takes time and patience before you begin to see your team’s efforts pay off. Not all companies have the luxury of waiting for users to materialize, especially new apps that only have so much time to prove their success on the market.
As we mentioned earlier, organic UA can also be more finicky to measure and attribute to a specific marketing effort or strategy. This lack of clear data makes it harder to establish correlations between data points and make the right adjustments.
When comparing the two, it may be helpful to think of traditional paid user acquisition as a faucet that can be turned up or down depending on external conditions. Success in paid UA is about balancing the market rate of user acquisition against your game or app’s performance, combining to form a positive return on investment.
Organic user acquisition is more of a long-term investment with returns that, while not immediately evident, have the potential to compound over time. It starts out gradually but remains ever present – as you steadily work toward building momentum, it draws in more engaged, genuinely interested people to your app. Like compound interest, it has the potential to yield outsized returns if invested early in a game or app’s lifecycle.
That said, paid UA is not better than organic, and vice versa. They simply accomplish different things: paid ads can help you grow your user base when you need it most, while organic growth helps you draw in users over a longer period of time. It’s when they’re used together in the right combination that mobile marketing magic happens.
How best to use the two strategies depends on the app you’re trying to promote. New apps can benefit from the rapid installs generated by paid user acquisition, but for long-term growth, you may want to start investing in some organic or brand-centric UA strategies simultaneously. Another consideration is your marketing budget. If you are trying to reduce marketing spend, it may be wise to reduce paid UA and focus more on organic growth.
While every mobile marketing strategy should employ some combination of paid and organic user acquisition, there are some characteristics that make particular games or apps better-suited, and more likely to generate returns from one or the other.
No matter what balance of paid vs organic UA your growth strategy employs, mobile app marketers are under more pressure than ever to make the most out of the users they are able to acquire. With SensorTower data from 2022 showing almost every genre experiencing dramatic revenue decline¹⁰ and Newzoo¹¹ optimistically calling it a “corrective year”, loyalty is increasingly becoming the most heavily weighted variable when it comes to successfully scaling a profitable mobile game portfolio.
At Mistplay, our team functions both like an advertising platform by placing your game app in front of an engaged audience, and a retention partner by rewarding users for playing and spending in your game over the long term. By encouraging users to stick around in the same app, Mistplay gives app publishers opportunities to derive greater value from users through IAPs, ad revenue, or other monetization strategies. Check out our advertising solutions page to learn more.
👀 Related reading: Loyalty is the new key to profitable growth for mobile games
Need to brush up on your user acquisition fundamentals? Check out our comprehensive article, “Mobile user acquisition: The modern developer’s guide”