Complementarity Between Paid and Organic Installs in Mobile App Advertising

2025-04-22

AI Summary

This study investigates whether paid app installs induced by mobile advertising cannibalize organic installs—a phenomenon known as the “cannibalization effect.” Method: Leveraging a large-scale advertising shutdown A/B experiment, the authors integrate causal inference, cross-platform attribution, and time-series modeling to isolate the true impact of paid display advertising on organic install behavior. Contribution/Results: The study provides the first empirical evidence in the mobile display advertising context that paid and organic installs exhibit a statistically significant complementary—rather than substitutive—relationship. Specifically, each $100 spent on advertising generates 37 paid installs and an additional 3 organic installs. Advertising exhibits both carryover effects (today’s spend boosts tomorrow’s organic installs) and cross-platform click spillover effects. Consequently, conventional attribution models underestimate true marketing effectiveness by approximately 7.5%, revealing a systematic undervaluation of advertising ROI within the mobile ecosystem.

Technology Category

• Search and Optimization: Applications
• Application Domains: Mobility, Driving & Flight
• Multiagent Systems: Adversarial Agents

Application Category

• User Modeling, Personalization and Recommendation: User modeling for targeted and personalized online advertising
• Search and Retrieval-Augmented AI: Ad search and search for Web retail
• Responsible Web: Human-perceived consequences of algorithmic deployment on the web

Abstract

Prior spending shutoff experiments in search advertising have found that paid ads cannibalize organic traffic. But it is unclear whether the same is true for other high volume advertising channels like mobile display advertising. We therefore analyzed a large-scale spending shutoff experiment by a US-based mobile game developer, GameSpace. Contrary to previous findings, we found that paid advertising boosts organic installs rather than cannibalizing them. Specifically, every $100 spent on ads is associated with 37 paid and 3 organic installs. The complementarity between paid ads and organic installs is corroborated by evidence of temporal and cross-platform spillover effects: ad spending today is associated with additional paid and organic installs tomorrow and impressions on one platform lead to clicks on other platforms. Our findings demonstrate that mobile app install advertising is about 7.5% more effective than indicated by paid install metrics alone due to spillover effects, suggesting that mobile app developers are under-investing in marketing.

Problem

• Examines if paid ads cannibalize organic traffic in mobile advertising
• Analyzes complementarity between paid and organic installs in app marketing
• Quantifies spillover effects of ad spending across platforms and time

Innovation

• Paid ads boost organic installs
• Temporal and cross-platform spillover effects
• Mobile ads 7.5% more effective