The APAC app market is looking up. It's almost doubled in revenue since 2019 and set to hit new highs. The catch?
Businesses that pursue the opportunity will want to maximise their returns on investment. For that, they'll need robust measurements to accurately optimise for growth. But the measurement of marketing effectiveness has evolved significantly in recent times due to privacy regulations, and this can limit data collection.
Marketing mix modelling offers a comprehensive view of how your marketing spend drives sales, and how you can optimise your budget to grow business.
To fuel growth by demonstrating solid returns, app advertisers will need to find ways to bridge data gaps and understand how their ad spend drives business outcomes throughout the customer journey.
Having a data-driven attribution model will help with measuring marketing performance, but enhanced privacy regulations have made them less deterministic. To gain complementary insights, leading app businesses are also adopting marketing mix modelling (MMM).
MMM, a privacy-centric statistical method, analyses data from a range of sources, including your sales data, your marketing activities, public information on the marketing activities of your peers, as well as seasonal and macroeconomic factors. This gives you a comprehensive view of how your marketing spend and activities drive sales, and how you can optimise your budget to grow your app business.
Why MMM is essential for app businesses
MMM can help you grow your app business by providing three key things.
Sustainable, privacy-centric measurement
MMM uses only aggregated data, such as advertising impressions, advertising spend, revenue, and industry trends like popularity rankings, to evaluate your campaigns. This means you’ll be tapping into a sustainable data source that’s unaffected by privacy regulations. This also means you have future-proof data for measuring marketing effectiveness.
Holistic view for informed decisions
MMM evaluates marketing effectiveness by taking into account anything that might affect revenue, including factors such as advertising, product updates, in-app campaigns, seasonality, and competitor impact. This comprehensive picture of what drives effective acquisition and engagement helps you make well-considered marketing decisions.
Data-driven budget optimization
MMM’s holistic measurement capabilities can provide more than performance data. It’s able to suggest data-driven budget adjustments that’ll help you find the optimal allocation to deliver the highest return on your marketing spend.
Korean gaming developer and publisher Aloha Factory wanted to grow its business sustainably. It also wanted to adapt to privacy-related changes that impact measurement, including the App Tracking Transparency policy. So it put MMM’s privacy-centric measurement to the test with the help of Airbridge, a measurement company.
Aloha Factory set up a model that considered media impressions and contextual factors such as weather, COVID-19 infections, and Search indexes, to get a comprehensive view of marketing's contribution to sales. And it discovered that 37% of its app installs came from Google App campaigns, as compared with the 13% estimated by last-touch attribution.
Upon further analysis, Aloha Factory found that its MMM provided a more comprehensive measurement for two reasons. First, it accounted for all customer touchpoints rather than only the final one. Second, it used aggregated data rather than user data, which has its limitations due to privacy regulations.
Based on its discovery, Aloha Factory ran various simulations to see how it could optimise its budget allocation across its media investments to drive sustainable growth. In one simulation, using the same budget, the total cost per install across the entire cross-channel budget was predicted to decrease by 24%, while app installs were projected to grow by 31%.
Why using the right MMM is key
While MMM has significant strengths, not all models are created equal. A generic model can be misleading if it doesn't reflect your marketing strategies and the reality of how your business operates.
To make the most of your MMM, you’ll need to ensure it’s aligned with your unique business structure, and that it considers key variables such as seasonality, customer journeys, and changes in marketing strategies.
It’s also important to validate your model’s accuracy, and you can do so by collaborating with the right pool of partners, from industry experts to media specialists. Their expertise and diversity of views will help ensure your model is built for your specific needs.
Amanotes, one of Southeast Asia’s top gaming app publishers, was in search of a holistic, privacy-centric way to assess its iOS campaign performance. In particular, it wanted to understand how its media investments on different channels was influencing its app search spend.
To find an answer to that specific business question — and uncover growth opportunities — Amanotes turned to Airbridge. The measurement company and app marketing expert partnered with Google to hold work sessions with Amanotes and developed an in-house MMM that catered to Amanotes’s business structure and operations.
The custom MMM accounted for Amanotes’ multiple layers of revenue. It also provided a privacy-centric, cross-media measurement that incorporated media variables like ad investment, and contextual factors such as market share, app updates, social media views, and seasonality.
As result, Amanotes learned that App campaigns were its best-performing channel, contributing to 28% of its total media revenue. This finding helped it identify a way to increase its revenue by 12% without raising its budget, and it now plans to scale the use of the MMM to improve its media buy performance.
MMMs have ushered in the future of app measurement and growth. The privacy-centric, durable measurement solution lets app businesses optimise for performance, even in instances when privacy regulations might limit data collection.
By working with expert partners to build a custom MMM, you can gain a holistic understanding of your marketing effectiveness and maximise your budget to achieve greater results.
Contributor: Sirisha Bhupathi, Measurement Analytics Lead, SEA, Google
