CPA Acquisition Strategies: Social vs. SEM vs. In-App

Social media and search are typically the first stops advertisers consider on their growth marketing journey. They are essential components of any marketing strategy, but reliance on this duopoly alone is risky and cuts your growth potential short. Many companies are still investing heavily in traditional channels like Google and Facebook, even though the big two aren’t delivering the best ROI. Meanwhile, the in-app ecosystem represents a growing opportunity for advertisers, particularly when it comes to reaching consumers through mobile games.

As our partners will be the first to tell you, in-app advertising pays off. According to Rohan Panjiar, Director of Performance Marketing at Winc, Facebook and Google used to account for 60% of their ad budget. Today, that figure is down to 35-40%. Reallocating budget to in-app channels helped Winc get in front of new customers outside of saturated channels, while conversion-based pricing cut down on wasted ad spend — leading the DTC brand to sustainable growth. 

In this post, we’ll break down how social, SEM, and in-app compare — and how they should work together. Here’s an overview of what you’ll learn: 

  • Costs by channel
  • Conversion rates by channel
  • Audiences by channel
  • How social, SEM, and in-app work together

Let’s jump in!

 

Keep CACs in check: Costs by channel

Customer acquisition costs have been steadily rising for years. Serial entrepreneur David Skok has called customer acquisition costs a “startup killer,” and for good reason: The costs of acquisition often turn out to exceed original budget expectations and can even outpace the lifetime value of some customers.

In our 2021 Cost Per Action guide, our marketing strategists analyzed typical CPA costs for Google, Facebook, and our own in-app ad network. The result? In-app costs are considerably lower than ad placement on the more crowded channels:

  • Google AdMob Average Cost Per Action: $90.80
  • Facebook Average Cost Per Action: $18.68
  • Tapjoy Average Cost Per Action: $4.23

In other words, advertisers can fight back against rising CACs by reallocating some of their ad spend away from Google and Facebook in favor of low-risk CPA campaigns. Because CPA models like Tapjoy’s offer performance pricing — you only pay when the desired conversion is achieved — you can test new acquisition channels without blowing up your budget.

 

Make your spend count: Conversion rates by channel

With CACs climbing higher and higher, advertisers need to know that their growth campaigns are getting the desired results. However, conversion rates don’t always justify the ad spend:

  • Google Average CVR: 0.72%
  • Facebook Average CVR: 9.21%
  • Tapjoy Average CVR: 19.87%

It may seem a little paradoxical, but a high CPA is typically the result of a low average CVR on impression-based networks. This dynamic is at play with Google ads, and it’s a key reason advertisers need to diversify their acquisition efforts. One thing is clear: With Tapjoy CPA ads delivering the highest CVR of these options, in-app networks remain a budget-friendly way to meet conversion goals.

 

Go where the competition isn’t: Audiences by channel

One of the biggest benefits of the in-app ecosystem is that it’s significantly less crowded than the big two. That means you’ll have less competition when vying for users’ attention and a bigger shot at making your mark.

  • Google Monthly Average Users: 4 billion
  • Facebook Monthly Average Users: 2.74 billion
  • Tapjoy Monthly Average Users: 1.5 billion

While Tapjoy’s network is extensive enough to provide a global reach, it’s not oversaturated. Market saturation should be an essential consideration for any advertiser; if you and all of your competitors are repeatedly targeting the same users, making an impact becomes increasingly difficult.

 

How social, SEM, and in-app work together

With all the above considered, there’s still a place for social media and search engine marketing in your overall acquisition strategy. After all, survey data suggests that both Facebook and Google generate ROI, but in-app CPA ads regularly exceed those benchmarks. When balanced appropriately, social, SEM, and in-app can complement each other nicely — just make sure that the first two aren’t making up an overwhelming portion of your paid media spend.

In addition to the ROAS and conversion rate benefits, many mobile users actually respond better to in-app ads. As we discovered in our own Direct to Consumer Retail Report, 66% of Tapjoy users prefer Tapjoy’s rewarded ad experience over Facebook, Instagram, and Twitter ads. Additionally, 70% of consumers say they’re actively seeking new brands and subscriptions through the Tapjoy Offerwall — they consider the reward a purchase rebate for products they would already buy.

When in doubt, test it out. Experiment with low-risk CPA advertising in order to try out new strategies without going over budget. Once you’ve tested and determined your next steps, you can reassess your ad budget and scale in-app campaigns. With Tapjoy, you don’t have to figure it out on your own; our mobile growth strategists will be with you every step of the way.

Ready to embark on your own CPA journey? Get in touch to set up a consultation.

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