Mobile Marketing ROI: 3 Metrics that Matter and 3 that Don't
Metrics are key to measuring the ROI of mobile marketing efforts. Not all metrics are helpful, however.
By Adam Marchick, CEO, Kahuna
Push notifications today are like Hotmail in 1999. Mobile marketers and developers know they are onto something, but they are not always sure how to optimize for success.
A critical part of mobile marketing success is knowing how to measure it: which metrics to focus on and which to cast aside. In fact, a recent Unisys survey found that companies categorized as mobile trendsetters were more likely to define metrics than their average peers.
3 Mobile Marketing Metrics that Matter
Re-engagement: Do your push notifications inspire your users to become more active in your app? The answer should be "yes" 99 percent of the time. Every push you send should prompt users to re-engage at the next level - turning monthly users into weekly users, weekly users into daily users and daily users into rabid users and brand advocates.
Push notifications can be extremely powerful, and strong re-engagement uplift runs around 90 percent. If you are not seeing at least a 60 percent uplift in re-engagement, think about iterating on your notification strategy. In many cases, you will see better results by simply changing the message text or delivering the notification at a more optimal time of day. Delivery time can affect engagement uplift as much as 200 percent.
One edge case worth noting relates to push notifications around breaking news. In this case, number of views is also a valuable metric, as the purpose of the notification is to provide the user with important information, not necessarily to provoke an action.
Goal Achievement: Be strategic with push notifications, as you would with other marketing channels. This means that every notification should be sent with a specific purpose in mind. Ask and answer the question: "What end business goal are we trying to achieve by sending this notification?"
For a mobile commerce application, the goal might be purchases or revenue increase; for an entertainment app it might be registrations or video views or social shares. It is important to define this in advance, and closely measure the effectiveness of your messaging against the specific goal.
Benchmark for success: For mobile commerce apps, the right push notification should prompt a purchase uplift of at least 15 percent. Message personalization, user targeting, deep-linking and A/B testing are all factors that impact push effectiveness.
App Uninstalls and Push Opt-outs: In addition to positive responses, it is critical to understand any negative reactions to your messaging - namely, push opt outs and app uninstalls. When users get a bad email, they ignore it. When users get a bad push notification, they uninstall the app.
Knowing your overall app uninstalls offers zero granularity and is often misleading. Rather, it is important to track number of uninstalls as a result of each message, as there can be huge variance. The worst offending push notifications can cause a tremendous number of uninstalls. Great push notifications that deliver value and relevance can result in fewer app uninstalls than the control group.
3 Mobile Marketing Metrics that Don't Matter
App Installs/Downloads: Number of app installs is worthless if these installs do not become engaged users. Research shows that 25 percent of people use an app only once, and over half of all users churn after 3 months. The ratio of app installs to engaged users can be as high as 20 to one, meaning that 95 percent of your user acquisition budget would be generating zero value.
Consider tracking monthly, weekly or daily engaged users instead. Just make sure you are tracking people, not mobile devices, as 81 percent of high-value users own a smartphone and 56 percent own a tablet.
Number of Push Notifications Sent: Why are we proud of pure volume? It does not work to simply be the app that screams the loudest. The "batch and blast" push notifications result in low user engagement and significant app uninstalls.
Sending the right push notification to a user is much more powerful than sending 10 irrelevant or broadcast notifications. If you want to increase user engagement, think about message personalization instead of cranking up the volume.
Negative App Reviews: This is not a metric; it is an anecdote. There is a temptation in the industry to abort any marketing effort that elicits a negative response - even if it is just from one or two individuals, out of millions. This highlights the importance of understanding the impact of every message you send. When you know how much revenue or re-engagement a specific notification is causing, it is easier to evaluate the pros and cons and disregard the vocal minority.
Intelligent metrics give you the power to make the intelligent decisions. What kinds of trade-offs are you willing to make as you move forward with your push messaging strategy? Is a 10 percent uplift in purchase worth a 2 percent uplift in uninstalls? What about push notifications that provoke high re-engagement but low goal achievement? Are they considered a success?
Every app and every business is different, so there is no metric that can definitively answer these questions for you. Starting with the right data will go a long way to getting you to the best solution for your mobile business.
Adam Marchick is the CEO and co-founder of Kahuna, a mobile marketing automation company based in Palo Alto, Calif. Before Kahuna, Adam was an early member of the Growth team at Facebook and funded mobile enterprise companies at Menlo Ventures and Bain Capital Ventures. He is also a thought leader and advisor to Heads of Mobile around growth, engagement and revenue. Adam received his BS in computer science from Stanford University, and his MBA from the Stanford Graduate School of Business.