💎 Growth Gems #80 - Paid UA, Creatives and Subscription Monetization
Hey,
This week I’m sharing gems on:
These insights come from Sviat Hnizdovskyi, Liliya Gafitulina, Bogdan Khashiev, and Darrell Stone.
Enjoy!
🥇 TOP GEM OF THE WEEK
Subscription monetization: diminishing returns, going beyond paywalls, early-stage advice
Subscription monetization is one of my favorite topics.
Sviat Hnizdovskyi (Founder at Applica Agency) has quite the experience on the topic. In this episode from Adapty’s SubHub podcast, he shared some advice, particularly relevant for early-stage apps.
💎 Create a spreadsheet to map all your previous experiments by category (e.g., paywall, price monetization, onboarding length). Look at the areas where you’ve tested less, and prioritize tests in that category to avoid the diminishing returns of over-testing a type of experiment.
Sviat Hnizdovskyi (Founder at Applica Agency)
at 06:40
💎 A lot of people ignore some crucial elements of the LTV equation: refund rate, subscription retention rate, and chargeback rates (for web).
Sviat Hnizdovskyi (Founder at Applica Agency)
at 09:55
💎 For early-stage startups, identify the top 5 competitors monetizing the best (especially if they have a bad product) and start with what they do (e.g., paywall).
Sviat Hnizdovskyi (Founder at Applica Agency)
at 11:25
⛏️ Going Deeper: don’t A/B test if you don’t have enough volume, but make sure you try the change for at least a week, probably two weeks.
For the subscription retention of this cohort, don’t rely on benchmarks. Take the first two weeks to see how many subscription cancellations you have. Plot the chart and assume that your curve of unsubscribe rate will have a logarithmic shape.
💎 Three things that matter for monetization besides paywalls and prices:
Onboarding experience: what questions you ask, how you design your login screen, what product benefits you show, etc.
Pushs, emails, in-app messages strategy: trying to get users that did not convert initially.
Discounts: lowering the price with a sequential price drop.
Sviat Hnizdovskyi (Founder at Applica Agency)
at 14:34
💎 A lot of early-stage apps would benefit by increasing their price by at least 20-30%. Almost everyone who just launched an app has imposter syndrome and doesn’t dare to charge a high price for their subscription.
Sviat Hnizdovskyi (Founder at Applica Agency)
at 17:40
💎 If you have a yearly subscription, experimenting with a quarterly or half-year subscription can be a very powerful tactic for overall ARPU growth.
Sviat Hnizdovskyi (Founder at Applica Agency)
at 19:00
💎 On the web, keep your chargeback rates under 1%, even if it means refunding proactively.
Sviat Hnizdovskyi (Founder at Applica Agency)
at 21:30
💎 At the very early stage of a subscription app, the team shouldn’t focus on improving the product but on making changes to the very first session (activation flow, onboarding funnel, paywall, etc.). It’s not efforts to improve product retention that will bring you a better LTV (especially for health & fitness, education, and entertainment).
Sviat Hnizdovskyi (Founder at Applica Agency)
at 27:25
⛏️ Going Deeper: it sounds counterintuitive, and Sviat gives the precision that this is truer for apps where the initial user impulse is strong, and intent might fade later. You can’t focus only on the first session forever, but optimizing it will help you get enough people in (and paying).
💎 Once you change your paywall design, the learnings you got from your previous pricing tests might be less relevant.
Sviat Hnizdovskyi (Founder at Applica Agency)
at 35:12
Creatives: misleading ads
A lot has been written about “fake ads”.
Some think they’re bad because you will hurt retention, while others see great performance and sometimes even leverage them to evolve the product.
“Misleading” is a spectrum, and I find it fascinating how some ads are aligned with the motivation behind a game’s core mechanic.
Liliya Gafitulina and Bogdan Khashiev (UA Manager at AdQuantum) discussed the topic with Shamanth Rao (Founder at RocketShip HQ) in the episode How to execute a misleading & meta-misleading creative strategy for games of The Mobile UA Show.
💎 Steps to create meta-misleading ads:
Play the game to understand the core mechanics, settings, and design elements.
Make core gameplay creatives (screencasts) to understand how they perform on tested sources and which elements attract users the most.
Add meta-misleading features like story-telling before the core gameplay or exaggerating mechanics.
Liliya Gafitulina (UA Manager at AdQuantum)
at 02:48
⛏️ Going Deeper: in Meta-misleading creatives, only certain elements are changed/exaggerated. For example, Idle Lumber Empire doesn’t have a truck like the one below to collect lumber (or these 3D graphics), but you do collect lumber in the game (core mechanic).
In misleading creatives, you introduce new mechanics and graphics or characters. For example, Gold & Goblins doesn’t have any towers like the ones below in the game. But again, it’s a spectrum.
If you want to see how this might materialize when a game creates a bunch of misleading and meta-misleading creatives, you’ll be interested in Matej’s post Survivor.io & Top War: UA creative strategy masters.
💎 The most commonly used “motivation” model by AdQuantum has six categories divided by needs/pain users are looking to solve for, in-game and creative:
Communication
Mastership
Management
Self-expression
Researching
Escapism
Bogdan Khashiev (UA Manager at AdQuantum)
at 06:55
💎 There is also room to add meta-misleading assets to the App Store pages (screenshots, icons) with top-performing characters, elements from the ad creative, etc.
Liliya Gafitulina (UA Manager at AdQuantum)
at 17:00
💎 The UA team needs to know the ratio between ad monetization and in-app purchase monetization because UA/creative changes might affect this ratio.
Bogdan Khashiev (UA Manager at AdQuantum)
at 21:11
💎 When testing creatives, choose some cheap geos in terms of CPM and use the relevant optimization. For in-app purchases, Brazil is one of the best countries to test your creatives.
Bogdan Khashiev (UA Manager at AdQuantum)
at 23:55
💎 Two very useful metrics to assess creative performance:
IPM (impressions per mille) because it gives you the attractiveness of the creative and is not affected by CPM.
“D1 player cost” metric, which is obtained by dividing the CPI by retention rate to understand the cost to get players that retain past Day 1
Bogdan Khashiev (UA Manager at AdQuantum)
at 24:55
Onboarding: bets, buy vs. build
Some more subscription gems for this week. Although they really could apply to any product…
Darrell Stone (Head of Product at Citizen) talks with David Barnard (Developer Advocate at RevenueCat) about his journey and what he’s learned at Citizen on the SubClub podcast episode Building a Product Improvement Loop.
💎 Get better at being wrong, and structure everything as a bet. When developing new products, you’re inevitably going to be wrong a portion of the time, and it is important for the team to understand that the objective is not to be 100% right.
Darrell Stone (Head of Product at Citizen)
at 30:30
⛏️ Going Deeper: Darrell recommends listening to Getting Better by Being Wrong with Annie Duke on the Knowledge Project podcast (the only “non-growth” podcast I listen to!). She explains that by structuring things as a bet and acknowledging the uncertainty, you can start thinking about the expected value of each bet and how to tweak the “effort to impact” ratio to get the same expected value for less effort (i.e., de-risk that bet) or get way more value for little more effort.
💎 Focus on the top of the funnel and what is driving your growth engine or your feedback loop. You must understand the psychology of the people that enter your app experience and the kind of content they’ve been shared, the ads they’ve seen, etc.
Darrell Stone (Head of Product at Citizen)
at 33:40
💎 The first session matters the most. In your onboarding, you can communicate differently to get them to take the plunge with you. It’s your golden moment to tell your story well.
Darrell Stone (Head of Product at Citizen)
at 34:30
💎 Have a really strong understanding of BUY vs. BUILD. You get more than a tool when you buy: you get industry experience and perspective, ensure that things will be working well long term, you reduce maintenance cost and can focus more on value.
Darrell Stone (Head of Product at Citizen)
at 36:10
💎 Bring in advisors or people who can evangelize why some initiatives really work. This creates added momentum and ensures you get even better best practices.
Darrell Stone (Head of Product at Citizen)
at 42:40
💎 The top charts are a scoreboard of who’s winning. Download top apps and collect teardowns of flows. Become a student of the game and understand what’s working and what people are doing across industries.
Darrell Stone (Head of Product at Citizen)
at 43:05
And before I leave, here is a quote on user research and customer interviews from this Mobile User Acquisition Show episode:
“Take quotes, not notes” - Hannah Parvaz (Co-founder at Aperture)
See you next time. Stay savvy!
⛏️ Sylvain
🔗 sources:
Sviat Hnizdovskyi from Applica.agency on the SubHub podcast
How to execute a misleading & meta-misleading creative strategy for games on The Mobile User Acquisition Show
Building a Product Improvement Loop on the SubClub podcast