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Are you in bed with the right UA agency (and, is an agency even the right way to go)?

AdQuantum breaks down the arguments for staying in-house or working with an agency
Are you in bed with the right UA agency (and, is an agency even the right way to go)?
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Let's cut to the chase and skip the obvious explanation of why efficient UA operation is absolutely crucial for any app to grow its business. So the important question would be the "how".

The majority of app developers will usually build an in-house marketing operation to handle the basic activities and to initiate that critical zero-point user acquisition process. This stage allows the product team to implement tuning, fix the hidden bugs, and gather some feedback from real users who actually interacted with the app. Sure, there is a huge product-forming pipeline pre, during and after this stage, but hey, lets focus here.

It's important to realize that the in-house UA team, as efficient and professional as it can be, still has to be trained, nurtured, paid, offered social benefits, vacations and sick days. Just as the rest of us. Which means, the in-house operation has its inevitable financial and operational tolls. And that means it has to be constantly evaluated, benchmarked and optimized, in order to keep the actual growth process aligned with the marketing strategy.

Once this idea sinks in, the CEO/CMO/Head of UA or whoever is responsible for growing the user base in your company, will usually start exploring the industry for the right marketing partner that will give him that extra juice, which will allow him to maintain the agility, efficiency and the ad-hoc operational resource required form mobile businesses today.

The team at AdQuantum
The team at AdQuantum

So what's next?

There are a wide variety of factors playing a role in each developers' process of decision making, regarding how to choose the right partner. So first, let's just come out and say this - we're looking for an agency. Plain and simple. With all the pros and cons to it. The only thing most agency-sceptics fail to agree with, is that the cons are resolvable, while the pros are just crucial.

Let's go over the most common reasons of sticking with in-house only operation, and avoiding the "hustle" of partnering with a UA agency and see the other to it:

  • You already have a great in-house team - and it delivers!

Well, this is great! If it hadn't delivered, it probably would make no sense in keeping it. But if you try to maximize your audience outreach and make sure the in-house team keeps top performance, you should be able to challenge their achievements with professional benchmarking. Also, in some cases, the in-house team simply has its hands full with whatever already works.

So how will you test the business hypothesis of say, expanding to new markets? That's right. You hire someone to start proving the business concept behind it. In brief, we can summarise this rejection by claiming that a professional UA agency is rarely a substitute to your in-house operation, rather a properly calculated add-on, that allows you to implement a flexibility factor into your marketing plan.

  • Agency means extra costs, which means bigger marketing budget.

Well, this is simply not true. I mean, it is, if you hadn't partnered with the right agency. But in general, the cost of a user acquired by an agency can be up to 50% lower than the same user if acquired by an in-house team. Now why is that?

Just try to calculate the costs of your manpower (including all social benefits, perks and even the Friday happy hour you got there), office expenses, software, training length of actually onboarding a new UA manager, creative assets production and even the costs of letting employees go, in case they haven't actually delivered.

And now imagine paying an agency only for the results. No additional fees, no ad-hoc employees onboarding due to global lockdown. No termination notice of 30 days. No sick leaves. Only result based partnership. How's that marketing P&L of yours look now?

  • Data is our know-how and we аren't ready to share it with no one

This concern is actually a pretty important one and shouldn't be taken lightly. It's important to protect your data and there are several ways to do that. First, make sure you have a bulletproof NDA in place. As trivial as it sounds, you'd be surprised how rarely developers are insisting on a proper data protection agreement before rushing forward.

Another way to go is to simply limit the access to your important information. It might be a challenge though, considering that the UA operation is strongly based on optimization and data analysis. So make sure to sort this issue out by doing a really good background check on the agency you're getting in bed with. An honest company will always value its image and will do everything to protect your information.

  • Additional UA activity will generate competition for the available traffic and will increase the cost of acquiring new users (this argument is strongly present upon discussing UA within FB ads platform)

This one is actually more of an urban legend rather than an actual thing, and unfortunately, probably based on experiences of partnering up with dishonest agencies. So unless your target audience consists of a hundred users, you'll probably be fine.

A professional agency will first make sure your unit economy and audience profiling allows sufficient scale. It will also run constant hypothesis and creatives testing in order to reach users you hadn't been able to obtain before. Remember that the only real USP an agency can offer is a happy customer and successful cases.

So is there a bottom line to all this?

Yes, there is. But if you expect it to be clear and simple, we're going to disappoint you because your business is unique and your app is different in so many ways from any other.

But it's not all that complicated. Try to follow this pretty straightforward checklist and we promise it'll help you with you to realize who would be the right marketing partner for you.

  1. Scope of services - consider only agencies that can offer you all the required services you need and in sufficient scale. What are their creative assets production capabilities and are they included in the overall cost? Are they offering scalable collaboration model that won't require you to pay more once you've already started working. Read the fine print of any IO and ask all the questions ahead to avoid misunderstandings.
  2. Flexible collaboration model - you may have different expectations and needs during different stages of your growth. A simple riskless CPA model can be useful while you're at the beginning, while a profit-share model can make more sense once you've moved past the initial stages. Or maybe you need to expand your target outreach through new audiences? In such case a more flexible commission-on-spend model will allow the agency to pursue new hypotheses and test new markets for you.
  3. Flexible terms and termination - make sure the agreement enables you to to terminate the partnership with a simple short notice. Don't agree to draconic exit clauses or any sort of fines in case you realize they don't perform as expected.
  4. Relevant Experience and Know-How - make sure the agency you're giving a shot at your business has the proper tools to make it work. Do they have prior experience with similar apps? Do they realize how you in-app payment funnel allows them to leverage the targeting optimization process? Are they ready to support your campaign with sufficient amounts of creatives? Make sure you have all these questions sorted out before moving forward.
  5. Manage your expectation - if you're looking for a Revenue-Share partnership, make sure you're ready to share your under-the-hood metrics to enable the agency to evaluate the potential for such collaboration. Make sure your partner knows how to analyze data from your attribution platform. Generally speaking, try to minimize the uncertainty factor before moving forward with any new partner.

So... Why should we go for an Agency partner? Or, shouldn't we?

The simple answer is, unless you are Supercell, King, Tencent or EA Mobile, you probably should.

The longer answer is based on the question "why". Well, because it makes a lot of sense. Strong UA partner enables you to benchmark your in-house team and to optimize the cost of attracting new revenue. It allows you to pursue new audiences and test countless business hypotheses without pouring any additional resources into the process.

Every CMO must have a backup plan in his drawer, that can be initiated practically on the spot

A loyal and experienced agency can do much to help you grow your business due to the simple reason that it benefits from your success. Eventually, the right partner will give you the resource to go forward full throttle without being worried about additional costs and unexpected failures.

It's cheaper than adjusting your in-house operation to unexpected events (global lockdown, anyone?). It's quicker than training a new team and allows you to expect results usually within a very short test period. It beares substantially less risk when trying to expand your audience's outreach to new markets.

It's more flexible if you predict the chance of pausing the operation with simple cancelation notice. It's more efficient because if you know how to calculate your costs efficiently, you will pay less for users acquired through an agency than for those onboarded with your own team.

To properly approach these issues, we need to remember our basic goal - business growth. We should always keep in mind the mantra that our app-based business will always have ups and downs, whether it's a "silly" addictive casual game or an online ed-tech project. With that in mind, every CMO must have a backup plan in his drawer, that can be initiated practically on the spot.

We at AdQuantum focused on one simple and transparent goal — pursuing fresh revenue streams for your business. Since we're highly confident in our success, our own profit is strictly tied to the ability to reach your goals. You too can increase your app revenue by partnering with AdQuantum for traffic. Talk to one of our specialists today!