Google Ads can sometimes cause rapid spending increases. Do you know why?

“The issue is that an increase in ad spend did not result in a corresponding increase in revenue. We have some suggestions on how to avoid this situation.”

Here we are to give a previously gained experience about in-app purchase campaigns in Google Ads! I believe it will be useful to you. But let me tell you upfront, this post is going to be longer than the line at a Black Friday sale. Are you ready to read? 🥳

First of all, Google Ads offers a variety of different ad formats and campaign types, including in-app purchase and install campaigns. In-app purchase campaigns are designed to promote specific in-app purchases within mobile apps, while install campaigns are focused on driving users to download and install a mobile app.

There are some differences between the two campaign types. Here they are;

• One key difference between these two campaign types is their focus and goals. In-app purchase campaigns are specifically designed to drive in-app purchases, while install campaigns are focused on increasing the number of app installs. This means that in-app purchase campaigns may be more effective for app developers who are looking to generate revenue from in-app purchases, while install campaigns may be more effective for app developers who are looking to increase their user base.
• Another key difference between these two campaign types is the way that they are measured and evaluated. In-app purchase campaigns are typically evaluated based on the number of in-app purchases that they generate, while install campaigns are typically evaluated based on the number of app installs that they drive. This means that the success of an in-app purchase campaign can be more directly tied to revenue, while the success of an install campaign may be more difficult to measure in terms of tangible benefits.

And also, there are some disadvantages and advantages of them that we should think about when we set the objectives of our campaigns.

• One advantage of using in-app purchase campaigns is that they can be a highly effective way to drive revenue from mobile app users. Because these campaigns are specifically designed to promote in-app purchases, they can help app developers to target users who are most likely to make a purchase within their app. This can be a particularly effective strategy for app developers who are looking to monetize their apps through in-app purchases.
• One disadvantage of in-app purchase campaigns is that they may require a significant investment of time and resources to set up and manage. In order to be effective, in-app purchase campaigns must be carefully targeted and optimized to reach the right users at the right time. This can require a significant amount of work, and app developers may need to invest in specialized tools and services in order to manage their in-app purchase campaigns effectively.
• In terms of install campaigns, one advantage is that they can be a highly effective way to drive user growth for a mobile app. By promoting the app to a targeted audience, install campaigns can help app developers to increase the number of users who download and install their app. This can be particularly useful for app developers who are looking to build a large user base for their app.
• One disadvantage of install campaigns is that they may not be as directly tied to revenue as in-app purchase campaigns. Because install campaigns are focused on driving app installs, they may not have as direct an impact on revenue as in-app purchase campaigns. This can make it more difficult to measure the return on investment (ROI) of an install campaign, and may make it more difficult for app developers to justify the cost of running these campaigns.

Overall, in-app purchase and install campaigns can be powerful instruments for app developers looking to drive revenue and user growth. However, the specific advantages and disadvantages of these campaign types will depend on the individual needs and goals of the growth & marketing team.

Let’s start to focus on our subject: Why did our Google Ads journey take a wrong turn?

In our case, we created in-app purchase campaigns in Google Ads to target more valuable users, while also aiming to generate revenue from in-app purchases as we mentioned above. But it didn’t turn out the way we thought. Our total revenue doubled when we increased our ad spend by x7. However, we expect that the gap will eventually close as we continue to generate revenue from our acquired users based on their lifetime value. However, we expect that the gap will eventually close as we continue to generate revenue from our acquired users based on their lifetime value. But even so, it is unlikely that the gap will be closed. The issue is that an increase in ad spend did not result in a corresponding increase in revenue. This is a common challenge for many businesses, and there could be several reasons why your in-app purchase campaigns may not be generating as much revenue as you are spending on them.

• One possible reason for the lack of revenue from our in-app purchase campaigns is the countries we selected. These countries were not conducive to generating revenue. It is important to be aware that targeting specific countries that generate more revenue for your app can improve the performance of your in-app purchase campaigns. By focusing our campaigns on countries where our app is most popular and generates the most revenue, we can increase the chances that our in-app purchase campaigns will reach users who are more likely to make a purchase within our app. This can help drive more revenue from our in-app purchase campaigns and improve their overall performance. This step may be important for those managing global app marketing topics.
• Another possible reason for this discrepancy is that our in-app purchase offers may not be compelling enough to drive users to make a purchase. In order for in-app purchase campaigns to be successful, the in-app purchase offers that they promote need to be attractive and valuable to users. If our in-app purchase offers are not compelling, this could also explain why our revenue is not increasing as much as our spending.
• In addition to the above I mentioned, we should definitely consider average revenue per paying user (ARPU) when setting up a campaign in Google Ads. ARPU is a metric that measures the average amount of revenue that our app generates from each paying user. This metric can be a useful way to evaluate the effectiveness of our in-app purchase campaigns, and can help us to identify opportunities to drive more revenue from the app.
• Finally, be sure to monitor the performance of in-app purchase campaigns on an ongoing basis, and make adjustments as needed. This may include testing different targeting strategies, offers, and pricing models to see what works best for your app and your audience. By continuously monitoring and optimizing your in-app purchase campaigns, you can improve their performance and drive more revenue from your app.

Yes, we want to share our story as a good experience that allowed us to develop our own special ratio formula in our conclusions. We also created a time-based income-tracking model, which we will discuss further in future blogs. We hope you found our story helpful and that it gave you some ideas on how to evaluate the success of your own in-app purchase campaigns. If you have any questions or need any support, please don’t hesitate to reach out!