I would expect Tinder might be willing to bid more than $27 (per conversion) even if they only ever used Apple payments.
Any marginal conversion that Tinder creates (either against a competitor or non-consumption) is worth over $50 net to them using Apple payments. ($50 would assume a generous $20 marginal cost to serve.)
That doesn’t mean that the data that Tinder’s ROAS team is looking at will guide them to spend more than $27 in this case, only that it might.
Likewise Apple could spend $27 on every customer they converted who was already going to be paying Tinder on the web to buying via the App Store plus $27 for every user they added to Tinder who paid on the App Store who would have not bought or would have gone to a competitor (minus any credit Apple would have earned there) plus an amount of cashflow and enterprise value created by people seeing ads for Apple’s store and concluding that Apple has more/better apps than their competitors.
If we confine only to first-order effects and assume advertising is exclusively about changing payment preferences of users who would convert anyway, I’d expect both companies to be willing to bid close to $27.
jefftk|4 years ago
sokoloff|4 years ago
Any marginal conversion that Tinder creates (either against a competitor or non-consumption) is worth over $50 net to them using Apple payments. ($50 would assume a generous $20 marginal cost to serve.)
That doesn’t mean that the data that Tinder’s ROAS team is looking at will guide them to spend more than $27 in this case, only that it might.
Likewise Apple could spend $27 on every customer they converted who was already going to be paying Tinder on the web to buying via the App Store plus $27 for every user they added to Tinder who paid on the App Store who would have not bought or would have gone to a competitor (minus any credit Apple would have earned there) plus an amount of cashflow and enterprise value created by people seeing ads for Apple’s store and concluding that Apple has more/better apps than their competitors.
If we confine only to first-order effects and assume advertising is exclusively about changing payment preferences of users who would convert anyway, I’d expect both companies to be willing to bid close to $27.