Their biggest problem was not doing research. Conversions are hard, usually a percent or two. But what is a conversion? It's getting a user to respond to your CTA. In this case, the CTA was to get people to see the ad and click through to a "preorder" page. They got what they bought. The problems were they expected a greater response, didn't know what they were getting into, and spend $$$ on ads before anyone could get the product. That was the real killer, that's why the money was wasted. They thought they were spending 20k for installs, they were actually spending 20k on were clicks to an app no one could get.

Don't spend money on preorders if you're not collecting payment data now and authorization to charge it later. Anything else isn't a preorder, it's a waste of time.