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Retargeting vs. new user acquisition: Which method performs better?
When it comes to growing a mobile app, marketing teams often ask: should we prioritize retargeting lapsed users, or focus on user acquisition (UA) to bring in fresh installs?
At Adjust, we set out to answer this with data. Our hypothesis was simple: retargeted users would generally outperform new users across many key performance indicators (KPIs), including retention, in-app events, and crucially, revenue events. Here’s what we discovered.
Key takeaways
When comparing the performance of retargeted users against new UA cohorts, the differences are not only statistically significant but also meaningful for growth strategy. Retargeted users demonstrate stronger engagement, generate more revenue events, and retain better over critical early lifecycle stages. Here’s a breakdown of the most important insights from our study:
- Engagement: Retargeted users exhibited a 152% higher engagement rate (measured by number of in-app events per user) compared to users acquired through new UA campaigns over a 30-day period.
- Revenue: Retargeted users triggered 37% more revenue events in the first 30 days post-install, highlighting the value of investing in reengagement strategies to maximize monetization potential.
- Retention: On day 1 after install, retargeted users retained at a 5% higher rate than newly acquired users, a gap that persisted through day 7, before narrowing in later weeks.
Methodology
We analyzed four key cohort KPIs over installs collected over a six month period.
Retargeted users trigger more in-app events
An event refers to any in-app action performed by a user—such as completing a level, clicking a link, or engaging with a feature. Tracking events is a powerful way to measure how deeply users interact with an app beyond installs.
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Our analysis shows that retargeted users consistently deliver higher event volumes compared to users acquired through new UA campaigns:
- Day 1 post-Install: Retargeted users triggered 86 aggregated events per user, compared to 44 events for newly acquired users—nearly double the activity.
- Week 4: Although overall event counts decline over time for both groups, retargeted users still complete 10 more events per week on average.
This suggests that users who have prior experience with the app are more comfortable engaging with its features immediately, skipping the friction often associated with onboarding.
Retargeted users generate more purchases
A revenue event refers specifically to monetization actions, such as making an in-app purchase (IAP) or subscribing to a premium service.
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In addition to higher general engagement, retargeted users also triggered revenue events at a significantly higher rate than those from new UA.
- Day 1: Retargeted users generated 9% more revenue events than new users immediately after reinstall.
- Day 7: The gap widened significantly, with retargeted users delivering a 49% higher rate of revenue-triggering events.
- Weeks 8 and beyond (pictured on the chart below): Revenue event behaviors between retargeted and new users eventually converged, but retargeted users maintained a strong lead throughout the crucial early period.
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Given the high cost of acquiring a paying user—which can reach and even exceed $100— investing in retargeting campaigns offers an efficient path to increase lifetime value (LTV) while lowering acquisition costs.
If retargeted users make more purchases (at a lower cost of acquisition), not only is spend saved, LTV is increased for retargeted users, making them a much more interesting prospect if you’re not already engaging with your lapsed user base. Of course, for users to become retargeted, they must start out as new users. What this means is that both audiences are important.
By learning from your retargeted cohorts, you can understand what caused churn, what worked in reengaging them, and how you can improve the overall user experience to minimize drop-off in the first place.
Retargeted users have better retention rates
Retention is one of the most critical metrics in mobile app marketing, and it's another area where retargeted users tend to outperform newly acquired users.
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Our analysis of 30-day retention rates revealed:
- Day 1 retention: Retargeted users retained at a 5% higher rate than new users.
- Day 7 retention: The gap remained stable, with retargeted users maintaining a 5% advantage in active usage.
- Weeks 6–8: Although the retention rates of both cohorts begin to converge beyond the initial weeks, retargeted users consistently show stronger loyalty throughout the early stages of the app lifecycle.
This trend highlights the strategic value of reengaging users who already have some familiarity with your app. By reconnecting with this audience, brands can significantly extend the active lifespan of their user base, and by extension, drive more revenue over time.
Building a winning growth strategy with the perfect blend of new UA and retargeting
Our study clearly shows that retargeting plays a crucial role in boosting user engagement, increasing revenue events, and improving early retention rates. By re-engaging users who are already familiar with your app, you can drive higher value while optimizing your marketing spend.
However, it's important to remember that new user acquisition remains fundamental to building a healthy and scalable app business. Without a steady flow of new users entering the funnel, there would be no audience to later re-engage.
A successful mobile growth strategy depends on finding the right balance of investing in acquisition to expand your user base and reach new audiences, and implementing retargeting to maximize the value of every install, drive loyalty, and increase LTV.
By strategically combining UA and re-engagement efforts, marketers and developers can create a more sustainable, profitable growth engine for their apps.
To learn more about how Adjust can support your user acquisition and retargeting strategy and grow your app business, request a demo today.
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