Under the Radar

00:00:00 ◼   ► welcome to under the radar a show but

00:00:02 ◼   ► independent iOS app development I'm

00:00:04 ◼   ► Marco Arment and I'm David Smith under

00:00:06 ◼   ► the radar is never longer within 30

00:00:07 ◼   ► minutes so let's get started so Apple

00:00:10 ◼   ► launched their search ads program last

00:00:12 ◼   ► fall in the App Store and a lot of

00:00:15 ◼   ► developers I think us included didn't

00:00:16 ◼   ► really know what to make of it at first

00:00:18 ◼   ► it we were it certainly was a little bit

00:00:20 ◼   ► intimidating a little bit off-putting

00:00:22 ◼   ► the idea that we'd have to pay to have

00:00:26 ◼   ► our ads shown at the top of the search

00:00:28 ◼   ► results in the App Store and we've now

00:00:30 ◼   ► had a lot of time I've actually been

00:00:32 ◼   ► using search ads for overcast since the

00:00:35 ◼   ► day they launched and I'm still using

00:00:37 ◼   ► them today it's a little bit back in the

00:00:39 ◼   ► news now because yesterday Apple

00:00:41 ◼   ► launched I think by surprise for most of

00:00:44 ◼   ► us Apple launched a new search ads basic

00:00:47 ◼   ► which is a version of search ads that is

00:00:51 ◼   ► so far us only but they said it's going

00:00:53 ◼   ► to expand to the rest of the world and

00:00:54 ◼   ► that's where that's where the ads show

00:00:56 ◼   ► up not who can buy them so if you're a

00:00:58 ◼   ► developer outside the US you can buy

00:00:59 ◼   ► these ads but they will they will only

00:01:01 ◼   ► start showing in the US App Store for at

00:01:03 ◼   ► first but anyway so now they have search

00:01:05 ◼   ► ads basic and the old one has renamed

00:01:07 ◼   ► search ads advanced I think it's worth

00:01:10 ◼   ► discussing now that we had you know at

00:01:12 ◼   ► least from from my perspective and and

00:01:14 ◼   ► from yours David to you know to the

00:01:15 ◼   ► extent that you've used it now that we

00:01:17 ◼   ► have almost I have over a year now of

00:01:19 ◼   ► search ad data it has slowly expanded

00:01:22 ◼   ► from initially the main offer it was

00:01:24 ◼   ► also us only and then it expanded over

00:01:26 ◼   ► the last maybe six months or so to a few

00:01:30 ◼   ► to other different marketplaces now you

00:01:31 ◼   ► can have Canada UK Australia Switzerland

00:01:35 ◼   ► and New Zealand and it's a little bit

00:01:39 ◼   ► cumbersome to manage them all honestly

00:01:40 ◼   ► but I think I've come up with a number

00:01:42 ◼   ► of key insights and and best practices

00:01:45 ◼   ► that might be useful to share what's

00:01:46 ◼   ► your experience with them because you I

00:01:47 ◼   ► mean you have way more apps than I do

00:01:50 ◼   ► because like all I can say is what what

00:01:53 ◼   ► my experience has been with my single

00:01:54 ◼   ► app and it's a free app so it's gonna be

00:01:56 ◼   ► different than paid up front apps and

00:01:57 ◼   ► its affiliate it's you know fairly

00:01:59 ◼   ► popular among certain people so that's

00:02:01 ◼   ► gonna be different from an app that's

00:02:02 ◼   ► totally unknown have you had have you

00:02:04 ◼   ► had more diverse experience than I have

00:02:06 ◼   ► with this a little bit so like I've

00:02:08 ◼   ► tried tried well I've tried a variety of

00:02:11 ◼   ► different campaigns

00:02:13 ◼   ► and things with this I tried it for my

00:02:15 ◼   ► paid apps for my free apps and overall

00:02:20 ◼   ► like my experience is like in aggregate

00:02:22 ◼   ► is just very mixed I would say like some

00:02:25 ◼   ► of the time it it seems to work and pay

00:02:28 ◼   ► off sometimes it really doesn't like and

00:02:30 ◼   ► the thing that I struggle with the most

00:02:32 ◼   ► with these is trying to it's like

00:02:35 ◼   ► there's initially like the obvious naive

00:02:39 ◼   ► like reaction to something like

00:02:41 ◼   ► advertising

00:02:42 ◼   ► he's viewing it as a in a weird way

00:02:47 ◼   ► almost like a direct investment where

00:02:48 ◼   ► like I'm I take this amount of money I

00:02:51 ◼   ► put it into this and then I expect to

00:02:52 ◼   ► get a certain amount hopefully a greater

00:02:54 ◼   ► amount back and that was straightforward

00:02:58 ◼   ► especially for like my paid apps for

00:03:00 ◼   ► example where like it's very

00:03:01 ◼   ► straightforward that like search ads are

00:03:03 ◼   ► based on the cost for install and if

00:03:06 ◼   ► it's a paid app the you know like my

00:03:08 ◼   ► revenue per install is you know after a

00:03:11 ◼   ► so whatever you know 70% of whatever the

00:03:13 ◼   ► purchase price is and I could go in and

00:03:15 ◼   ► say like I'm will be essentially willing

00:03:17 ◼   ► to break even say for all of these app

00:03:20 ◼   ► installs and I try that for a little bit

00:03:22 ◼   ► but in general that didn't seem to work

00:03:26 ◼   ► at a very high volume anyway where I

00:03:30 ◼   ► would it's like I could I would get a

00:03:32 ◼   ► some amount of install in traffic but it

00:03:35 ◼   ► didn't seem like I was paying enough for

00:03:38 ◼   ► those installs that mads are being shown

00:03:41 ◼   ► very often I better Mayo my terms are

00:03:43 ◼   ► very low volume or whatever but it

00:03:44 ◼   ► didn't seem like it one of these things

00:03:46 ◼   ► that's like great you know I can spend a

00:03:48 ◼   ► dollar and get a double you know a

00:03:50 ◼   ► dollar forty back but I can only have

00:03:54 ◼   ► three or four transactions a day that

00:03:56 ◼   ► are doing that and so it's like well

00:03:57 ◼   ► that's that's like net positive but not

00:04:01 ◼   ► particularly interesting so I had that

00:04:03 ◼   ► experience on the paid side and then on

00:04:05 ◼   ► the free side it's so because it's so

00:04:08 ◼   ► hard to sort of have this feeling of

00:04:10 ◼   ► what an install is worth and I pursued

00:04:13 ◼   ► it a little bit but at the end it kind

00:04:15 ◼   ► of felt like I was just sort of throwing

00:04:16 ◼   ► money away or at least putting money

00:04:18 ◼   ► into something that was so hard for me

00:04:20 ◼   ► to quantify but over time I just sort of

00:04:23 ◼   ► backed away from it and decided that's

00:04:25 ◼   ► like

00:04:25 ◼   ► you know it's okay and I'm probably

00:04:29 ◼   ► helped a little bit in this that my most

00:04:31 ◼   ► important apps tend to have reasonably

00:04:34 ◼   ► good just general search optimization or

00:04:39 ◼   ► whatever like they show up fairly high

00:04:40 ◼   ► anyway and so that helps a lot for not

00:04:44 ◼   ► needing this necessarily because it's

00:04:46 ◼   ► you know I'm now the second say CAF I

00:04:49 ◼   ► was previously like the top results for

00:04:51 ◼   ► a search you know with the now with ads

00:04:52 ◼   ► I'm the second result because the first

00:04:54 ◼   ► one the paid result is going to always

00:04:56 ◼   ► be on top but you know at least being on

00:04:58 ◼   ► that first screen is probably useful

00:05:01 ◼   ► enough but yeah I don't know I won't go

00:05:04 ◼   ► back and forth on how useful they are

00:05:05 ◼   ► and then in the back of my mind I kind

00:05:07 ◼   ► of feel like I'm probably missing this

00:05:12 ◼   ► or in some ways like the funders the

00:05:14 ◼   ► fundamental like realities of

00:05:16 ◼   ► advertising where I'm sure if you were a

00:05:18 ◼   ► just like a typical bit like a larger

00:05:22 ◼   ► brand advertiser like your goal is not

00:05:24 ◼   ► necessarily like direct net positive

00:05:28 ◼   ► cash flow from each advertising by it's

00:05:30 ◼   ► a much more broad something that you're

00:05:32 ◼   ► just you're taking this it's like you

00:05:34 ◼   ► have a marketing budget that whose

00:05:36 ◼   ► purpose is to just increase brand

00:05:38 ◼   ► awareness and to increase usage of the

00:05:40 ◼   ► app as this kind of more general concept

00:05:43 ◼   ► in some ways even kind of like per

00:05:45 ◼   ► conversation a couple episodes ago where

00:05:47 ◼   ► I was talking about why I'm making

00:05:48 ◼   ► workouts plus plus free where it's like

00:05:50 ◼   ► there's this general value to being

00:05:54 ◼   ► well-known beyond the immediate like

00:05:58 ◼   ► huge sort of return on that investment

00:06:00 ◼   ► in the less you see within a few days

00:06:03 ◼   ► and so I go back and forth and if I'm

00:06:06 ◼   ► just like doing it wrong or not but I

00:06:08 ◼   ► don't know my experience has been kind

00:06:09 ◼   ► of mixed and mostly I've kind of backed

00:06:12 ◼   ► away with it I'm gonna try the new

00:06:13 ◼   ► basics approach like just to see if

00:06:16 ◼   ► there's anything interesting there and I

00:06:18 ◼   ► mean Apple it's giving us $100 free

00:06:20 ◼   ► credit so like great you know sure I'll

00:06:23 ◼   ► take that hundred dollars and spend it

00:06:24 ◼   ► but overall I'm still kind of mixed

00:06:27 ◼   ► about it I think you know a lot of

00:06:29 ◼   ► developers didn't give it a fair shot

00:06:31 ◼   ► when it first launched because we felt

00:06:34 ◼   ► kind of put out put off by it or kind of

00:06:36 ◼   ► like you know like it was a trick or an

00:06:38 ◼   ► egg

00:06:39 ◼   ► thing for Apple to be doing I think we

00:06:42 ◼   ► have there there's kind of two parts of

00:06:44 ◼   ► that argument that are that are worth I

00:06:46 ◼   ► think internalizing now number one is

00:06:47 ◼   ► that well it's done

00:06:49 ◼   ► it's it's clearly here to stay they are

00:06:51 ◼   ► not only keeping it but expanding it so

00:06:53 ◼   ► I think that that ship has sailed much

00:06:56 ◼   ► like initially when we brought mad that

00:06:58 ◼   ► a preview was a thing when the AppStore

00:06:59 ◼   ► first launched that ship has sailed and

00:07:02 ◼   ► so has this one so you might as well get

00:07:04 ◼   ► on board with at least being okay with

00:07:06 ◼   ► it existing even if you decide not to

00:07:08 ◼   ► participate or net you know you should

00:07:09 ◼   ► at least realize that this is if this is

00:07:11 ◼   ► now a factor in the AppStore that's

00:07:12 ◼   ► that's probably here to stay um and and

00:07:15 ◼   ► number two while it does feel pretty bad

00:07:18 ◼   ► to pay to reach people you were already

00:07:22 ◼   ► who are already seeking you out so like

00:07:24 ◼   ► if somebody searches the App Store for

00:07:26 ◼   ► overcast someone else is that is gonna

00:07:28 ◼   ► be up top there if they outbid me on

00:07:30 ◼   ► that keyword that day probably audible

00:07:32 ◼   ► but someone else is that is gonna be up

00:07:34 ◼   ► there and it's probably gonna be a

00:07:36 ◼   ► bigger company than me and I'm gonna

00:07:38 ◼   ► feel kind of like that's a little bit

00:07:40 ◼   ► unfair but the reality is that could

00:07:43 ◼   ► also be a smaller company than may that

00:07:44 ◼   ► could also be an indie startup who wants

00:07:46 ◼   ► to get into the same market I'm in and

00:07:48 ◼   ► wants to have a chance at paying to take

00:07:52 ◼   ► away some of those searches from me and

00:07:53 ◼   ► I'm doing the same thing I'm bidding on

00:07:57 ◼   ► generic terms like podcast but I'm also

00:08:00 ◼   ► bidding on terms like audible because

00:08:02 ◼   ► you know I'm trying to get some of the

00:08:04 ◼   ► same some of that same audience and

00:08:05 ◼   ► search ads largely have worked for me

00:08:09 ◼   ► and so it is the kind of thing where you

00:08:13 ◼   ► can still promote an app for free

00:08:16 ◼   ► through traditional PR channels and

00:08:18 ◼   ► marketing channels and you probably

00:08:19 ◼   ► should but this in a way gives an

00:08:22 ◼   ► opportunity for small apps to get seen

00:08:26 ◼   ► in some way and get started and yes of

00:08:29 ◼   ► course it does take money and therefore

00:08:31 ◼   ► that will price out a lot of developers

00:08:33 ◼   ► but if you manage it responsibly and

00:08:37 ◼   ► conservatively upfront it doesn't have

00:08:40 ◼   ► to take that much money and you and if

00:08:41 ◼   ► you if you luck out with your terms and

00:08:45 ◼   ► if you control it well enough you can

00:08:46 ◼   ► actually make it profitable per user so

00:08:49 ◼   ► this leads into I think the first major

00:08:51 ◼   ► Challenge of using search ads which is

00:08:54 ◼   ► you have to know what a user is worth to

00:08:56 ◼   ► you and that's very hard to do if your

00:08:58 ◼   ► app is not paid upfront if there's any

00:09:00 ◼   ► more complex business model than paid

00:09:03 ◼   ► upfront and honestly I don't think paid

00:09:06 ◼   ► upfront has worked that well in search

00:09:07 ◼   ► ads because you don't pay per install

00:09:09 ◼   ► you pay per tap on the ad so the the

00:09:15 ◼   ► cost per install varies depending on how

00:09:18 ◼   ► many people tap your ad and then decide

00:09:20 ◼   ► not to buy it or not to download it and

00:09:22 ◼   ► so that can obviously vary based on

00:09:24 ◼   ► things like your screenshot your

00:09:25 ◼   ► description your ratings but also I

00:09:27 ◼   ► think if you have a a price there of an

00:09:30 ◼   ► upfront price I have I would guess that

00:09:33 ◼   ► causes much lower buy through rates or

00:09:36 ◼   ► you know conversion rates from from the

00:09:39 ◼   ► tap to the purchase then a free app

00:09:42 ◼   ► would and so that's gonna dramatically

00:09:44 ◼   ► affect your cost right there so you know

00:09:47 ◼   ► if you're paid upfront I think I think

00:09:48 ◼   ► it's easier to calculate what an install

00:09:51 ◼   ► is worth to you but it's also harder to

00:09:53 ◼   ► get those installs so I'm gonna now

00:09:55 ◼   ► focus for the rest of my discussion of

00:09:56 ◼   ► this on free versions on free apps

00:09:59 ◼   ► upfront because that's what I know

00:10:00 ◼   ► that's what I have and I think that's

00:10:02 ◼   ► gonna be mostly what search ads are good

00:10:04 ◼   ► for because there's just that one less

00:10:07 ◼   ► big barrier to entry for people to to

00:10:09 ◼   ► who are learning about it for the first

00:10:10 ◼   ► time through that ad to then click there

00:10:12 ◼   ► and download it so the question then

00:10:15 ◼   ► becomes how do you value a user if your

00:10:18 ◼   ► app is free upfront so if you have a

00:10:20 ◼   ► scheme like I do which you know I think

00:10:22 ◼   ► at least part of this is common if not

00:10:24 ◼   ► it's not the whole thing where I have

00:10:26 ◼   ► ads in the app and I get paid for those

00:10:28 ◼   ► ads and I have an in-app purchase that

00:10:31 ◼   ► can be optionally bought to remove the

00:10:33 ◼   ► ads and add some premium stuff but

00:10:34 ◼   ► mostly it's removing the ads and I you

00:10:36 ◼   ► know people I think this is common

00:10:38 ◼   ► enough that I can tell you some lessons

00:10:40 ◼   ► I've learned from this number one when

00:10:42 ◼   ► you're trying to figure out what each

00:10:44 ◼   ► user is worth to you you have to make

00:10:47 ◼   ► some assumptions that might be

00:10:48 ◼   ► uncomfortable or cruel or or revealing

00:10:51 ◼   ► for instance what percentage of people

00:10:54 ◼   ► who download your app will actually ever

00:10:56 ◼   ► launch it that's a big it's not a

00:10:58 ◼   ► hundred percent newsflash if this yeah

00:11:00 ◼   ► if you've worked aware of this yet you

00:11:02 ◼   ► know and if you already have some

00:11:04 ◼   ► analytics in your app you probably are

00:11:05 ◼   ► no this kind of thing but yeah it's not

00:11:07 ◼   ► a hundred percent that might you know

00:11:09 ◼   ► you might get two thirds or eighty

00:11:11 ◼   ► percent or something like that like it

00:11:12 ◼   ► might be or half it might not be a very

00:11:14 ◼   ► very kind ratio of people who actually

00:11:17 ◼   ► ever launched the app after downloading

00:11:18 ◼   ► it and then after that you have to then

00:11:22 ◼   ► work through like if you're valuing the

00:11:24 ◼   ► user based on the likelihood that

00:11:26 ◼   ► they're going to buy an in-app purchase

00:11:28 ◼   ► or whether they're going to see your ads

00:11:30 ◼   ► or follow through any other kind of

00:11:32 ◼   ► monetization what other barriers are

00:11:34 ◼   ► there between getting the app and

00:11:37 ◼   ► running the app and getting to that

00:11:38 ◼   ► point where they're making you money do

00:11:39 ◼   ► they have to create an account

00:11:41 ◼   ► do they have to sign in do they have to

00:11:43 ◼   ► you know enter some data and all those

00:11:45 ◼   ► steps are gonna reduce that percentage

00:11:47 ◼   ► even further of how many of those

00:11:48 ◼   ► downloaders actually make it to the part

00:11:51 ◼   ► of the app that makes you money not to

00:11:53 ◼   ► mention the fact that once they get you

00:11:55 ◼   ► know assuming they're actually using it

00:11:56 ◼   ► then you have the question of what

00:11:59 ◼   ► percentage of actual users will then by

00:12:02 ◼   ► the end up purchase or if it's ad based

00:12:04 ◼   ► what percentage of them will see the ads

00:12:06 ◼   ► and then you and ads have another

00:12:08 ◼   ► massive complex guess that you have to

00:12:11 ◼   ► make or data you have to collect which

00:12:13 ◼   ► is how long will each person be using my

00:12:16 ◼   ► app you know will the average user use

00:12:18 ◼   ► it for a day a year ten years like we so

00:12:22 ◼   ► those numbers can dramatically change

00:12:24 ◼   ► what you think a user is worth and I

00:12:28 ◼   ► would urge you that if you don't know

00:12:30 ◼   ► this number you know if if you are

00:12:31 ◼   ► making estimates and guesses on a lot of

00:12:34 ◼   ► these numbers which you might have to

00:12:35 ◼   ► you know if you if you don't have really

00:12:36 ◼   ► good really creepy analytics like I

00:12:39 ◼   ► don't you have to guess and a lot of

00:12:40 ◼   ► these numbers or just wait and see the

00:12:42 ◼   ► results and for me I found that guess

00:12:46 ◼   ► very conservatively on these numbers

00:12:48 ◼   ► like every step of the way that might

00:12:50 ◼   ► reduce the amount of users that get to

00:12:53 ◼   ► the next stage cut it in half like

00:12:55 ◼   ► really like be very aggressive like just

00:12:58 ◼   ► assume half the downloads will result in

00:13:00 ◼   ► launches reassume that half of the

00:13:02 ◼   ► launches will result in in accounts

00:13:04 ◼   ► being created or you know signups

00:13:06 ◼   ► happening or proceeding to the next step

00:13:08 ◼   ► and so these numbers starts to start

00:13:10 ◼   ► said you know divide out and math starts

00:13:12 ◼   ► catching up to you pretty soon and so

00:13:15 ◼   ► you have to be very very careful when

00:13:17 ◼   ► making any kind of assumption

00:13:19 ◼   ► about what a user is worth to you

00:13:21 ◼   ► long-term and keep in mind that

00:13:23 ◼   ► long-term might really be a day for a

00:13:25 ◼   ► lot for the majority of your users

00:13:28 ◼   ► it like your average duration of how

00:13:30 ◼   ► long a user sticks with your app might

00:13:31 ◼   ► be a day or a week or something pretty

00:13:33 ◼   ► short so you can't for instance assume

00:13:36 ◼   ► like eat that you have like six months

00:13:38 ◼   ► or a year of ad revenue to attribute to

00:13:40 ◼   ► that download cuz you probably don't the

00:13:42 ◼   ► nice thing though is we do get a lot of

00:13:44 ◼   ► those numbers now from app analytics and

00:13:45 ◼   ► iTunes Connect that's true yeah like at

00:13:47 ◼   ► least we do have a better starting place

00:13:50 ◼   ► then like you don't necessarily need the

00:13:53 ◼   ► creepy analytics for a lot of that kind

00:13:55 ◼   ► of stuff cuz I'm just thinking like with

00:13:56 ◼   ► the things that we get from there or

00:13:58 ◼   ► like we get AG a retention percent which

00:14:02 ◼   ► is a really useful measure for being

00:14:03 ◼   ► able to get a sense of like you know so

00:14:06 ◼   ► once someone has downloaded the app what

00:14:09 ◼   ► is it like you know what percentage of

00:14:10 ◼   ► those people will down open it the next

00:14:11 ◼   ► day and what person will open it a week

00:14:14 ◼   ► later two weeks later three weeks later

00:14:16 ◼   ► and they go up to 28 days and so at that

00:14:19 ◼   ► point you get a sense of like what's

00:14:20 ◼   ► your retention you look curve looks like

00:14:23 ◼   ► there and so at least you can kind of

00:14:25 ◼   ► get you know infer that you know it if

00:14:28 ◼   ► your retention is kind of flattened out

00:14:30 ◼   ► by the time you're a month out like we

00:14:32 ◼   ► won't you've probably gotten that user

00:14:33 ◼   ► if you're still you know whatever it is

00:14:35 ◼   ► say you have you ten percent retention

00:14:36 ◼   ► after a month it's like you probably

00:14:38 ◼   ► have them for that but even if you just

00:14:40 ◼   ► capped it at a month and tried to work

00:14:42 ◼   ► out you know how many sessions does the

00:14:46 ◼   ► wooly user have you know if they if ten

00:14:50 ◼   ► percent of them are there after at the

00:14:52 ◼   ► end of a month and maybe twenty percent

00:14:54 ◼   ► of them are there after a week you know

00:14:56 ◼   ► you can kind of do a little bit of math

00:14:57 ◼   ► but yes it's it's it is a really tricky

00:14:59 ◼   ► thing I think being conservative here

00:15:01 ◼   ► makes is by far the better way to air on

00:15:04 ◼   ► because it's far more important for it

00:15:06 ◼   ► to just be a reasonable number than it

00:15:08 ◼   ► is for it to be an exact number exactly

00:15:11 ◼   ► and all this by the way this is all

00:15:13 ◼   ► making a pretty big assumption all this

00:15:16 ◼   ► advice so far that you don't want to

00:15:18 ◼   ► lose money on each installation but

00:15:21 ◼   ► there are types of businesses and apps

00:15:22 ◼   ► and situations where that might not be

00:15:23 ◼   ► the case you might actually want to lose

00:15:25 ◼   ► money on or you already might you might

00:15:28 ◼   ► be willing to lose money on every

00:15:30 ◼   ► installation

00:15:32 ◼   ► maybe it's only a little bit of money or

00:15:34 ◼   ► if you're you if you have a plan to make

00:15:36 ◼   ► it up down the road or if you really

00:15:37 ◼   ► want to just focus on growth of user

00:15:39 ◼   ► base right now or if you haven't

00:15:41 ◼   ► monetized yet if you're like you know a

00:15:43 ◼   ► start-up that's pre monetization

00:15:44 ◼   ► strategy and you just want growth you

00:15:46 ◼   ► know so you might have reasons where you

00:15:48 ◼   ► don't care about whether you're gonna

00:15:49 ◼   ► make up the you know make it up properly

00:15:51 ◼   ► you know on the other side or not or you

00:15:53 ◼   ► just might be betting for your future in

00:15:54 ◼   ► bidding you know what I can take a small

00:15:57 ◼   ► loss on each user right now but some

00:15:59 ◼   ► percentage of these users will tell

00:16:01 ◼   ► their friends and spread the app and

00:16:02 ◼   ► cause my organic installations to go up

00:16:04 ◼   ► so it's it's very very vague and based

00:16:08 ◼   ► on a lot of estimates and assumptions

00:16:10 ◼   ► that this is true of all advertising on

00:16:12 ◼   ► all sides it's for everything so all

00:16:15 ◼   ► this to say like you know try to

00:16:18 ◼   ► quantify some of these numbers try to

00:16:20 ◼   ► make good estimates to try to have as

00:16:21 ◼   ► much data as you can to to make good

00:16:22 ◼   ► decisions here but your decisions might

00:16:25 ◼   ► not have the same you know needs as

00:16:27 ◼   ► someone else's anyway before I get into

00:16:30 ◼   ► specifics of what I do in the App Store

00:16:31 ◼   ► and with app search ads we are brought

00:16:33 ◼   ► to you this week by Eero this is another

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00:18:51 ◼   ► wanted to go into a little bit more

00:18:52 ◼   ► specifics of how to optimize search ads

00:18:54 ◼   ► on the App Store now that you know

00:18:57 ◼   ► roughly what you want to spend per

00:18:59 ◼   ► installation because you figure that

00:19:01 ◼   ► during my ad read I guess I don't know

00:19:02 ◼   ► you figured it out sometimes well assume

00:19:03 ◼   ► you have that number oh did the math

00:19:05 ◼   ► yeah yeah well uh flea what you're able

00:19:07 ◼   ► to spend per installation you know it's

00:19:10 ◼   ► worth now learning kind of how the

00:19:12 ◼   ► system works so the main thing with with

00:19:15 ◼   ► search ads is that it's dependent very

00:19:17 ◼   ► very heavily on Apple's own App Store

00:19:19 ◼   ► relevancy engine and as we know for App

00:19:24 ◼   ► Store search it's not that good it's you

00:19:27 ◼   ► know it works on a fairly coarse level

00:19:30 ◼   ► but there's a lot of mismatches a lot of

00:19:33 ◼   ► misjudgment of relevancy ranking isn't

00:19:36 ◼   ► so great and this applies therefore to

00:19:39 ◼   ► the search ads matching algorithm as

00:19:41 ◼   ► well so you need to do some tailoring

00:19:43 ◼   ► and you need to know that going into it

00:19:45 ◼   ► that the relevancy matching is not very

00:19:47 ◼   ► strong and is you know therefore that

00:19:51 ◼   ► could work for or against you if you

00:19:52 ◼   ► know your app might rank weirdly high or

00:19:55 ◼   ► really low one thing Apple has done

00:19:57 ◼   ► which i think is a smart move

00:19:59 ◼   ► is and it's and Phil announced us on

00:20:01 ◼   ► stage when they announced search ads or

00:20:02 ◼   ► whatever that was but the idea is that

00:20:06 ◼   ► even if you bid a high enough price if

00:20:09 ◼   ► Apple's algorithm deems your app not

00:20:12 ◼   ► relevant to a query it will not include

00:20:14 ◼   ► it no matter what no matter what you bid

00:20:16 ◼   ► and this is good because this prevents

00:20:18 ◼   ► something like clash of clans bidding on

00:20:20 ◼   ► the term podcast because it might be

00:20:22 ◼   ► could be becoming a high-volume term and

00:20:24 ◼   ► they want to get it on that even though

00:20:25 ◼   ► their app is not relevant to podcast at

00:20:26 ◼   ► all you know so that's actually a very

00:20:28 ◼   ► good prohibition the downside of that is

00:20:30 ◼   ► that if the search algorithm guess is

00:20:33 ◼   ► wrong on whether your app is relevant

00:20:34 ◼   ► you could be on the wrong side of that

00:20:36 ◼   ► so something to keep in mind there's not

00:20:38 ◼   ► much you can do about that unfortunately

00:20:40 ◼   ► but that is nice to know that that's a

00:20:42 ◼   ► thing when you are picking your keywords

00:20:45 ◼   ► I have found that it's best to mostly

00:20:49 ◼   ► just do search match that if you do too

00:20:51 ◼   ► much keyword selection you can get weird

00:20:54 ◼   ► results if you do search match you're

00:20:56 ◼   ► kind of letting Apple do it for you and

00:20:58 ◼   ► this is actually so when they long

00:21:00 ◼   ► gesture day long search ads basic that's

00:21:02 ◼   ► all it is as far as I can as far as I

00:21:04 ◼   ► can tell it seems like it is a search

00:21:05 ◼   ► match only ad account is that is that

00:21:09 ◼   ► right yeah you just give it a budget and

00:21:11 ◼   ► a maximum cost per install like those

00:21:14 ◼   ► are the only two numbers you put in

00:21:16 ◼   ► mm-hmm and then it just does the rest

00:21:17 ◼   ► it'll do it'll try and find you whatever

00:21:20 ◼   ► the best opportunities are and you know

00:21:25 ◼   ► sort of do its own thing but you have no

00:21:27 ◼   ► visibility into what those terms are or

00:21:30 ◼   ► anything like that it's just you just

00:21:32 ◼   ► give it it basically you just tell it

00:21:33 ◼   ► how much money overall are you gonna

00:21:35 ◼   ► give to give to this campaign and then

00:21:37 ◼   ► how much what's the maximum amount that

00:21:39 ◼   ► you're willing to pay for an install and

00:21:41 ◼   ► then it just does the rest for you the

00:21:44 ◼   ► only thing about that I will say that

00:21:45 ◼   ► then this is why I'm a little bit

00:21:47 ◼   ► worried about search that's basic is

00:21:48 ◼   ► that one of the great things about the

00:21:50 ◼   ► search ads implementation in the

00:21:52 ◼   ► Advanced Mode that used to be the only

00:21:54 ◼   ► mode until yesterday is that you can go

00:21:56 ◼   ► in so run it for like a few weeks you

00:21:58 ◼   ► know with you know or whatever time you

00:22:00 ◼   ► want you know run it for a little while

00:22:02 ◼   ► and then you can go in to the reporting

00:22:04 ◼   ► areas and you can see if you go to if

00:22:07 ◼   ► you go within the ad group you go to a

00:22:09 ◼   ► tab called search terms and it will list

00:22:11 ◼   ► the term

00:22:13 ◼   ► people actually use to search your app

00:22:15 ◼   ► and you can rank that by things like

00:22:17 ◼   ► conversion rate or average cost per

00:22:20 ◼   ► installation which they say it's CPA

00:22:22 ◼   ► cost per action in the advertising world

00:22:24 ◼   ► but it's a cost per installation and so

00:22:26 ◼   ► you can you can sort and rank the

00:22:28 ◼   ► keyword people are actually using that

00:22:29 ◼   ► Apple is matching to you

00:22:31 ◼   ► you know for you and you can see like

00:22:33 ◼   ► you know certain ones are gonna be are

00:22:35 ◼   ► gonna be better than others in terms of

00:22:36 ◼   ► what you're actually spending for those

00:22:37 ◼   ► users what percentage of them are

00:22:39 ◼   ► actually installing your app etc and if

00:22:42 ◼   ► you see the keywords like I'll you know

00:22:45 ◼   ► I'll tell you like some of mine like I

00:22:45 ◼   ► started out as so if I sort by spend

00:22:48 ◼   ► which is the the amount of money you

00:22:50 ◼   ► have spent on it for that time interval

00:22:51 ◼   ► my first one is podcast which is good

00:22:55 ◼   ► that is my most expensive one but that's

00:22:56 ◼   ► also my highest Volume one and I'm

00:22:57 ◼   ► bidding high on that because I want I

00:22:59 ◼   ► want to get those people who are

00:23:00 ◼   ► searching for podcast then there's low

00:23:03 ◼   ► volume terms just kind of their bucket

00:23:04 ◼   ► for everything else that's too small to

00:23:05 ◼   ► matter then I have things like podcast

00:23:08 ◼   ► app for iPhone great that's what I want

00:23:10 ◼   ► the next one down is FM transmitter well

00:23:14 ◼   ► I'm not sure I want that one that's

00:23:17 ◼   ► that's not that relevant and sure enough

00:23:19 ◼   ► FM transmitter has a way lower

00:23:21 ◼   ► conversion rate than the other ones so I

00:23:24 ◼   ► have to decide like is this actually do

00:23:27 ◼   ► I actually wanna be paying for people

00:23:28 ◼   ► who search for FM transmitter and if you

00:23:30 ◼   ► don't one thing you can do in searched

00:23:32 ◼   ► in search ads advanced is you can you

00:23:35 ◼   ► can go through this list you can check

00:23:36 ◼   ► off whichever ones you don't think are

00:23:38 ◼   ► worth bidding on that are not relevant

00:23:40 ◼   ► enough and you can say add as negative

00:23:43 ◼   ► keywords and if you say exact match then

00:23:45 ◼   ► which you probably should do then it'll

00:23:48 ◼   ► it will not put you on those bids and

00:23:50 ◼   ► that I have found is a necessary part if

00:23:54 ◼   ► you're gonna do search match if you're

00:23:55 ◼   ► not gonna just put on the exact key

00:23:57 ◼   ► which if you're gonna do any search

00:23:57 ◼   ► matching at all on the App Store you

00:24:00 ◼   ► must go in and add as negative keywords

00:24:03 ◼   ► the things that are not relevant to your

00:24:05 ◼   ► app that are costing you a lot of money

00:24:06 ◼   ► and my might because you know because

00:24:09 ◼   ► Apple's relevancy engine isn't that

00:24:11 ◼   ► great you get a lot of these and some of

00:24:14 ◼   ► them you actually might want so like one

00:24:16 ◼   ► of the very common ones that I get is

00:24:18 ◼   ► things like music player without Wi-Fi

00:24:22 ◼   ► free music downloader offline music

00:24:24 ◼   ► player FM radio offline

00:24:27 ◼   ► and I'm like well actually those are

00:24:29 ◼   ► people who want to listen to stuff

00:24:31 ◼   ► offline some of which is radio so I

00:24:34 ◼   ► think I actually might want to keep

00:24:36 ◼   ► bidding on a lot of those whereas one of

00:24:38 ◼   ► them over watch I don't want to bid on

00:24:41 ◼   ► because that's a video game there's

00:24:43 ◼   ► nothing to do with my app and it's being

00:24:44 ◼   ► matched by some kind of linguistic

00:24:45 ◼   ► coincidence and I definitely don't want

00:24:48 ◼   ► to bet on overwatch terms so I

00:24:50 ◼   ► definitely add that as a negative

00:24:51 ◼   ► keyword but again keep in mind that

00:24:54 ◼   ► you're dealing with a fairly low

00:24:57 ◼   ► sophistication search algorithm and

00:24:59 ◼   ► relevancy algorithm so be careful one of

00:25:01 ◼   ► the reasons I said only add negative

00:25:03 ◼   ► keywords as exact match is that earlier

00:25:06 ◼   ► in the summer I had a problem where I

00:25:07 ◼   ► had added too many things to negative

00:25:09 ◼   ► keywords as like regular like broad

00:25:12 ◼   ► match like relevancy match thinking that

00:25:15 ◼   ► was what I think to do and I started

00:25:16 ◼   ► getting matched on very very few things

00:25:18 ◼   ► I'm all of my numbers just plummeted and

00:25:20 ◼   ► I contacted the search as team and

00:25:22 ◼   ► they're they're very nice there's actual

00:25:23 ◼   ► humans there who will like help you out

00:25:24 ◼   ► and they ran amongst numbers and they

00:25:26 ◼   ► recommended that I like remove some of

00:25:27 ◼   ► those and just switch to a more

00:25:28 ◼   ► relevancy based approach which I did and

00:25:30 ◼   ► and so I would recommend only using

00:25:32 ◼   ► negative keywords and exact match mode

00:25:34 ◼   ► to avoid that situation anyway

00:25:35 ◼   ► I end up you know coming out for for a

00:25:39 ◼   ► long time until the last couple of

00:25:42 ◼   ► months I have come out ahead in what I

00:25:46 ◼   ► believe a user to my app is worth versus

00:25:48 ◼   ► what I'm paying per install from the

00:25:50 ◼   ► search ads and the search ads have made

00:25:52 ◼   ► up approximately 10 to 15% of my weekly

00:25:58 ◼   ► installs and so that's not bad that's a

00:26:01 ◼   ► lot yeah exactly and that's 10 to 15

00:26:04 ◼   ► percent of my installs per week so you

00:26:06 ◼   ► know that that increases over time and

00:26:09 ◼   ► like those users are you know sticking

00:26:11 ◼   ► with the app I think I don't know there

00:26:12 ◼   ► actually is an API somewhere in

00:26:15 ◼   ► somewhere in iOS there's an API where

00:26:17 ◼   ► you can attribute installations to your

00:26:20 ◼   ► app to whether they came from search ads

00:26:22 ◼   ► or not and I think even what keywords

00:26:24 ◼   ► they came from and then you can tell in

00:26:26 ◼   ► your app analytics like what those

00:26:27 ◼   ► people are worth to you I have not done

00:26:29 ◼   ► that that seems a little bit too fiddly

00:26:31 ◼   ► for me I don't think I really care that

00:26:33 ◼   ► deeply and it's a little bit creepy I

00:26:35 ◼   ► think but but so I haven't done that but

00:26:37 ◼   ► you can do that and you can get into you

00:26:39 ◼   ► know deeper measurements but

00:26:40 ◼   ► I have found for the most part this this

00:26:43 ◼   ► has been worth it for me to do for a

00:26:44 ◼   ► while unfortunately over the last couple

00:26:47 ◼   ► of months the podcast related keywords

00:26:50 ◼   ► have really heated up

00:26:51 ◼   ► thanks audible from like big companies

00:26:54 ◼   ► thanks audible who who don't seem to

00:26:56 ◼   ► have a limit to their budget thanks

00:26:58 ◼   ► audible and so I I'm losing a lot more

00:27:01 ◼   ► bids and I've had to increase my bids if

00:27:03 ◼   ► I want to keep winning them and I'm now

00:27:05 ◼   ► pushing to the point where I'm losing

00:27:06 ◼   ► them a little bit of money on each

00:27:07 ◼   ► install that comes from a search ad and

00:27:09 ◼   ► so so far I've decided well I I kind of

00:27:13 ◼   ► want to wait and see and watch how these

00:27:15 ◼   ► numbers go I I kind of don't want to

00:27:17 ◼   ► give up that 15% so maybe I'm okay

00:27:19 ◼   ► losing a bit of money on those people

00:27:21 ◼   ► because then the other 85% of my users

00:27:23 ◼   ► will make up for it so I'm not entirely

00:27:25 ◼   ► sure I'm gonna do about this long-term

00:27:26 ◼   ► yet but the only reason I've been able

00:27:29 ◼   ► to keep costs under control at all is

00:27:31 ◼   ► because when going in and negative key

00:27:34 ◼   ► wording the searches that are providing

00:27:36 ◼   ► me with really bad conversion rates and

00:27:37 ◼   ► really high cost per install and because

00:27:40 ◼   ► search ads basic does not offer that

00:27:42 ◼   ► ability I do hesitate to recommend it

00:27:44 ◼   ► because I don't think you're gonna get a

00:27:47 ◼   ► lot of control over that kind of thing

00:27:51 ◼   ► and Apple's search relevancy engine is

00:27:53 ◼   ► not good enough that I would trust us to

00:27:55 ◼   ► do it without any intervention for me

00:27:57 ◼   ► what do you think yeah I mean I think

00:28:00 ◼   ► I'm intrigued to go to use the basic

00:28:05 ◼   ► system but mostly insofar as it's an int

00:28:07 ◼   ► because like because it's the only input

00:28:09 ◼   ► I give is with the maximum amount I'm

00:28:11 ◼   ► willing to pay for installation is I

00:28:14 ◼   ► will just put that number low enough

00:28:16 ◼   ► that I feel comfortable with it and

00:28:19 ◼   ► understand that like your approach of

00:28:22 ◼   ► the highly tuned like going in there and

00:28:24 ◼   ► looking at keyword by keyword like

00:28:26 ◼   ► dialing it in you are going to end up

00:28:29 ◼   ► with a better result for the same like

00:28:34 ◼   ► cost per install but it takes a lot of

00:28:37 ◼   ► work and thoughtfulness and so on versus

00:28:40 ◼   ► the approach you're just saying it's

00:28:41 ◼   ► like I'll put that number low and if the

00:28:43 ◼   ► number is so low that it's not getting

00:28:44 ◼   ► high volume okay like that's fine I

00:28:47 ◼   ► didn't have to do much for it but if I

00:28:49 ◼   ► am getting installs from that great and

00:28:52 ◼   ► so I kind of view it as a you

00:28:54 ◼   ► over you what you're doing makes perfect

00:28:56 ◼   ► sense I think it's the ideal way if you

00:28:58 ◼   ► if this is something that you want to

00:28:59 ◼   ► spend time on if you want to in sort of

00:29:01 ◼   ► have it be a focus if not if you're sort

00:29:04 ◼   ► of like me and it just like this is an

00:29:06 ◼   ► interesting kind of more amusement it's

00:29:08 ◼   ► an interest it's a really convenient way

00:29:09 ◼   ► to just kind of like a set it up set it

00:29:12 ◼   ► at a number that you're comfortable with

00:29:13 ◼   ► and then just see what happens and

00:29:15 ◼   ► that's how I expect to proceed from here

00:29:17 ◼   ► well best of luck I do I strongly

00:29:20 ◼   ► encourage everyone to use that free

00:29:21 ◼   ► credit look you might as well they're

00:29:23 ◼   ► giving you a free credit so use it and

00:29:25 ◼   ► see how it goes if you want to be she

00:29:27 ◼   ► talked about it wait until after

00:29:29 ◼   ► everyone else uses theirs then use yours

00:29:30 ◼   ► sure then the price will be lower but

00:29:32 ◼   ► anyway we're out of time this week I

00:29:34 ◼   ► hope this was helpful to you

00:29:35 ◼   ► thanks to listening except thanks

00:29:37 ◼   ► listening everybody and we will talk to

00:29:38 ◼   ► you next week bye