[Huawei Developers] shikkerimath:
For apps, pushing messages to users is the most direct and cost-effective marketing approach. There are however many details to consider, which may pose a daunting challenge for operations personnel. In this article, we discuss how to increase the revenue brought by pushing marketing messages (as opposed to instant messages or system messages) in terms of return on investment (ROI).

Let's take an app with 1 million daily active users (DAUs) as an example. Its daily messaging cost is about US$2,500, which is calculated using the following formula: Cost on the cloud + Cost for using a push platform or setting up a push platform + Operations personnel or R&D personnel costs.

The formula for calculating the daily messaging revenue is as follows: Number of push times x Number of target users in each push x Delivery rate x Tap-through rate x Average conversion value. The method of calculating the average conversion value varies according to the profit model. For example, for news app with an in-feed ad profit model, the formula for the average conversion value is Average ad impressions x eCPM/1000; for e-commerce apps with a product purchase profit model, the formula for the average conversion value is Purchase rate x Average order amount x Average profit rate.

Based on the industry average, the daily messaging revenue for an app is around US$4500 (3 x 1 million x 30% x 1% x 0.5). In addition, the number of active app users will also be greatly improved through pushing messages, which is not detailed here. Now, let's talk about the elements in the preceding formula one by one.

Number of push times

Generally, an app pushes 2 to 5 marketing messages to a single user every day. However, some apps will push more than 10 such messages, which at best will cause users to disable the app's push messaging permission and at worst uninstall the app. Therefore, it is recommended that a maximum of 3 messages be pushed to a single user per day.

Number of targeted users

Generally, it is not a wise decision to push messages to all users. With user tags, you can select targeted users by intersection, union, and difference, to improve the tap-through rate without annoying users with over-frequent messaging.

Delivery rate

The delivery rate is calculated by dividing the number of received messages by the number of sent messages. The delivery rate will be reduced if users disable an app's push function or there is an error in the push channel.

If users disable the push function, check whether the push frequency is set too high or the message content is not appealing to users. You can remind users to enable push messaging for your app when there are product discounts, when they earn bonus points, etc. instead of simply reminding them every time they open the app.

Messages can be pushed through a third-party push platform, device vendor channel, or persistent connection. Most apps adopt third-party push platforms for messaging because it can provide one-stop push services and offer advantages in terms of integration, customization, and data analysis. However, such platforms cannot guarantee a 100% push message delivery rate.

To ameliorate this, apps can also integrate the push SDKs of device vendors, such as HUAWEI Push SDK and the Xiaomi's push services, so that messages can be pushed through the notification center processes provided by the vendors. This prevents message delivery failure when apps are not running, and ensures delivery rates reach more than 99%.

A persistent connection is not recommended, because it requires a large number of R&D resources, and its process may be stopped by the system.

Tap-through rate

The tap-through rate depends on multiple factors, such as the message content, push style, push time segment, and profile matching.

As the following examples show, push messages can vary greatly in terms of content and appearance. To increase the tap-through rate, you need to think about how to make your message content stand out. For example, you can opt to push content that the user is interested in, display information about product discounts, provide personalized notification sounds, or add symbols such as ">>" to attract users to tap the message. You can also use A/B testing to compare message content and select the best one. Giving your push messages a more interesting look may also help improve tap-through rates.

Traditionally, push messages contain text only with small images or emojis sometimes being added. Nowadays, however, operations personnel are starting to include larger images and even animations, to improve the tap-through rate.

It is recommended that you push messages to users during times of the day when they are most likely to be using their mobile phones, for example, during breakfast and the morning commute (09:00-10:00), during lunch (12:00-14:00), during the commute back home (18:00-19:00), and before bed (21:00-22:00). However, the push time may change if you want to send messages about important events to users. If you are confident about your app's popularity, you can decide when to push messages based on your users' app usage habits.

Pushing messages by user characteristics (such as age, gender, interests, apps recently used, and places users have visited) can also increase the tap-through rate, and reduce user discomfort.

The content that a user sees after tapping a message must be consistent with that displayed in the message. Otherwise, users will have a bad impression of you and your app, and may even uninstall the app. Improving user conversion depends on whether users like the content they see in your apps.

Assume that the current revenue is US$4500 (3 x 1 million x 30% x 1% x 0.5). If the delivery rate increases to 50% and the tap-through rate increases to 3%, the daily revenue will reach US$22,500, a 400% increase, and the annual revenue will increase to US$8.2 million.

Note: All data is for reference only.

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