In many ways, app developers, like popular consumer brands in a supermarket, are locked in a fight for two scarce resources: consumer attention and shelf space. In the physical shop, consumer purchases are influenced by familiarity and availability, and few shoppers will endeavor to buy what they can't find or simply don't know exists in the first place. In the digital app store, companies invest heavily in marketing, pricing strategies, and app store optimization to raise awareness, encourage engagement, and drive downloads.
But success has its price. Aggressive bidding and the increased competition for the customer has impacted the average cost per install (CPI), causing the cost of user acquisition to rise through the roof. What’s more, the sheer volume of apps makes it difficult for companies to rise above the noise. Games app industry news site PocketGamer, which tracks the number of apps submitted to the Apple App Store alone, counted a whopping 11,000 apps in March 2018. Over 2,000 were games.
Consumers aren’t only overwhelmed by the number of apps on offer in the app stores. They are also increasingly concerned about the advance of low-quality apps that manage to slip through the app store review process, deceiving users and harboring malware. As these rogue apps also employ paid search to propel them to the top of the app store results screen, there is a critical requirement for ways to help consumers access apps they need – and can trust.
InnoGames’ harnesses pre-installs to reach new audiences
App companies, frustrated by fierce competition, are ready to explore ways beyond the app store duopoly to get their apps in front of potential audiences. At the same time, users are eager to embrace apps they know are real (not “fake apps”) and trustworthy. InnoGames, Germany’s leading developer and provider of mobile and online games, is rising to the challenge, taking advantage of a third distribution channel to distribute its games directly on mobile operator smartphones.
In this scenario, the mobile game comes pre-installed on the device, allowing the user instant access to an app that is prominently displayed on the device homescreen. InnoGames does direct deals with the mobile operator and also works with Digital Turbine, a company that uses an intelligent platform and direct partnerships with carriers to deliver the right app to the right user. Funda Yakin, InnoGames Director Media & Marketing Development, calls the strategy to distribute apps pre-installed on devices a “win-win-win situation” for all stakeholders. InnoGames, for example, benefits from their game apps being one of just a handful of games available on the user’s device.
“It’s much less competition for users on their handset than it is in the app stores,” Yakin explains. “If a user finds a game on their smartphone, it comes with a kind of recommendation from the operator or the smartphone manufacturer, so it’s a high trust factor that plays in our favor as well.” As mobile apps undergo rigorous testing before they can be preloaded on the device, users are ensured an optimal and personalized user experience that respects their personal privacy requirements. Mobile operators aren’t just focused on delivering apps that allow them to better entertain and retain their users. They view it as an optimal way to position themselves as an additional channel to the app store giants Apple and Google.
Finally, immediate access to users who take advantage of the shortcut to content on their phone, playing the game already installed on their device rather than searching for hours in the app stores, is a smart move that can boost the bottom line. In the case of InnoGames, Yakin says the strategy has allowed the company to report precisely the results every app marketer dreams of attaining. In practice, InnoGames achieves lower CPIs while targeting what Yakin calls “the right audience-device combination.” The result, she says, is “an increase of up to 40%” in customer lifetime value (LTV) compared to other campaigns.”
High transparency on the road to high performance
Granted, key conversion and engagement metrics can differ depending on the carrier, the country and the selection of devices on which a particular app appears, but InnoGames’ positive results suggest pre-installs are an effective channel to activate and motivate users.
Significantly, pre-installs are also a channel that can cut ad fraud completely out of the equation. “Since users have instant access to the app and don’t download it from another channel, such as the app store, we don’t see fraudulent installs,” Yakin explains. InnoGames, which also distributes its apps through the app stores, relies on attribution and fraud protection solutions from mobile measurement company Adjust to ensure “high transparency into how our campaigns really perform," she adds.
The outcome is “high confidence in our data, metrics and learnings [from app store campaigns] that we can apply to improve and optimize the user journey across all our games and all our distribution channels, including preinstalls” Yakin observes. ” That’s a huge benefit at a time when Adjust’s latest research suggests app install fraud is seeing massive and dangerous growth--both in the level of paid installs rejected by Adjust’s Fraud Prevention Suite and the number and sophistication of specific types of ad fraud. Overall, ad fraud hovers at 7.3% of all paid installs, and the Games category, with an ad fraud rate of 30%, is the second hardest hit.
While some Games companies are struggling to maintain their numbers, InnoGames is entering a new phase of growth. After a decade of consecutive growth, the company has increased revenues by 24 percent in 2017 and is set to see the numbers soar even higher with the help of upcoming titles like Warlords of Aternum and the recently launched mobile version of Elvenar. Yakin attributes part of the continued success to her company’s determination to continuously explore new approaches—like preinstalls—to acquire highly valuable and engaged users from the get-go.
Patience can pay dividends
While InnoGames has clearly benefited from this approach, it won’t be quite so easy for other app companies to follow in their footsteps. For one, Yakin points out, real estate on the mobile device is limited and highly-prized. “There is limited capacity and mobile operators won’t add new apps out of the blue.” What’s more, the work involved in negotiating and sealing the direct deals with mobile operators can take months, not weeks. ”You need stamina, resilience, and really good negotiating skills,” Yakin explains. Fortunately, Yakin, who has extensive background in the mobile industry--having worked at the Microsoft Corporation in Germany and in the U.S., where she was accountable for Microsoft´s products Windows and Lumia--was well prepared for the job. In hindsight she calls pre-installs “low-hanging fruits,” but she can also understand why more app companies are not exploring this approach.
Moving forward, InnoGames will expand its user acquisition strategy to include a stronger focus on cross-channel marketing campaigns to address their audience on the many devices and platforms, including TV and billboards, they engage with on a daily basis. “It’s all about achieving sustainable results, not just about buying installs or registrations, so we focus on acquiring users through approaches that are tailored for driving engagement and are good business for us.”