Digital advertising is in a state of flux. Just a few years ago, the biggest issues were in how to make sense of all your data in order to grow. Now, with increasing data policies from Google and Apple primarily, the challenge is in how to obtain it. For Grant Simmons, VP at Kochava Foundry, it’s a question of managing and reducing churn…
As digital advertising moves into a privacy-first era, user acquisition (UA) will become increasingly difficult to perform. A big part of the remedy is churn mitigation. Churn has and will always be a problem in business, but it is especially important now with Apple’s Identifier for Advertisers (IDFA) going away with iOS 14.5. On its heels, the Android Advertising Identifier (ADID) will become less accessible too, and third-party cookies will be all but gone next year. The inevitable result of these increased restrictions from big tech is that the cost of user acquisition will increase.
The solution? Look inward at the customers you already have by increasing customer retention and mitigating churn. Brands need to understand the importance of this and look for ways to keep those customers they first earned, as well as ways to maximize their customer base.
Tracing the user journey
To begin mitigating churn, you have to understand your customers by seeing all the different ways they interact with your brand. Are they primarily on mobile, or do they begin their journey there but mainly consume your content on connected TV? And what content or product are they gravitating toward?
Believe it or not, you already sit on a wealth of first-party data such as emails, customer IDs, and/or phone numbers; all of which can be hashed and used for the purposes of attribution and measurement. Any information that your customers give you can be used to tie their user journey using an identity solution. This data is gold—your customers gave this information to you, and you can’t get it easily anywhere else.
To trace the user journey your customers are taking, a good identity solution will show you their paths such as whether they start on mobile web then visit the app and consume something on connected TV. Right now, there are a wide variety of identity solutions, and some may not be reliable as data privacy restrictions increase. A good solution will enable you to trace users in a secure way and measure holistically, across any connected device, including devices by household. This will help create a map of the user journey as they move across a brand’s touchpoints.
Mitigate churn with predictive modeling
Once you have an understanding of who your users are, predictive modeling will help identify who is high-quality and who is likely to churn. At Kochava, we use a machine learning model to apply a churn score to a device. The churn model monitors install activity for 7 days after install and applies a score of how likely that device is to perform an event in the next 30 days.
The churn scores are at the device level or users can be grouped in low, medium low, medium high, etc.). From there, you can visualize the scores by network and go even deeper to the publisher site level to measure performance and optimize based on sites that have lower churn scores. With predictive modeling, you can make changes during bidding and don’t have to wait until you receive post-install activity to decide on where to allocate your media spend.
Subscriptions are a big part of the customer lifecycle especially now when targeted advertising is becoming more restricted. The subscription model is a way to secure revenue and retain customers if managed correctly with the right management system.
Suffice to say, not all subscription management systems are the same. The app stores manage subscriptions to a degree, but they withhold the row-level subscription records and divulge only aggregated data. With a holistic subscription management system, you can learn where your customers are coming from, see where they are in the billing cycle (eg, trial started, cancellation, even billing error), and learn what content they are consuming. In other words, you should get more transparency about your subscribers, but if you rely on the app stores alone, you won’t get it.
Each of these methods outlined above—identity resolution, predictive modeling, and subscription management—lends itself to retargeting methods.
With identity resolution solutions, you can onboard the first-party data that you have and use the solution to enrich your data set and learn more about your audience. Identity solutions also enable you to determine a user and/or household profile to isolate the devices you want to target.
In using predictive modeling and churn scores, you can segment your audience to target your high group (high-quality) by their low, medium, or high scores and enable push notifications or some other retargeting method to focus on retaining your high-quality users and/or crafting specific messaging to those with higher scores more at risk for churn.
If you are managing subscribers, you can get alerts as to whether there are billing issues or if a user is about to cancel and retarget them before they churn.
UA is changing, but opportunities abound to strengthen your user base
A more restrictive adtech environment has made your existing customers all the more valuable. While churn is nothing new to business, it’s well worth your while to better understand your customers, where they are coming from, and what behaviors they are displaying in order to retain them. Work on retaining your existing customers, and you won’t have to rely on UA and its oncoming challenges as much in the long run.
Grant Simmons, VP, Kochava Foundry