How to calculate the return of investment from App Store Optimization?
Making a decision to enter into any investment always requires a comparison of costs with the potential profits that we can achieve by implementing a given solution. App Store Optimization is no different. Calculating the ROI for ASO is needed to decide whether it is worth implementing an ASO for your application.
Making a decision to enter into any investment always requires a comparison of costs with the potential profits that we can achieve by implementing a given solution. App Store Optimization is no different. Calculating the ROI for ASO is needed to decide whether it is worth implementing an ASO for your application. In this article, I will introduce you to the calculation of the return of investment (ROI) for aso, and perform an example calculation of the ROI based on the Premom Ovulation Tracker app.
Potential of App Store Optimization
App Store Optimization (ASO) is the process of improving an app’s visibility in the app stores with the objective of increasing organic app downloads. Apps are more visible when they rank highly on a wide variety of search terms, maintain a high position in the top charts, or get featured in the store.
More about what is ASO and why it is important you can read in our article here.
This is the definition, but how you can map visibility into user acquisition and numbers? Here we can introduce the organic uplift metric. What is it? The ratio between organic and paid downloads. The bigger the ratio is the more organic download we have and we pay less for ads to acquire users to the app. How to increase the organic uplift? By implementing a well-crafted App Store Optimization strategy. For example.: If you generate 50k monthly downloads and your organic uplift is 35%, you need to pay for 32.5k downloads, and 17.5k you get from organic sources by doing ASO. If we count the average CPI (Cost per install) of $2 you need to spend $65,000 on paid ads. If you could optimize your organic uplift by 10% points to 45% you would save $10,000 per month. If you would invest $5,000 monthly in App Store Optimization your Cost per install would decrease by 40%!!! In 12 months you could save $120,000! Magic? No, this is the real power of App Store Optimization.
Search Score to App Store Impressions
In every ASO tool, there is an indicator called search score or volume. What is that?
It’s the indicator between 5 and 100 that shows how popular the keyword is in the terms of searches. The higher the number is, the more popular the keyword is and the more impressions your app can get if your app is ranked high for this keyword. This is the foundation of metadata optimization for ASO. Based on the Splitmetrics research Search Score and App Store impressions follow an exponential relationship:
Max Impressions = 254.4443 * exp(0.0615 * Search Popularity)
For example keyword with a search score 40 can deliver 2978 impressions, but a keyword with a search score 60 can deliver way more impressions 10189, 242% more impressions.
Getting proper App Store Data
We know how many impressions we can get from certain keywords. What else do we need? We need to know your current cost per install and conversion rate especially impression -> page views, page views -> downloads. With this data, we will be able to calculate how many additional organic downloads we will be able to deliver by implementing App Store Optimization.
ASO ROI Calculation Example
For calculation example, we will use the Premom Ovulation Tracker app on iOS for USA localization. After doing an ASO Audit of the app we found 9 keywords that Premom could focus on doing the next ASO Keyword Optimization Iteration.
We chose these keywords because they have high search scores and a quite low difficulty so it shouldn’t take long to rank high for these keywords. Right now the app is ranked for these keywords but any from these keywords is in the TOP 3 search results which are crucial to bringing organic downloads. Optimizing these keywords in TOP 3 we could get approximately 40k additional monthly downloads. Normally to acquire this amount of downloads in the US on iOS we should spend on average 3 USD per download. It means that we should spend $120k in paid acquisition. An ASO Agency could do this for a maximum of half of the cost. Calculating the LTV for $15 by doing a proper ASO would lead to an increase in Return of Investment by 129%! App Store Optimization really helps your app to grow faster and acquire more engaged and cheaper users. If you want you can download our Search Score - Impressions cheat sheet to quicker calculate the potential growth in impressions after optimizing the keywords.
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