Media Planning & Buying Web Analytics Wireless

The War of App Acquisition Analytics

Posted by Jordan Greene on February 20th, 2014 at 12:30 pm

Welcome to the $9.6 billion U.S. mobile ad jungle.  In a dark corner of the mobile app world, there is a war brewing.  As more mobile advertising money continues to flow to acquire app users, the value is rapidly increasing to accurately understand what specific ad budgets are generating.  In practice, that is enabling an app owner to identify the best ad sources which drive installs and activity, and act upon that data.  The two leaders in this province, HasOffers and Kochava, have been conciliatory adversaries, each acknowledging, but not sniping at, the other.  But with one, small, facebook announcement last week, all that looks to change.

Since 2005, we have bought mobile media for clients, and tracked subsequent activity.  Somewhat surprisingly, we continue to see that across the mobile landscape that there is still an under-appreciation of the importance of understanding app analytics (not to be confused with the over-collecting of data, which is causing drowning).  At Mella Media, we stress to clients that acquisition tracking needs to be a “given.”  It is the front-door to knowing your users, and seeing where new opportunities lie.  Ultimately, it is the top of the funnel which leads to real business goals and revenue, as well as ad spend efficiency.  Therefore, it should be treated with that level of importance.

As consumers, we see the first app activity as the download.  However, from an app publisher’s standpoint, the starting line is the first-open, widely referred to as the “install.”  On a user’s first app launch, data is transmitted to the app’s analytics platform and the phone or tablet is identified as a new user. If the analytics platform can match that new user data to a previously-set-up ad campaign, then an acquisition can be properly attributed to the specific ad source.

© Mella Media, 2014

© Mella Media, 2014

While having the data is helpful for your analysis as an ad buyer, it is more powerful if your advertising partner—such as Google, facebook, Millennial Media, Pandora, etc.—had it too.  It should then empower them to provide you with more cost-efficient app installs.  This automated process of sending data back to the advertising platform is referred to as a “postback.”  Further, if you place tags inside your app on important events, such as consumer purchase, and that information is sent via postback to an ad provider, then you can essentially acquire more users who are more likely to buy from you.

These are the types of services provided by HasOffers and Kochava.  Both companies have similar offerings, with tracking portals for app owners and postback integrations with hundreds of advertising platforms.  Both had Google and facebook “bless” them as launch partners for postback activity when each opened up to third-party acquisition tracking in 2013.

They both have similar per-attribution pricing models, and each acknowledge the other in sales pitches as their prime competitor (they also mention Ad-x, but on a lesser scale).  However, with all these similarities, both companies categorically assert that HasOffers has a significant lead in market share.

That success came from a first-mover strategy, being early to the app-postback-integration game.  Advertisers wanted to track which ad sources were generating the best bang for the buck, so they turned to HasOffers’ Mobile App Tracking.  Ad sellers wanted to be able to better optimize their clients’ buys and potentially offer cost-per-install pricing, so they too turned to HasOffers.  The result was the company had a snowballing internal marketplace developing, with over 600 app clients, and 350 ad nets and platforms.

In reality, while clients want to test the new great thing or specific, targeted platform, the majority of acquisition budgets will gravitate to only a handful of advertising partners.  While having access to 350 ad platforms is great, it is the top five to 10 that matter most.  And facebook, by any estimate, is in that top five grouping—if not at the top of it.

In about a year, facebook became a dominant mobile ad supplier, specifically for the purpose of driving app installs.  For an agency, recommending a mobile facebook buy in a media plan will not raise any red flags with the client.  It offers great targeting, and a variety of pricing models including cost-per-install.  In short, if you want to spend ad dollars to promote your app, facebook is a critical piece.

Last week, in a well-coordinated privacy and mobile PR strategy, facebook announced that it was kicking out two third-party app tracking companies for privacy violations.  The dominant market leader, HasOffers, was one of them (http://bit.ly/1hax7YV). This opens all kinds of new questions, now.  Does facebook’s asserted concerns around the hot-button issue of mobile privacy open a Pandora’s box for HasOffers?  Will other ad platforms flee and will app owners begin questioning their practices as well? And does the market share dominance swan-dive with the capable Kochava picking up the pieces without app owners missing a beat?

Kochava is posturing that it will.  It launched a new version of its acquisition analytics platform within days of the facebook announcement, picked up some PR momentum with articles from places like VentureBeat, and gone as far to create a “Make The Move” program.  It actively targets HasOffers clients left in the lurches by the inability to track facebook campaigns, and even has gone so far as to tweet:

I guess that’s the end of conciliatory.  As more companies come to see the importance of understanding how analytics has continued to evolve—and that there is real ROI with smarter mobile ad campaigns—this market only expands. And perhaps gets bloodier in the process.  Welcome to the mobile analytics war.

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