UA via OEM: Android device manufacturers have some new tricks up their sleeves

How valuable is it to get on a phone right from the very beginning, when a user is setting up their new device? I’ve personally disregarded UA via OEM for years now, just sort of assuming that it was functionally equivalent to the crapware you used to get (maybe still do?) on cheaper PCs from computer manufacturers not named after a common fruit.

Maybe that was a big mistake.

Or maybe, the user acquisition space on OEM platforms has massively evolved over the past couple of years, rendering UA via OEM an actually pretty impressive way of getting new users, players, and customers.

And maybe a bit of both.

I just chatted with Ashwin Shekhar, the CRO of Avow. Avow specializes in UA via OEM, and manages Samsung’s Galaxy App Store advertising inventory sales in the EU.

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As it turns out, there are now at least 3 different types of OEM install that happen during the out-of-box and setup experiences, plus many more ad placements in the ecosystems that most mobile OEMs are working hard to build out.

Out of box experience: 3 kinds of UA via OEM

We’ll hit the 3 distinct ways to acquire users during the out-of-box experience and initial device set-up first.

1. Factory preload
2. Out-of-box recommended apps
3. Google Play Auto Install (GPAI)

Factory preloads are pretty much what you’d expect from an early 2000’s Asus laptop: icons on your screen when you boot up for the first time.

The upside is that your app is there on-device. Plus, factory preloads are extremely cost-effective and offer massive scale.  The downside is that the device owner made no choice about it and therefore doesn’t really have any sense of commitment to your app that might translate to engagement. Also, there are  logistics involved in manufacturing devices, flashing them with an OEM software load, and shipping them to market. All of that  means a delay—around six months—from deal signing to the first install.

Ouch.

Out-of-box recommended apps are better in a bunch of ways.

First of all, you get on the device in fairly high volumes, which is kind of the point. Secondly, there’s an element of user choice involved as they go through an out-of-box experience, which means there’s that element of user choice that is critical for post-install activation.

And third, because this type of install is mediated by the OEM and not Google Play, you can avoid the typical 30% Google cut on subsequent in-app purchases and subscriptions (although you may have to negotiate a deal with the OEM for a better rate).

A further benefit: better targeting capability that default on-device preloads.

Google Play Auto Installs obviously won’t provide relief from in-app purchases platform taxes, but they do have significant other benefits and are getting extremely popular, Shekhar says.

When users log into their phones with the Google account to essentially provision it with their settings, data, and apps, GPAI prompts users to review and opt-in to additional apps, which install directly from the Google Play Store.

This is the most popular pre-install method right now, says Shekhar, for a bunch or reasons:

1. Speed (no 6-month wait)
2. High user engagement (people decide to install apps)
3. Low risk (advertisers only pay when the app is first launched by the user)

That’s pretty impressive, especially the last item. But there are additional tricks up device OEM’s sleeves these days.

OEMs are becoming publishers

UA via OEM isn’t over after device unboxing and initial set-up, however, because OEMs are becoming publishers, in a sense.

And then they’re building out ad networks to target the inventory that they’re building. 

Where are those ads showing up? The lock screens and the -1 screen are a couple locations. But there are many more, says Shekhar.

Up to 150 additional ad placements, in fact:

“Open the default browser, you could see it, you open the app store, you could see an editorial or a feature page ad,” he says. “Then you open your music player, or for example on a Xiaomi, they have a video player where they collaborate and collate content. Now within this content you can serve ads, you can serve multiple placements and so on. “

OEMs are constantly testing new placements, he adds, trying to figure out what a user likes and what works best.

This evolution has accelerated over the last few years because, similar to cellular and terrestrial carriers forever trying to become more than “dump pipes” ferrying other people’s content, product, and platforms to consumers, OEMs don’t want to just be device manufacturers. 

They want their customers to use their apps for media playing, news and information discovery, even gaming.

How successful they’ll be and whether there’s damage to the native Android user experience along the way remain to be seen, but there’s no doubt that this is giving birth to a whole new opportunity for UA via OEM.

Much more in the full podcast

As usual, there’s much more in the full podcast. 

Subscribe to Growth Masterminds and check out the full episode: we also chat about third-party app stores on iOS and how some OEMs are taking Apple’s example for how they’re building out their own publishing empires.