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💎 Growth Gems #91 - Paid UA, Monetization, and Activation (MAU 2023)
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This week I’m sharing gems on:
These insights come from Natasha Saviuk, Joshua Nadler, Andy Carvell, Justin Bauer, Julia Allen, Stacy Earl, Matej Lancaric, Felix Braberg, and yours truly.
🥇 TOP GEM OF THE WEEK
Acquisition, Retargeting, Activation (MAU 2023)
Let’s start with some growth gems particularly relevant for subscriptions that Alice Muir (Retention Squad Lead at Phiture), David Barnard (Growth Advocate at RevenueCat), and myself mined at the event and shared during a lunch workshop.
💎 Incentives for existing users can help you control your costs and payback period more than paid UA. BUT the unit economics need to work. Customized incentives using client data help optimize revenue. Example: WealthSimple uses “tiered” incentives based on how much money customers deposit.
Natasha Saviuk (Growth & Product at Wealthsimple)
in Building An Incentive Engine: How To Leverage Cash Rewards As A Growth Channel
⛏️ Going Deeper: Natasha shared that you also want to make sure the revenue you get from incentivized users is incremental: some users would engage with your app with no incentive (labeled “sure thing” below) and should not receive the incentive.
💎 It’s not acquisition and then retention. It has to work in locksteps. One implementation of this is Braze’s suppression lists feature that automatically adds users to retargeting lists on paid social (Meta, Snapchat) if they haven’t performed a specific action (and removes them if they have).
Joshua Nadler (Product Manager & SEO at DraftKings)
in Breaking Barriers for Better Results: Combining Acquisition and Retention Efforts for Maximum Impact
💎 The customer journey is messy: top of the maze, middle of the maze, bottom of the maze.
Julia Allen (Senior Growth Marketing Manager, Lifecycle)
in Developing a Winning Lifecycle Strategy for the Outdoor Industry
💎 You know your product inside out, so you assume subscribers can find your features or content. But that’s not always the case. You must guide subscribers and help them find what you want them to do: adding a premium onboarding can help!
Andy Carvell (Partner at Phiture)
in A strategic lifecycle marketing approach to optimizing subscription
💎 You can’t improve retention with a one size fits all strategy. You have to think about your different segments of users and their intent and define different activation/engagement strategies for each.
Justin Bauer (Chief Product Officer at Amplitude)
in Yes to Growth: No to Silos Uniting Product and Marketing
Paid UA & Monetization: apps vs. games (ad monetization, creatives)
“Remember, this is a 4 am discussion vibe”, like Matej says at each episode…yet there were more gems than I would have expected given the context.
I got to ask them a lot of questions on creatives and ad monetization for apps!
💎 Your favorite data tools’ estimates can be very wrong. Example: Matej had found ad revenue estimates on Legend of Slime that he realized were way off after talking to their team.
💎 The key to adding ads to non-gaming apps is that you need volume. Once you get past 30-50k DAU, you have to think about how many impressions you can display to that user base, which is much harder for subscription apps (e.g., it’s hard to show 5 to 10 impressions compared to gaming).
⛏️ Going Deeper: assuming 3 interstitial ads per user in the US, you will earn $.15-$.18 per day. Considering the loss in retention that comes from adding ads, it would amount to $.30 - $1 in LTV. Felix shared that Kahoot, Duolingo, and Redecor as good examples to check out.
💎 On TikTok, if the app/brand showcased in a creative is not mentioned, but the ad resonates with people, users will ask for the app's name in the comments. This generates engagement and helps the creative perform better.
💎 Take all the social media content with high engagement that games have, and run it as UA creatives. It’s a sort of creative testing since you can already see the engagement with the content created.
💎 TikTok’s Spark Ads work really well. It’s the same concept of “screening” the organic content that shows good engagement on social and re-using it for UA, except it’s much easier to set up: you select it and can run it right away.
💎 To spot creative fatigue, look for a declining trend over 3-4 days for the following metrics: CTR, CPI, ROAS, IPM, and Frequency.
⛏️ Going Deeper: for frequency specifically, Matej shared that 5 is a bad one and a frequency of 1-3 over 7-14 days is still ok. He also explained that if you keep adding new “winning” creatives from your creative testing campaign frequently, you might not even have to try and spot creative fatigue: you know it will happen anyway, so your focus is on producing more creatives.
💎 The best KPI to decide on a creative winner is ROAS. You can have a 5.5 IPM; nobody cares if it doesn’t make money. Even D1 ROAS is a great indicator to use vs. your benchmarks (e.g., if you have limited data, on iOS for example).
💎 Once you find your creative winner, produce different iterations:
Change the full hook to see if that’s what actually works,
Change the hook a little bit (e.g., trying to change the first second),
Change the CTA at the end,
Change the sound and music.
💎 Advertisers underestimate the importance of sound and music, even on Meta. A lot of users don’t have the sound on, but between Audience Network and Stories, it makes a big difference.
💎 Don’t spend time optimizing the ad's primary text. For the Call to action button of gaming ads, just use “Play game” (nobody cares).
⛏️ Going Deeper: Matej even once had French text in an ad for English speakers, which did not affect performance.
For the Call to action for subscription apps, I shared that I’ve seen the call to action button be used to try and “filter” clicks. A “Sign up” or “Buy now” CTA will prevent some less qualified users from sending the wrong signal to the algorithm.
💎 To get ad impressions for a subscription app, you can “give up” part of your subscription app content or give users a “taste” of what the subscription would be like via rewarded videos. Rewarded videos are the best way to monetize your users through ads: they have the highest eCPM and bring the least risk for retention.
⛏️ Going Deeper: Felix worked with an AI chat app where they asked users to watch a rewarded video each time they wanted to ask something, which might be annoying to users. They then made it possible to watch 3 rewarded ads in a row on the first app opens to build up credits, which did not impact conversion to subscription.
💎 When adding ads to subscription apps:
Don’t treat your user base as uniform and segment by geo and/or based on how long users have been in the app (e.g., ads only on Day 3) so you don’t hurt conversion to subscription.
If you can’t segment your user base, you need to get more creative about the ad placement and what is offered to users for watching ads. Example: giving them credits for watching ads, removing a watermark for watching an ad, etc.
💎 Adding ads in some geos like India and Brazil is usually not lucrative because eCPM is very low (e.g., eCPMs on rewarded is about $2, banners’ eCPM is worth almost nothing).
💎 Separate your Google AdROAS campaigns (tROAS campaigns optimizing for ad revenue) between the US and “Rest of the world”. For the latter, you need to set a high target ROAS goal to filter out lower-quality users that would bring your eCPM down.
“When you can create anything, the bottleneck becomes deciding what to create.” - Mike Taylor (Co-founder of Vexpower & Author of Marketing Memetics)
See you next time. Stay savvy!
MAU live 2023 - Growths Gems, Creative testing processes, UA for apps vs. games! on the two & a half gamers podcast