The App Marketing Checklist: Segmenting Your Audience

In a privacy-focused app marketing landscape, carefully segmenting an app audience serves as the bedrock of successful retargeting campaigns. 

Why segment your app audience

Audience segmentation allows marketers to optimize their strategies by dividing users based on behavior, interests, or in-app activity to ensure that the campaigns are more relevant. Essentially, as different users have different needs, grouping them based on those characteristics can help tailor the message and deliver more personalized experiences.

One of the key advantages of audience segmentation is improved targeting accuracy. Instead of treating all users the same, segmentation allows you to identify distinct groups based on various criterias. This enables you to create highly targeted remarketing campaigns that are more likely to generate engagement and conversions.

There are many ways to segment app users. However, these two matter the most for a retargeting partner: 

• Geographic segmentation

This factors in the user's time zone, language, and location. For example, creatives that resonate well with audiences in France might not fare well when shown to users in Brazil. The wording of the creatives might be incorrect, or the colors might not be as appealing. 

Specific types of creatives such as MRAIDs allow for the localization of messaging, and can translate the wording directly within the creative itself without the need to create multiple campaigns for different target languages.

Splitting audiences by geo also comes in handy when delivering ads. The cost to display an ad (CPM) can differ greatly from one location to another. Thus, sometimes having different geos can help tailor your bidding strategy. 

• Behavioral segmentation & LTV

It consists of grouping your users based on their in-app actions, spending habits, and frequency of use. For instance, retail and ecommerce apps can send targeted creatives or push notifications to cart abandoners and to former shoppers. Likewise, once gaming app marketers have identified high-LTV users (i.e. payers or users with frequent spending habits), they can target them with personalized campaigns to encourage them to continue moving along the funnel. 

The most popular and effective ways to segment users by behavior are:

1. Purchase activity: either number of purchases, or total amount spent in the app by each user. This is a great indicator of the potential future spending power of a user
2. User recency: date of last session for instance. A user who opened your app recently is more likely to come back than one who opened it 3 months ago. Inactivity windows or user recency are good proxies for churn, but churn prediction scoring offers more accuracy. By predicting the likelihood that a user will or will not return to the app and scoring them, marketers can create more granular audience segments with a higher likelihood of success.

Segmentation also helps optimize your marketing budget. By focusing your efforts on specific segments, you can allocate your resources more effectively. For instance, if you identify a segment of users who are highly engaged with your app, you can allocate a larger portion of your budget to retargeting campaigns aimed at this particular group. This way, you maximize the impact of your marketing spend and achieve better ROAS.

Audience segmentation also allows you to personalize your messaging and content. By understanding the characteristics and preferences of each segment, you can deliver tailored experiences that speak directly to their needs. Personalization not only enhances user engagement but also fosters a sense of connection and loyalty with your brand.

Audience segmentation greatly influences creative strategy as well:

For instance, if you want to target recent installers, you might show them videos or playables that are more educational, such as introducing gameplay or the mechanics of your app.

On the other hand if you want to target highly engaged users that often reach a certain level of progress, you might want to customize your creatives with characters or features specific to more advanced users to encourage them to continue.

Retargeting audience segments: which ones and how

By now, you might be wondering, “I’ve segmented my audience already. Which audience segments should I run campaigns on?” Depending on your goals, a good place to start is to divide your users into payers and non-payers. With payers, you can break them into even more granular segments: high LTV, mid LTV, and low LTV, if your audience is large enough. Then, figure out what days-lapsed segments you’d like to try— this requires consistent testing and learning.

Active payers

Retargeting active payers might seem counter intuitive, but it’s highly effective in maintaining user engagement and preventing potential inactivity. Median global retention rates have dropped: 25% for day 1, 9% for day 14, and 6% for day 30. By focusing on this segment, app marketers can strategically measure the impact using incrementality analysis, highlighting the discernible difference over time between actively targeted payers and those left untargeted. This approach not only safeguards against cannibalization but also contributes to sustaining a vibrant and engaged user base.

Active non-payers

If the primary campaign goal is to boost app engagement metrics like Daily Active Users (DAUs) or Monthly Active Users (MAUs), targeting active non-payers can yield positive results. If the goal is to drive conversions and encourage spending, retargeting actively engaged non-paying users can nudge them further down the funnel. This strategy is especially effective for verticals like subscription or food delivery apps where you have a pretty high number of app opens, but fewer transactions— sending out an incentive alert, such as free delivery for their first 3 orders, is a wonderful way to entice them back and to try the app’s services.

Lapsed payers 

Targeting lapsed payers, such as those who have not opened your app for 2, 3, 7 or 14 days, or payers who have made a purchase in the past (could be 30, 60, 90 or 180 days) but have not recently could be valuable depending on the app and the inactivity window. Unlike lapsed non-payers, this group exhibits a clear intent to make purchases, thus making them a potentially valuable retargeting cohort. By reigniting their purchase intent through tailored remarketing campaigns, marketers can effectively re-engage this audience. 

Lapsed non-payers 

Focusing on lapsed non-payers, while an option, may not align with revenue objectives as this segment often lacks significant in-app engagement. If the goal is simply to boost app opens or DAUs, it may be worth it to target these users. But if revenue is the goal, redirecting efforts towards users displaying higher potential for lifetime value (LTV) will likely yield more favorable outcomes. It's essential to recognize that retargeting cannot create actions that haven't materialized naturally: converting a 7-day inactive, non-paying user into an active payer is only possible if there’s existing intent. With that said, this user segment can be valuable for apps that rely on ad-based monetization: lapsed users who have not made a purchase, but who have engaged with a substantial volume of ads. Monitoring events such as ad revenue, or ad-watched is key to reach a meaningful number of these users.

New installers

Engaging new installers through retargeting serves as a crucial step in guiding them along the path to a conversion. For some apps, targeting this segment makes the difference between a user making no meaningful in-app actions and churning and a user making their first conversion, turning them into a repeat converter. This strategy can not only ignite existing purchase intent but also cultivates a heightened interest in the app's offerings. Targeting new installers can prove particularly useful for verticals like food delivery apps, where purchase intent is evident, and for hardcore gaming apps, which often rely on a small group of high LTV users to drive in-app revenue. Depending on the vertical, it makes sense to start retargeting users right away on the day of install, seeing that most post-install conversions occur within 48 hours.

Laying the groundwork

Prior to crafting effective creatives and launching successful campaigns, setting up the right audience is essential. Audience segmentation not only leads to improved targeting accuracy and optimized marketing budgets, but also enables personalized messaging and content customization. Whether focusing on active payers, lapsed payers, active non-payers, or new installers, segmenting your app audience lays the foundation for impactful campaigns that resonate with each unique group.