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💎 Growth Gems #93: Monetization and Paid UA
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This week I’m sharing gems on:
These insights come from Matej Lancaric and Lana Dubinskiy.
🥇 TOP GEM OF THE WEEK
Paid UA: targeting, creatives
I don’t think I need to introduce Matej Lancaric (UA & Marketing Consultant) anymore.
In the episode 11 UA & Creative tips, 🦩 unleash your inner UA flamboyance (#59) of the two & a half gamers show, you not only get Flamingo videos but also some good UA insights.
💎 Some devices have better performance than others, particularly on Android. Since Android OS 12 now runs only on 6GB of RAM, you can exclude everyone else and improve your campaign performance with just one toggle.
💎 You can’t compare CPIs from mobile app install campaigns with purchase campaigns and value-optimized campaigns. This is why CPI benchmarks from different tools are usually off.
💎 Setting goals and defining a UA budget requires knowing:
Product KPIs, so you can understand down-funnel performance
Product roadmap, so you can plan more budget after some features are out (assuming performance will get better)
💎 D7 ROAS is the most common KPI gaming companies optimize against, because these cohorts are usually mature enough. In most cases, D1 and D3 is too early to assess performance. But you need to keep in mind different channels have different LTV curves. Example: FB D7 ROAS might 20% and reaching 100% D60 while Unity has D7 ROAS 5% reaching 100% in D30.
💎 Create D1/D3/D7 ROAS benchmarks for each platform and UA channels, an keep track of when 100% ROAS is reached. Then, measure and evaluate performance against these benchmarks. Keep in mind you need to recalculate them based on seasonality, company cashflow, scaling, features, and LiveOps.
⛏️ Going Deeper: on the scaling/maturity aspect, below is an example from Matej in his article 11 tips for killer User Acquisition ops (Q2 version). He also makes the very good point that it’s not only your “cost pers” that change: your retention profile changes as well.
💎 If you increase the budget, you target a broader audience and your payback period increases. For gaming, you typically want to increase the budget by about 20-30% on a monthly basis until your payback period hits the D90 “ceiling”.
💎 When calculating your payback period, you need to look at the net figures (e.g., after taking out the App Store and Google Play Store fees), not the gross figures.
💎 Consolidate your campaigns. Fewer campaigns mean higher budgets to leave the learning phase quicker. Group your campaigns into buckets and tiers, and put some money behind it. Make your tiers based on your LTV and ROAS numbers for the last 90 days. Example: US as a standalone, then “rest of the world”.
💎 Diversify not only UA channels, but also campaign optimizations:
You need at least 2 or 3 UA channels in the mix. Facebook is not the biggest share of impressions anymore.
Depending on your game’s monetization strategy: have purchase-optimization campaigns, app-event optimized campaigns, value-optimized campaign, AdROAS campaigns
⛏️ Going Deeper: in that same article, Matej gives some inspiration for event optimization in gaming.
💎 Define the different kinds of player motivations with your team, then ask chatGPT for concepts and copy to get some ideas.
Monetization: upsells, gifting
Steve P. Young (Founder at App Masters) has been hosting the App Masters podcast for a decade (I was actually amongst the first guests - luckily that episode is not available anymore).
Lately, he’s had a lot of experts on the show I want to hear from…so I’m playing catch up!
In The Power of a $5 Upsell and the Art of Maximizing Conversions, he talks with Lana Dubinskiy (Sr. Director of Product at IMVU) about monetization. Gems below!
💎 Add an offer for something else on your “thank you”/”purchase successful” page. This can work every time they get something, paid or free: after getting credits, watching a rewarded video, etc.
💎 Display other related products directly on the cart/checkout when a user is about to buy your product. Example: when users create a greeting card with an image, Shutterfly presents mugs and other things using that same image directly on the cart. Amazon does something similar.
🤔 My 2 cents: you don’t need to go all Ryan Air on people…But this is definitely under-utilized in the subscription world, and a great way to elevate the “low ceiling” that comes with the subscription model. A few subscription companies that do this well: NordVPN, Flo, Simple, etc.
💎 Don’t hide your paid content. If you put everything behind a paywall, users don’t know what is available if they pay. Instead, put everything in front of the paywall, but with the usage itself behind the paywall.
💎 Give a few things free to users, so that they:
Don’t get turned off and uninstall the app
Come back a few days in a row and start a routine, so you can convert them via push/discounts
💎 Other opportunities to present an upsell besides the “thank you” page:
When users experience a bit of dopamine, or have an exciting moment.
Using FOMO. If some users have a status in the app (e.g., VIP status), make sure you show the badges to other users and make it available with an upsell.
💎 You might get a higher LTV from users who spend $1 in the very beginning than if you hold out and charge $20 to the remaining smaller percentage of users after a while. Get them in for $1 and then they’ll continue spending for their lifetime. Example: discount the first month for $1 or $1.99 if they don’t convert initially.
💎 The initial paywall is jarring for some people (those that don’t convert right away), and they really need the warm up. Let them discover/explore the app and understand what they’ll be paying for before you give them a discount.
💎 You should be prompting users to encourage them to gift something to someone else. A lot of people are stingy spending on themselves, but will spend on others. Example: gift certificate, a month free, a yoga mat, buy one get one, etc.
💎 Gifting goes beyond revenue, and is a great way to also extend your userbase. Example: Audible suggesting to send a book for free to a friend, after you’ve finished it.
And before I leave, here is a quote from the ROAS is the Wrong Metric MAU talk on what’s needed to be able to understand your channels’ Spend vs. Profit curve:
“It’s our job as marketers to figure out where you are on that profit curve for different channels” - Thomas Hopkins (Fractional Head of Growth at Growthops.us)
See you next time. Stay savvy!
11 UA & Creative tips, 🦩 unleash your inner UA flamboyance on the two & a half gamers show (session #59)
The Power of a $5 Upsell and the Art of Maximizing Conversions on the App Masters podcast