💎 Growth Gems #77 - Acquisition, Monetization and Data
Hey,
This week I’m sharing gems on:
These insights come from Adam Grenier, Felix Braberg, David Barnard, and Alex Ross.
Enjoy!
🥇 TOP GEM OF THE WEEK
Paid UA: investing in new channels
From time to time, I will now feature gems by “guest miners”.
Lisa Kennelly (Consumer Growth + Marketing at Klarna) is the first. I shared insights from Lisa when she was CMO at Fishbrain, and I was excited that she accepted the invitation!
Below are a few words from Lisa before she shares gems from Lenny’s podcast episode When and how to invest in new acquisition channels with Adam Grenier (Early Stage Investor, Growth/Marketing Advisor).
I’ve been a fan of Adam Grenier since he was an Entrepreneur in Residence at Reforge a few years ago and was incredibly generous and thoughtful when I was throwing around growth questions in the old Reforge community forums.
The Lenny’s podcast has been getting some killer guests recently and is my auto-rec these days for people who want to level up their thinking and build a strong growth culture in their company.
💎 When evaluating an emerging channel, understand if there is an overlap between the customer’s needs, your company’s goals, and what the channel does well. Example: in the case of Clubhouse, advertising on Spotify makes sense because it is similarly audio-driven and on both platforms the customers want to have a deeper relationship with the topic/content they’re listening to.
Adam Grenier (Early Stage Investor, Growth/Marketing Advisor)
at 13:52
💎 It’s not about whether a channel is “hot or not” but whether the medium is a fit for your customer and business - this is a mistake many companies make with emerging consumer channels.
Adam Grenier (Early Stage Investor, Growth/Marketing Advisor)
at 17:45
💎 When evaluating a new experimental acquisition channel, assume it will take more than a couple of cycles to suss out. If it’s been over a quarter and it doesn’t feel like it’s going in the right direction or you’re learning something interesting, put it back on ice for a while.
Adam Grenier (Early Stage Investor, Growth/Marketing Advisor)
at 29:05
⛏️ Going Deeper: it’s also important that any testing of new channels is built into your overall growth roadmap - it’s not just randomly chosen, and you should have a backlog of other opportunities you plan to try and that you weigh the benefits against them when testing a new channel.
If you’re evaluating new channels, Thomas Hopkins (COO at Perfect Storm Studios) had a good talk about How to launch a new channel with incremental growth.
💎 In the current economic climate, start by assuming you no longer have product-market fit.
Adam Grenier (Early Stage Investor, Growth/Marketing Advisor)
at 40:40
⛏️ Going Deeper: if you just assume you need to launch a new channel to find a new source of customers, fix higher CAC, or increased churn, you’re going to be wrong. It’s not just the next 10% of customers you’re looking for - remember, the entire market has changed.
Ad Monetization:
I already featured gems from the Two and a half gamers “show” by Matej Lancaric (UA & Marketing Consultant), Felix Braberg (Head of Ad Monetization), and Jakub Remiar (Head of Monetization at Traplight).
This 7 Ad monetisation secrets how to make more revenue episode shows how much of a Wild Wild West ad monetization is. I’m less familiar with this topic, but I still loved the insights/tips.
Plus, it’s always good to understand what is happening on the “other side” of acquisition.
💎 To do your job well as an ad monetization person, you need to know as much as possible about as many networks as possible. It gives you an edge to make more ad revenue and increase your ad ARPDAU.
Felix Braberg (Head of Ad Monetization)
at 23:17
💎 Whenever you deal with an ad network, everything can be negotiated. This starts as soon as you get assigned an account manager at an ad network.
Felix Braberg (Head of Ad Monetization)
at 24:10
💎 Without telling you, ad networks often add long-end cards to their rewarded videos, which makes videos longer. This typically creates complaints from your community. What to do:
Figure out which ad networks do this. Watch out that they do this gradually (i.e., they don’t add 15s from the get-go) until they hear complaints.
Tell them: “I understand the performance risk, but I need parity with all my networks in my game. Please remove the end cards ASAP”.
Felix Braberg (Head of Ad Monetization)
at 26:50
💎 Ad networks often make it hard to close mobile ads by making the clickable area on the “X” button small. Find which network does this by looking at the screenshot of the problematic ad and telling them, “We’re getting a lot of complaints that your ads are not closing. Can you kindly review the clickable area on your “X” button and enlarge it, please? You’re the only network we’re getting complaints about this, and we need it fixed ASAP.”
Felix Braberg (Head of Ad Monetization)
at 29:08
💎 Some ad networks turn on the audio automatically, even though the volume is off. As soon as you notice this, get it out of your game because it will hurt you on the review front. Check the video to learn which network does this more than the others.
Felix Braberg (Head of Ad Monetization)
at 32:14
💎 Ad placement price points are negotiable. Some networks initially limit you, but if you see good performance, you can tell them, “We’ve had very good performance on this placement; can you make a higher placement value on the backend?”. Google, ironSource, and Vungle are some networks that will make the change.
Felix Braberg (Head of Ad Monetization)
at 33:45
⛏️ Going Deeper: I reached out to Felix to get a sense of what thresholds he uses for “good performance”. He said a good placement fills above 1% or earns more than 1% of the overall waterfall revenue. Want to learn more about ad monetization waterfalls? Here is the good post.
💎 On Unity, you can get latency on the Unity side of the Unity dashboard (not just the mediation side). This is because the bidder will go through every placement you’ve made (which can go up to 100-200 if you’re running A/B tests). To mitigate this, ask your Unity AM to remove placements that haven’t seen a bid in the last 30 days.
Felix Braberg (Head of Ad Monetization)
at 36:37
💎 AdMob’s bidder artificially ramps up traffic to new placements for 3 days, to see how performance works. Some companies, therefore, change their placements every 3 days, until AdMob reaches out. Note: this is against their policy.
Felix Braberg (Head of Ad Monetization)
at 38:37
💎 When there is a holiday, always change your rewarded icon to show the holiday theme. Example: change your rewarded button to a Halloween-themed button on Halloween.
Felix Braberg (Head of Ad Monetization)
at 40:52
Data: analyzing a subscription business
The data and reports you create influence how you look at your business and vice versa.
In How to Analyze Your Subscription App Business, David Barnard and Dan Pannasch (RevenueCat) discuss with Alex Ross (CEO at Greg, a plant-care app) some of the best visualizations to assess the health of a business and analyze it further.
💎 Look at your ARR by first purchase month to see the revenue generated by different cohorts over time and how it drops at various renewal points (e.g., monthly, yearly). A stacked area chart lets you see the “layer cake” to ensure that you’re stacking these retentive cohorts.
David Barnard (Developer Advocate at RevenueCat)
at 19:22
⛏️ Going Deeper: with enough spend on acquisition, you could have an overall area/line that looks great. But this cohort view tells you what’s really happening: it helps you anticipate what will happen and identify weaker cohorts to find the root of potential problems.
This reminds me of these two posts by Eric Seufert:
Building a marketing P&L using LTV and ROAS (on the monetization side)
Monthly user churn is a terrible metric (on the usage side)
💎 Your community can be a retention lever. People come to the app for the utility aspect but stay on for the community. Example: Greg, Strava.
Alex Ross (CEO at Greg)
at 32:28
💎 Annual subscriptions are challenging because the feedback cycle is slow. A table allowing you to see the auto-renew status helps you understand the current status of your cohorts.
David Barnard (Developer Advocate at RevenueCat)
at 32:55
💎 Using SQL and Metabase allows you to create charts for your product analytics. By integrating with webhooks, you can also get the RevenueCat data.
Alex Ross (CEO at Greg)
at 36:12
💎 Conversion from app install to paying user is another critical metric to follow. Look at lows and highs, then dive into segments.
Alex Ross (CEO at Greg)
at 38:50
💎 Look at your trial conversion rate per monthly cohort to compare cohorts' performance over time. Not having a cohorted view can get very messy because trials and payments don’t happen at the same time
Daniel Pannasch (Senior PM at RevenueCat)
at 44:34
💎 Referral programs can not be a primary growth channel. Apps that have grown through word of mouth have done so more because they created a product that people want to share than because they have an incentivized program. Example for Greg: referral program is about 2%, but word of mouth is 10%.
Alex Ross (CEO at Greg)
at 1:15:30
⛏️ Going Deeper: in Growth Gems #75, there was also an insight from Yuriy Timen (Advisor) about how network effects are there or not from inception and how difficult it is to engineer them.
If you want to learn more about designing a referral program:
How to design a referral program (by Andrew Chen)
Building a Referral Program for Subscription Apps (RevenueCat webinar with Alex Bauer from Branch)
And before I leave, here is a quote from an essay on where we get our ideas:
“Originality is a spectrum” - Michael Taylor (Co-founder at Vexpower)
See you next time. Stay savvy!
⛏️ Sylvain
🔗 sources: