you’re running the same exact ad across multiple locations. But the rewards
might be different. For example, in mobile games, you earn money through
ads that you show inside your game and through in-app coin purchases. Some
locations might tend toward more coin purchases than others. Japan is better
than Hong Kong, and the United States is where the money is (relatively
speaking). However, advertisers pay different rates based on the country.
They may pay a lot more in the United States than they do in say Hong Kong
or France. That means that the cost of acquisition needs to be lower in those
countries.
Two things you need to look at to see if your campaigns are working are:
● Cost of acquisition of a new customer
● The average lifetime value of a user
So, if I have a mobile game and the cost of acquisition of a customer is $0.90
and that customer will generate $2.50 in revenue, then that is a winning
proposition. However, bundling locations in ad campaigns can cause
problems. For example, in the United States, an average user might cost
$0.95 to acquire, but they might on average bring in $4 in earnings. In Hong
Kong, they might cost $0.85, but only bring in $1.25 in revenue.
The same thing might be in play for our real estate ad. You might easily
acquire prospects from New York who are interested in moving to Arizona,
maybe as easily as you’re getting from people in California. But California is
a lot closer, so in reality, it’s a lot easier to make the move. So over time, you
might find that you’re making a lot more revenue from California residents
but only occasional sales from New York residents. The sales from New
York still add to your bottom line, so you don’t necessarily want to cut them
out. But maybe an approach you will take is keeping the campaigns separate
and running a campaign aimed at NY residents that has a much smaller daily
budget.
Testing Your CampaignsSo, you’ll need to figure out what variations you’re going to run on your
campaigns. It can be varying demos, interests, or just changing up creative.
The goal is to throw everything out there and then find out what works and
what doesn’t.