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The Ultimate Guide to OEM advertising

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Boosting e-Commerce sales when traffic sources seem to run dry

10 Jun

Case Study by Zorka.Agency

E-commerce is a steadily growing industry. The pandemic and global lockdown have just contributed to its hypergrowth. Brands are competing for every customer they can get. As a result, advertisers are desperate to look for new traffic sources. There is a new digital marketing tool on the horizon. OEM is a modern solution which ultimately has a fantastic advertising potential.

Learn more about the collaboration of Zorka.Agency and one of the largest retail chains in Germany that had OEM traffic sources at its core, and why you should keep OEMs on your radar.

e-Commerce in Germany

Germany is the fifth largest market for eCommerce with a revenue of US$109 billion in 2021, placing it ahead of South Korea and behind the United Kingdom.

With an increase of 14%, the German eCommerce market contributed to the worldwide growth rate of 29% in 2021. Revenues for eCommerce continue to increase. New markets are emerging, and existing markets also have the potential for further development.

About

Zorka.Agency was working with a client from Germany – one of the biggest grocery retailers in Germany.  It has the biggest number of stores in the country and dominates in all the regions. With an established presence in the market, the retailer had already been using digital marketing tools as a part of their marketing strategy. So digital advertising wasn’t anything new for the brand. Zorka.Agency had to come up with an ingenious idea of how to get new customers through the brand’s mobile app. The challenge was to avoid the traffic sources that the client’s in-house media buying team was using at the time.  

“We have been keeping an eye on the OEM market since 2020. Even then, it seemed to have a great advertising potential and, most importantly, it was growing. As we are in a constant search of new traffic sources and ways to optimize ongoing ad campaigns, my team runs thousands of A/B tests to offer the best performing solutions to our clients. With this approach, we have been successfully scaling ad campaigns and growing our performance marketing expertise. This time we set up the ad campaigns for the client around OEM traffic sources.” 

 

Karina Vasyukevich, Head of UA, Zorka.Agency

Let’s focus on how to use OEM for your ad campaigns and why this case was a great success for our client.

OEM traffic sources

OEM (original equipment manufacturer) sources are platforms that generate traffic inside the customized operating system of a mobile device. For example, ads pop up in service apps like Weather. These ads may look like recommendations from a manufacturer and appear in other apps on the device.

Appnext recommended native ads examples

Challenge and KPIs

Before we dive deeper into KPIs, we want you to remember that the client’s mobile app was in the market for a couple of years, and all the standard performance marketing tools were extensively used by the client’s in-house marketing team. On top of that, several other agencies were helping with the promotion.

Zorka.Agency was tasked with finding new traffic sources that could be used to generate extra orders for the client. All the campaigns were to meet the set KPIs. Our team faced an extra challenge. All the traffic sources that the client’s team had already tested and used were banned. That does sound like a pretty unconventional task, doesn’t it? 

So, in this case the following KPIs were set:

  • CPI model to pay the agency;
  • iOS and Android CPI rate – $1.43;
  • Lowest acceptable CR from impression to install – 0.3%;
  • Lowest acceptable CR from install to order – 3.5%;
  • Fraud traffic not to be paid for;
  • If ad fraud exceeds 30%, the ongoing ad campaigns with this traffic source should be stopped;
  • Traffic attribution tracking with AppsFlyer and Protect360.

The KPIs indicate that the client sets the CPI rate based on their unit-economics. On top of that, they reflect the risks of possible ad fraud. For instance, all the traffic attribution was required to be checked with Protect360. Additionally, there was another KPI of CR to install. This eliminates the possibility of click injection.

The advertising budgets for all the campaigns were limited. They were distributed among the in-house team, Zorka.Agency and other digital marketing agencies. As a result of highly performing campaigns, the client reallocated the budgets which helped us scale the ad campaigns and achieve better final results.

Ad campaign launch

Before the launch we made a list of traffic sources that we were not going to use, which included:

  • traffic sources used by the in-house marketing team;
  • traffic sources used by other digital marketing agencies;
  • banned high ad fraud traffic sources.

These restrictions significantly limited the number of potential user acquisition channels. That was the reason why we decided to go with several unconventional yet promising traffic sources:

  • OEMs;
  • trusted in-app traffic sources;
  • alternative app stores.

The factors that influenced our decision:

  • low ad fraud;
  • suitable for E-commerce;
  • new to digital advertising yet high performing.

Within each group, we chose the traffic sources that were a good fit for the client’s business objectives. To maximize the accuracy of the performance forecast we reached out to each advertising platform and discussed the KPIs.

Xoom and Appnext platforms were chosen for the OEM group. MobPower and Flamingo were the in-app traffic sources for the campaigns. As for the alternative app stores, ShareIt was willing to collaborate with the set KPIs. ShareIt is a mobile app that allows you to share other apps between users without using Google Play.

We launched ad campaigns with all the selected traffic sources, and in a couple of weeks we already had a clear understanding on how to optimize them and which sources were barely meeting the KPIs.

Ads

Retail chains are e-Commerce projects with constant demand and high competition. Often people choose stores near their home, or because a store pricing strategy is more affordable. Therefore, we had to come up with a creative approach for our advertising campaigns that would make us stand out of the competition and appeal to new customers. Following the strict rules of the brand book, the ads were developed with a focus on:

  • online grocery orders through an app of a popular retail chain;
  • ‘I would buy it myself’ approach when selecting the produce for delivery;
  • fast delivery;
  • contactless delivery;
  • discounts, promotions, promo codes.

Results

We tested about 20 different traffic sources in the course of three months. Unfortunately, budget constraints did not allow us to reach the maximum number of orders for the client, but even in the current conditions we were able to achieve good results.

The data includes recurring purchases

The table illustrates that in-app traffic sources didn’t have satisfactory results as there were too few installations and repeat purchases. As for alternative app stores and OEMs, the ad campaigns performed quite well. CR to purchase exceeded the set KPIs by 2-3 times without any ad fraud. 

Xiaomi, Oppo, VIVO, Samsung were the first to recognise the importance of a smartphone to a user. People tend to trust their gadgets as their best friends. The amount of time a user spends with a smartphone every day is growing, along with an increasing number of user exposures to OEM ads.

When it comes to ad campaign performance, OEMs are quite similar to organic traffic. That can be explained by ad mechanics. Users get exposed to the ads in the form of recommendations on their devices. They look authentic and help build user trust.

If you are interested in leveraging the power of OEM marketing in your strategies, don’t hesitate to get in touch ?