How to Optimize Your Cost-Per-Click Bids and Generate Valuable Users

Apple Search Ads (ASA) offers a way of marketing your app directly to those users searching for an app in the app store. Due to a search of this nature, where users are looking for something specific, Apple Search Ads is a high, intent-driven channel, which can be very efficient in converting these users who are searching to fulfill their needs. 

Here is how ASA works: for a specific search term, users will see a specific advertisement as a top result in the App Store above all organic listings. As such, ASA provides visibility to your app, even if you are not ranking first organically. The way ASA is set up clearly increases app discoverability and generates big advantages for apps. This is because users in the App Store, by having high intent, are more likely to perform certain actions such as downloads, but also lower-funnel events in your app that can generate revenue.

One of the most powerful strategies for optimizing and scaling your Apple Search Ads campaigns is fine-tuning the cost-per-tap (CPT) bid. The CPT bid is essentially the amount you are willing to pay for a tap (which is the same as a click, but on mobile). They are essential in order to bring in a bigger volume for a better price. 

In this article, we are going to cover a couple of best practices that will help you get a better grip on how you can leverage your CPT bid for a better overall performance. We will discuss why you should optimize for events that take place at the lower end of your User Acquisition Funnel (e.g. purchase events) and provide a step-by-step guide on how you can do this. Before digging in, let’s first discuss exactly how the Apple Search Ads auction works.

How does the Apple Search Ads auction work?

Apple Search Ads work on a cost-per-tap model. You pay for your ad only when a user taps on it. ASA is based on a second-price auction, meaning that the CPT you pay is based on the amount the nearest competitor is willing to pay –– this will never exceed your maximum CPT bid.

There are two important elements that play a big role in your chances of winning the Apple auction. First, the max CPT bid you’ve set, and if it is high enough to beat your competition. Second, the relevance of an ad. Apple wants to create an optimal experience for its users, hence, the likelihood of a tap happening will be important. To achieve this, Apple will look at the historical tap-through rate (TTR), which indicates how many users have seen your app and tapped on it. If there’s no such TTR available, ie. you’ve never bid on the keyword before, it can make assumptions based on the relevance of your metadata to the keyword. If there are many users that tap on your ad after seeing it, we can assume that your app is what they are looking for, and your relevancy will be high.

Because of the importance of the relevancy score, we need to ensure that we have a healthy TTR. For this, we need to pay attention to the keywords you use in your metadata. Do they describe the functionalities of your app to make sure that if users search for a certain term, they find what they are looking for? Moreover, creative assets in your app store will also impact the TTR. Therefore, it is important the screenshots that are used match the user’s expectation of an app. To optimize the conversion rate of users through visual assets, you could implement Creative Set Tests in Apple Search Ads, which can offer an indication of how likely a user is to download an app based on one screenshot. Finally, your app’s icon is another relevancy element to take into consideration: aim for a simple, distinctive and understandable icon, so users are more likely to tap on your ad.

In sum, apart from setting an optimal CPT bid, it is also very important to have a relevant ad, and that you target relevant keywords. For example, let’s say you have a weather app, and you target very popular keywords like “music” or “concert”. The chances you have of winning the auction are very low; even if you do win the auction, and users see your app, it’s highly unlikely they will tap on it as it’s not relevant to their search.

Now that we’ve briefly discussed how you can improve the TTR, the other main element that can give you a better chance of winning the auction is the bid. Let’s now touch on why optimizing for low-funnel events is important in order to obtain the optimal CPT bid, which aims to fulfill your revenue and growth objectives.

Optimize for low-funnel events.

If you run an ad campaign, your goal could be to generate a sustainable return on investment (ROI), defending your brand, and increasing market share by growth and/or capturing traffic from your competitors. To improve the effectiveness of your campaign and ensure a positive ROI, we recommend that you optimize for low-funnel events and have a performance-based ASA strategy. This way, you target the keywords that will bring you users with a high intention of converting in your app, and thus, generate revenue and growth for your business.

Unfortunately, the Apple console cannot provide this data as it only provides an overview of your ad’s performance up until the download event (which happens in the App Store). If you stop tracking your performance at cost per download, this will give you an indication of how much you spend on acquiring a new user; but the insight you are missing here is that you don’t know how valuable this user is, i.e. how much money the user will spend in your app, how engaged a user is and how long they are active in the app. A series of important growth metrics, such as return on ad spend, (ROAS) will be missing. Since those will be pivotal in making your business profitable and sustainable, you’ll want to make sure you’re tracking those. Now you can see why it’s important to look further down your app’s acquisitions funnel, and not stop at monitoring key performance indicators (KPIs) that are visible in the Apple Search Ads console.

The image below is a visualization of what the Apple Search Ads funnel looks like and the corresponding KPIs we measure. In the funnel, we also want to emphasize that it is the best practice to look at low-funnel events like cost-per-goal events, for example, cost per purchase, or ROAS in order to ensure the acquisition of high-value users.