7 reasons why you need to monitor marketing ROI maniacally in AC (After Coronavirus)

It’s tempting to start a marketing-in-the-Coronavirus-era post by saying that all of the old rules of performance marketing can be tossed out the window. It’s a different time. We’re in a volatile age. The future is unpredictable.

But that would be a lie.

Yes, we don’t know much about where things are going. And it’s true: uncertainty impacts marketing strategy and tactics.

But we do know that the same habits that made you successful in the past can make you successful today. You just may have to apply them a little differently. You have to be that much more agile. You do need some element of caution, but also a seasoning of risk tolerance. And, you absolutely do need to shake up your cadence.

Or, in other words, you need to monitor marketing ROI maniacally…

1. Past models aren’t predictive

Your past models were great. And they probably did a reasonably good job of predicting short and medium-term customer and user behavior. But the past is the past, and while in times of slow change (yes, the internet-speed dog years of the past decade are now slow change) they may have accurately modeled future results, you can toss those guarantees out the window now.

It’s just different AC (After Coronavirus):

“If previously players would hit a milestone after seven days, now with more free time they’re hitting it at day three.”
Rose Agozzino, Senior Marketing Specialist, Ludia Games

If you were checking metrics twice a week, double it. There’s so much change right now that user behavior is extremely volatile.

“If you were checking something every three days, check it every day.”
Martin MacMillan, CEO & founder, Pollen.vc

And as we move from shutdown to reopening to who-knows-what … this gets even more important. “Retention and monetization curves were RADICALLY different in March versus February,” Rovio and N3TWORK alum Eric Seufert says. Making decisions based on 4-week-old data might not work out.

2. Change is accelerated

Why aren’t past models predictive anymore? Change is accelerated in AC times.

Just one example: e-commerce sales in the U.S. jumped 50% in a single month. E-commerce has been only about 10-15% of total retail sales, growing 10-30% per year over the past decade or so. A single month of Coronavirus mainlined testosterone into digital sales, rocketing April’s numbers up 50% higher than March’s.

Adobe called it “Black Friday in April.”

“Our active user base has almost doubled in the last month. And activity has increased 2X of what it was during normal times”
Sai Srinivas Kiran G, CEO, Mobile Premier League

When things change quickly, you need to monitor them more frequently. That’s not rocket science. It’s just simple common sense. Because mobile publishers have seen the positive impact of COVID-19 metrics boosts as well as the potential negative.

(Talk to anyone in travel.)

3. Less margin for error

Look, times are tough. Even if you may be in a vertical that benefited from a lift in metrics since lockdown, the end result of tens of millions of people out of work and not earning a salary is not going to be good. A rising tide lifts all boats. A sinking tide … is also going to have an impact.

That means you need to conserve cash.

It’s important to understand what “conserve cash” means. It doesn’t mean lock up Scrooge McDuck and the big VC check in the bank and toss away the key. It does mean engaging in activities that have a defined ROI: particularly ones that have a shorter payback period and a higher confidence level in getting at least 100% ROAS.

“Capital efficiency is extremely important right now given that we’re likely at the turn of the business cycle.”
Grant Harbin, CEO, Headlight; Former VP Growth, KIXEYE

Not surprisingly, you maximize your opportunities for winning by closely monitoring campaigns and adjusting them as needed.

4. Channels are changing

What channels you use right now should NOT be predicated on what channels worked for you last year or last month. (If you’re wondering why … see above.)

There is currently massive upheaval in the global advertising ecosystem. Digital advertising rates are down 30%. Automobile ad spending is down — coincidentally or not — by 30% as well. (And with Hertz and other rental agencies tanking, that’s likely to continue. Rental agencies buy millions of cars annually under ordinary conditions.) Digital advertising has been somewhat spared, however. TV ads dropped even more: 35-50%.

What’s it all mean?

Costs are different. When Facebook and Google are staring down a $40-billion-plus revenue drop due to decreased demand, ad auctions are going to be less competitive and prices will drop. Clickthrough rates have likely changed as well. Entire verticals like travel are out of the picture.

That means channels you didn’t consider before — or channels that didn’t meet your ROAS criteria — might be interesting for you now. How are you going to find that out? By experimentation, of course.

Oh and — little hint — Singular offers bid data, which could highlight changing opportunities over time.

5. Consumer preferences are changing

We know consumer purchase behavior is changing. Consumer preferences are too. Just one example: how many more “in these challenging times” messages do you want to hear in ads?

I’m guessing: approximately minus 100.

When it comes to campaign messaging, you absolutely don’t want something that’s tone-deaf. But you also don’t want a message functionally equivalent to every other trying-desperately-to-be-sensitive brand sending out marketing and messaging right now.

“The rules of marketing have changed completely.”
Sunil Thomas, CEO, CleverTap

That means creative optimization — one of your last in-channel levers besides bids and budgets anyways, thanks to AI-driven black boxes — is a critical vector for testing. And the sooner you get it right, the less you’ll spend.

6. Segmentation is now more important than ever

Segmentation has always been important to tailor marketing and customer messages and offers. Now it’s more important than ever.

Every country is dealing with Coronavirus in a slightly different way. Within each country, different states/provinces/regions have different rules, regulations, and guidelines. Urban areas have different risk factors than rural. White-collar workers might not have had the shutdown that some retail workers had. Grocery employees faced a different reality than sales reps.

And not shockingly, how a customer or user reacts to a COVID-19 related marketing message might have a lot to do with his or her politics and beliefs.

Understanding your customers or users and treating them as much like individuals as you can has never been more critical. How? By leveraging your data.

“Our instinct has never been less equipped to help us through this. So we’re really doubling down on the data.”
Rebecca Nackson, CEO, Notable

7. You could be missing opportunities

There has always been gold in the adtech hills. With a sudden drop in advertising volume, there are now fewer prospectors chasing it. And that gives you an advantage.

Maybe you’re maxing out your budgets too quickly, finishing up your spend too early in the day or week. That might mean you need to reduce your bids or increase your spend, depending on whether or not your ROI and ROAS numbers are where you want them, and what your payback period is.

With a shorter payback period, you can take bigger risks and increase budgets. While it is a challenging time (cliche alert!) there are big opportunities for those who have the budget and the cojones to be aggressive.

“We’ve seen about roughly 20% uptick in terms of revenues. Retention is staying up there. It’s not across the whole industry necessarily, but what we’ve been seeing is falling acquisition costs, and lifetime values are holding up. That’s basically putting some clear blue water in the CAC to LTV equation, and actually enabling them to double down faster in terms of their own acquisition.”
Martin MacMillan, CEO, Pollen.vc

As another marketer told me recently, this is a once-in-a-lifetime event. There are challenges, but there are also opportunities. We will exit this time, and some brands will exit like a bull charging from a tunnel into the arena. Some will walk out, and others will just limp out.

A lot of that depends on externalities like vertical, VC cash, and geography. But you should control what is within your control.

Not able to measure your marketing in near-real-time across multiple marketing platforms? You should chat with Singular.

Are you an SMB marketer? Apply for free, 180-day access.

App uninstall rates and coronavirus: Lockdown is bad for retention

Apparently, consumers having a lot of time on their hands is bad for mobile app retention.

Just possibly, they’re using all that free time to Marie Kondo their smartphones. And, sad to say, if your app doesn’t spark joy … sparks fly.

We know that the Coronavirus shutdowns have boosted app installs. We know that organic app installs are significantly up, and up more than paid app installs. We also saw that paid user acquisition was up early in the shutdown thanks to hot categories like gaming, retail, and social.

But what about retention?

And what about app uninstall rates?

We recently pulled a 330 million install dataset stretching back to January 2019 to see where app uninstall rates have been trending over the past 16 months. And, of course, to see if the COVID-19 shutdown has had any impact on uninstall behavior. The short answer is: absolutely yes.

Uninstall rates have jumped as much as 35% in 2020 compared to the same month in early 2019.

Looking at uninstalls: average rate is 36%

The average rate of uninstalls across all 16 months and all mobile operating systems is 36.4%. In other words, for every 100 times an app is installed, 36.4 uninstalls follow.

(Note that this chart can be somewhat misleading: the blue uninstalls were actually installs initially.)

Note that this doesn’t mean that retention is super-high, over 60%. It means that 36.4 times out of 100, people actually physically delete an app that they’ve installed, removing it from their phone. There’s a lot of app abandonment that doesn’t involve installs. After all, how many screens or folders full of apps do you have on your phone that you haven’t touched in months, if not years?

Personally, it’s probably something like 3-4 screens of app icons, plus a few folders.

Android uninstall rate is 2.5X more than iOS

In our dataset, a sample size of 330 million app installs, Android users uninstall apps significantly more than iOS users: at a rate 267% higher, in fact.

While the average uninstall rate across iOS was a tiny 14.9%, Android had an uninstall rate of 39.8%. Note that this doesn’t necessarily mean that iOS users abandon apps less frequently than Android users do, it may mean that Android users clean old and unused apps off their phones more frequently.

Caveat:

There are reasons to believe this data is biased due to geographical trends. This sample includes Singular customers in India, which are comprised of roughly 90% Android users. I’ll look at this again with a larger dataset in the future to see if this pattern holds for all regions.

The COVID-19 uninstall bump: it’s real

The uninstall rate jumped significantly in 2020 compared to 2019.

The uninstall rate on Android for the first four months of 2019 was 33.8%: almost a third of installs ended in an uninstall. For the same time period in 2020, that rate ballooned to 52.15%. All of a sudden, more than half of all installs ended in an uninstall.

On iOS the change was less significant. The 2019 number was 13.38% while the 2020 number bumped up just slightly to 16.1%. Again, both numbers are for the first four months of the year only.

It would be hard to say that all of this change can be attributed to coronavirus, because some of it happened in January before any shutdowns had taken place in the Western hemisphere. Even in China, shutdowns only started in the second half of the month.

But, despite the fact that what we’re seeing here is correlation, not necessarily causation, it’s clear that in 2020 there’s been an increase in app uninstalls. That started slowly, at just under 11% in January, soared in February to almost 27% higher than the previous year, dipped in March, and absolutely blew the barn doors off in April, at an almost 35% increase.

Note that all these numbers are percentage growth over the same-month numbers in 2019.

It’s challenging to understand exactly what’s going on in March — why the dip? — but the overall trend is clear: significant growth in uninstalls during times of coronavirus shutdowns, lockdowns, and quarantines.

So … what’s going on here?

It’s important to remember that installs were up too, as I mentioned off the top. Potentially what’s going on here is a lot of trials and testing: installing an app just because, and deleting it when you’re finished with it.

That’s what mobile expert Eric Seufert thinks. There’s a ton of “app tourism” going on during the coronavirus shutdown, he told me via Slack. In addition, he added, retention and monetization curves look radically different in coronavirus times than they do in previous months.

Here’s the harsh reality for marketers:

When we go through radical change in society — tens of millions out of work, hundreds of millions out of school, billions in various stages of shutdown and quarantine — that’s going to impact consumer behavior in significant ways. Some of them might be predictable. Some of them, not so much.

Ultimately, your best protection in these uncertain times is to have access to real-time data that informs real-time decisions, so you can adjust your strategy to fit the needs of a volatile market. To learn more about how Singular can help you run optimized marketing campaigns, request a demo!

Singular & N3TWORK: ‘great and passionate people behind great products’

You can have the best marketing technology in the world. In fact, you NEED the best marketing technology in the world to really optimize for growth. But if you don’t also have the best people helping you get there, you’re only getting part of the way to your goals.

The technology is 100% necessary.

And so are the people.

And while no-one’s perfect, the global group of people that make up the Singular customer success team come incredibly close. We know that from a number of data points, but most recently thanks to a recent email from Nebojsa Radovic, who leads the user acquisition platform at N3TWORK. N3TWORK makes Legendary: Game of Heroes and last year launched the N3TWORK Scale Platform, which helps other game developers crush their marketing goals.

We asked Nebo if we could share his email. When you read it, you’ll understand why:

“Hi Singular friends,

I hope you are doing well in these, well, weird times and that you are safe and healthy. A good thing about working from home for me was getting more time to slow down and reflect on a lot of things. This includes thinking about some really amazing companies and people I have had a chance to meet and work with. You guys are, without a doubt, definitely one of them and I want to thank you for that. 

There is one special shout out though as I think a big part of that experience is working with Josh. This is why I thought it would be nice to reach out to you and share this feedback with you. He’s probably the best account manager I’ve ever worked with – in my career – and he made our Singular experience utterly delightful. It is an absolute joy to work with great and passionate people behind great products and he had a key role in this process. 

I am aware this is probably unexpected but I feel like customer success people get so little praise from their clients for the hard work they do. Instead, all they get is snarky and aggressive comments. I decided to change that for a bit. 

Hope you don’t mind the unsolicited feedback. He obviously has no idea about this. Stay safe and amazing dear Singular family.

Nebo”

No one demands that Singular customers succeed as much as our customer success team does. They work hard day-in and day-out to advocate for their customers, so getting this kind of recognition for their efforts is literally amazing. When it was shared in our main Slack channel, I couldn’t just like it and move on. It needs to be shared further, because it’s indicative of how Josh and every other member of our CS team give their blood, sweat, and tears to ensure that Singular clients get the absolute best that we can give them.

Nebojsa Radovic
Nebojsa Radovic, N3TWORK

That’s especially true right now, as we’re still facing massive marketing changes thanks to COVID-19. And it’s something that clients like DraftKings and Zynga have also learned.

I took a bit of time to chat with Josh Pancoe, who Radovic specifically referenced. Josh leads Singular’s U.S. customer success team (we also have teams in EMEA, APAC, and India) and here’s what he had to say:

John: Why was this particular client so happy?

Josh: Our CS team is always customer first. I’m incredibly proud of the fact that we strive to be an extension of their org/team through all facets of our partnership, and Nebo was awesome/gracious enough to share his feedback. I can tell you that every single person on the US team and globally in EMEA, India, and APAC consistently produces at the same level of excellence and I know that our customers see that every day.

John: What are the toughest challenges that clients face?

Josh: The marketing landscape moves at a rapid pace, which demands that our customer’s tools, services and resources evolve at the same or higher rate. So many variables are at play managing and operating complex marketing infrastructures, and the challenges are endless really. It would be reductive to just boil it down to attribution and data collection. We’re focused on trying to simplify their challenges as best we can and maintain a proactive approach. 

John: It has to be stressful at times, because this is really high leverage and some clients are running at hundreds of thousands of dollars in marketing spend … how do you keep a level head?

Josh: I don’t think this is ever about budgets, spend, monthly active users, etc. Singular deals with customers of various shapes and sizes where the scale can be massive but it’s not the primary focus at the end of the day. Our team always does whatever we can to ensure that they are getting the most value out of Singular and our partnership. That’s in the current iteration of our product, as well as how we can continue to evolve in the future to meet their needs.

John: What’s your goal in every customer encounter?

Josh: That my clients know that we are always their biggest advocates (internal and external), no matter what the context or scenario.

Question:

Would you ever write a letter praising your customer success contact? If not, you’re missing out.

Contact us and find out what amazing support and true customer success feels like.

Creative in mobile game advertising: what wins and why

Cold hard cash to advertise a game is great. An exciting, fun product to market is extremely important. But few factors, if any, beat amazing, compelling creative in mobile game advertising.

Creative grabs attention. It incites action. It compels conversion.

Nielsen says that the quality, messaging, and context of your creative is responsible for as much as 49% of all sales lift. That’s more than five times as much as targeting, and more than double reach. Great award-winning creative is so powerful that ads that win awards generate a full eleven times more market share growth.

So apparently creative is just a little bit important.

That’s why we interviewed PeopleFun’s Design Director, Lee Eisenhuth, and Applovin’s Director of Marketing, Alice Guillaume, for the latest edition of the Growth Masterminds podcast. PeopleFun makes hit games like Wordscapes, and Applovin helps market the world’s best games. What they shared sheds light on the process, magic, testing, and alchemy of mobile game advertising.

Subscribe to Growth Masterminds on your favorite podcasting platform:

And, scroll through key quotes and a full transcript below.

Key quotes: Creative in mobile game advertising

Click-through rate and conversion rate can be mortal enemies

Creatives that are really short bites, like really short, or have messaging or mechanics that are primarily aimed at having a user click, yield a high drop-off at the very end.

– Alice Guillaume, Senior Director of Marketing, Applovin

For some, quantity points out the path to quality

“We have a hundred or so ideas, but we only do creative testing on a half dozen or so per month.”

– Lee Eisenhuth, Design Director, PeopleFun

In mobile advertising, time is in very short supply

So we really have about one to two seconds these days to captivate users in an ad.

– Alice Guillaume, Senior Director of Marketing, Applovin

I … need to teach a game and how it works very quickly.

– Lee Eisenhuth, Design Director, PeopleFun

Mobile game advertising is a copy-paste world

As soon as we find a winning concept, very quickly it’ll get replicated.

– Alice Guillaume, Senior Director of Marketing, Applovin

Would you ever advertise games you haven’t completely made yet, just to test the marketability of the concept?

I do think that’s a step that we’re considering to try next.

– Lee Eisenhuth, Design Director, PeopleFun

Full transcript: creative in mobile game advertising

John Koetsier: How do pink cows, purple velvet shoes, and stone pillows help you beat the competition?

 Welcome to Growth Masterminds with John Koetsier. This is the podcast where smart mobile marketers get even smarter. Today we’re talking about creative, all other things being equal … best creative wins. And sometimes even when they’re not very equal, the best creative wins.

So we’re not talking about shoes today and we’re not talking about pillows, or cows, or anything like that. But we are talking about blasting that box, right? Getting out of it. Doing the unexpected, being creative. 

Today we’ve got two guests we’re going to talk to. Our first guest has been a designer, a game designer, a lead game designer, and now design director at places like Happylatte, Demiurge Studios, and Subatomic … in China and the Boston area. And if you caught one word in particular there, it was designer. Lee Eisenhuth now leads design at PeopleFun, which makes games like Wordscapes. Thanks for joining us, Lee. 

Lee Eisenhuth: Very happy to be here. Thank you. 

John Koetsier: Wonderful. Our second guest started out as an equities analyst at Morgan Stanley. After two years, she discovered that that sucked, so she moved to mobile and marketing, and never looked back. She’s been at her current company almost six years in no fewer than five roles, which means either she’s super awesome and keeps getting poached, or she’s horrible, and people are passing her off. I’m pretty sure it’s the former. 

Alice is a Senior Director of Marketing at Applovin. Welcome, Alice. 

Alice Guillaume: Thank you for having us. 

Staying safe during COVID-19

John Koetsier: Excellent, excellent. Hey, I want to ask, I want to start this off, I’m doing almost all my interviews these days with this … How are you guys doing? Where are you? And are you safe in the current pandemic?

Alice Guillaume:  we’re doing really great. I’m currently based in San Francisco. Our company is well equipped and fully committed to supporting our customers. We’re all working from home right now. Our teams are working hard and most importantly, we’re making sure that all our employees are staying safe.

John Koetsier: Awesome, awesome. And Lee, how are you doing? 

Lee Eisenhuth: Oh doing good. Everybody is working from home, happy to be able to work from home. A little bit harder for the parents. I have a three-year-old daughter who’s bouncing off the walls, but I think we’re doing pretty well … 

John Koetsier: Excellent, excellent. I’ve interviewed a few people with kids and one of them has a trailer, so he moves out to the trailer and that’s his home office, sort of in the yard somewhere, but occasionally the family dog needs to get put in there as well with him so he’s got some barking going on in the background. But hey, we do what we have to. 

Best creative wins: from 100 ideas down to 6

So let’s get into it. We know the best creative wins, right? But what is the best? Is it something that’s odd? Is it something that’s quirky, maybe amazing or intriguing? Some thoughts on that from your perspective, Lee …

Lee Eisenhuth: so for me, the way I usually work with SparkLabs, is we work on new game creative testing a lot. And so when we work on new game creative testing, we focus mainly on controlling them so that they can be tested side by side. So I don’t think that we necessarily try to make them  different or kind of special. We’re mostly trying to test the gameplay against each other so that we can say that the intro and the outro are the same, the duration’s the same. The look and feel is similar, but the gameplay itself is different. And then we check the gameplay against each other to figure out which one people are interested in, and which one are they clicking into, and which game is marketable. 

John Koetsier: Interesting. So if I’m understanding you, you’ve got an ad, it’s got an intro and an outro, the beginning and the end. You want to keep your branding fairly on point and the same across all those. And then you’ve got, maybe it’s a playable, maybe it’s a video, and you’re showing some segment of what’s happening in the game, and you’re making decisions based on what sort of performs in that? 

Lee Eisenhuth: Yeah, we have company-wide brainstorming and ideation, and we have a hundred or so ideas, but we only do creative testing on a half dozen or so per month. So we have to carefully choose which ones we think are promising, and we make a pretty detailed presentation where it takes kind of like a single level of gameplay, and steps slide by slide what the player experiences, and try to really capture what’s special about this game. And then we pass those on to SparkLabs and Alice, and they do a wonderful job trying to really understand what is special about this game, and make it really shine through in the creative. 

John Koetsier: Excellent, excellent. Interesting. Let’s talk a little bit about it from your perspective then, Alice.  What makes for the best creative, and maybe we’ll go general first and then we’ll dial in on exactly what Lee was talking about.

If you look at it in general, what makes for the best creative? Is there something that makes it for the best creative, or is it kind of a crap shoot and different all the time?

One to two seconds: time to capture attention

Alice Guillaume: That’s a great question, absolutely.  I think for SparkLabs what we really spend time focusing  what is the motivation of the players who like this game? And how can we captivate them with the right marketing messaging?

So we really have about one to two seconds these days to captivate users in an ad. Very, very short amount of time. So that’s a key thing is what do you use as the hook.

Then I would say the second best practice is making sure you’re telling a clear story. I think the mind does work in a linear and nonlinear fashion, it’s a bit easier to capture when it’s linear. So we make sure that there’s progression and it’s clear to users what’s going on.

And then I think the third piece that’s really important is evoking a positive emotion. So that can be in the form of humor, curiosity, feeling smart, all those things give users that, you know, mix of chemicals in the brain that makes them want to engage further. So those are the three things we focus on is: captivating the audience, telling a clear story, and evoking positive emotion.

John Koetsier: Excellent. 

Alice Guillaume: Yep. 

Ad creative: the magic is in the details

John Koetsier: Very, very cool. Do you have some examples of some of the creative that you’ve done maybe recently that’s really just blown it out of the water? 

Alice Guillaume: Yeah, I would say there’s a lot of magic to creatives, and this is the piece that I think really opens up those moments of ‘aha’ or ‘wow,’ like I love seeing creative that really amazes you out in the industry. And what makes them amazing is actually a lot of the subtle touches of a creative. You can storyboard something out linearly, but the way you execute it can really differ from designer to designer.

A good example to your question of a creative that I’ve made that really performed well, and was beautiful, was a renovation customization playable we had done. And what made it really stood out is we picked really beautiful scenes with beautiful areas to upgrade, and then the designers really added amazing touches of sparkles, good camera zooming, good timing, good pacing.

These are all really subtle things that really create a holistic, magical experience that ultimately makes a user take a second look and want to check out the app store and hopefully download. 

John Koetsier: Nice.

Lee, do you have some thoughts of some creative that you’ve seen maybe in the past few months or whatever that, hey, that actually, that was amazing for me?

Lee Eisenhuth: For the creative that SparkLabs has developed for us, I think it’s really interesting because I do need to teach a game and how it works very quickly, and I think watching how that unfolds is really interesting. We can watch some creatives where people instantly understand it and they’ll click on it in the first few seconds, and we know that they’ve somehow managed to teach it immediately, and we have other creatives which players will watch for 20-30 seconds, the whole way through and not click on it , or maybe they will.

But that creative was very compelling to them, it was something that they were willing to spend because they can close out of it, but they were willing to spend that time watching that creative. And by the end of the creative, they understand it well enough to make a decision on whether to click through it or not.

So I think I’m not sure which one in particular is especially amazing, but I think  just overall watching how the gameplay is shown over the course of the creative is really interesting to me.

User psychology: to click or not to click

John Koetsier: Cool.

Alice, do you have some idea of the psychology that’s going on in a player’s mind as they click in the first few seconds, or as Lee said, they watch for literally 30 seconds, 20 seconds, and then either click or don’t click.

What’s going on in the mind?

Alice Guillaume: Yeah, this is super interesting.

So currently there’s a lot of trailers out there that are a little bit more offbeat and less relevant to the game. I’m sure you have seen some of these where it’s using probably a bit more cartoony assets, not actually matching the game, and then the mechanic has nothing to do with the game either. These can be things like two characters walking through a scenario and each scenario they’re presented with two options and they have to choose, right? Like they’re faced with a bear and they decide to give the bear honey or throw dynamite at them, and then a series of events or disaster events that either end in a fail or win.

Another one of these are like puzzles, so you presented with pins to pull and there’s a character on the bottom and then if you pull the wrong pin, the lava, the top will release and fall down and kill that character, right? These videos have been saturating the market and to some extent they have become very, very marketable in high-performing creatives that are not relevant to the ad.

I think these creatives are ones where users tend to click earlier, they have high click-through rates because the psychology behind this is it’s more of a push than a pull psychology. It’s pushing you to do something based off of whatever is going on in your context of play.

So this is definitely from the motivation of the player, this is more what is the context you’re playing. You could be playing to pass the time, playing to escape, playing because you’re waiting in the bus or the doctor’s office. And so it’s that short term stimulation and then when presented with the puzzle, you feel smart, you feel superior, and as a result you will engage to get that feeling.

Versus a, let’s say, relevant-to-game video where you’re showing gameplay using relevant assets, it’s beautiful, it’s a narrative, you want to find what happens next so you’ll watch, it’s like watching a movie trailer. You’ll watch to the end and you know, you had a great time, it was a great experience, it was entertainment in 30 seconds. But potentially not willing to commit all the way through to installing, unless you’re absolutely the right user that was marketed to.

So those are the two psychologies. 

When NOT getting the click might be better

John Koetsier: I find that super interesting because I’ve been in that situation. I mean, we all have, right? 

We all play a few games, I mean, the percentage of people who play some games is huge, it’s massive, it’s 80-90% of people with a smartphone, right? And so you get targeted by ads and you see them and sometimes, I think it can be a good thing that you don’t get the click, because you’ve watched it and said, ‘Yeah, that’s interesting, interesting. I don’t think I’d like that game.’

And so you don’t click, you don’t get that install.

That’s a good thing because you know what? I wasn’t going to be a longterm user of that app anyways right? On the other hand, if that was mistaken and you showed me something, and this is to one of Lee’s points of different types of gameplay, and you showed me something and you showed me a piece of the game that I wouldn’t like, but there is a piece that I would like maybe,  then you’ve got challenges there.

It’s an interesting challenge. 

Alice Guillaume: 100%, definitely. 

Does process kill creativity?

John Koetsier: Good. So let’s talk about creative process. Does process kill creativity?  Do you let some ideas just go through unfiltered? Do you A/B test everything? Alice, why don’t you go first on this one? 

Alice Guillaume: Yeah. So here on SparkLabs, we’ve been operating for about seven years, so we have been in industry for a while. Our process has evolved a lot through the years.

I think I’d say seven years ago it was impressive to have a nice, beautiful banner ad. These days it’s you’re expected to be able to produce a playable ad across any studio. And as a result of that evolution our process has changed. I think when I first started out on a more personal level, it was more structured, more easy to templatize and replicable across anybody on the team because we have a fairly large team, around 30 to 40 people.

And now as the market has evolved, that’s adapted to become more fluid because the need for innovation and that human touch of creativity is so much higher, because it’s so much harder to outperform. 

As soon as we find a winning concept, very quickly it’ll get replicated in the market anyways. So what we have evolved to now is process that doesn’t kill creativity.

You need some guidelines so that you’re steering the team towards a specific goal. Let’s say we want to drive high volume, or like you said earlier you want to drive high quality users that will stay in the game long term. But outside of that, really allowing creatives to be creative, and play, and experiment in an intelligent manner where we can gather valuable learnings and test solid hypothesis.

John Koetsier: Yeah. Super interesting. Lee, what are your thoughts there? I mean, what’s your process, because of course you’re overseeing this, you have people who are making things for you, but you’re kind of putting the pieces together and you’ve got the end result there.

How do you use process versus just some magic?

Lee Eisenhuth: Yeah. I think one of the nicest things at PeopleFun is our ability to A/B test anything.

So in the past, every decision was just very, very hard because you had to make the right decision and you didn’t always have all the information to make the right decision. And a lot of times things are killed in development.  You spend months on a feature and it doesn’t work out, or even you release it and people don’t like it. But now we can A/B test just about anything.

So anytime somebody has an idea, I’m happy to say that we can just try it. 

It makes me feel really good and it’s especially good because I can make some guesses and over time I can watch the results and see how that turns out.

I think the limiting factor is typically time. So we have like a suite of new games that we’re releasing at PeopleFun. So with these new games, I really need to drive results pretty rapidly and decide which games are the winners or losers, and which we’ll support. So I think in that situation, I need to go for the low hanging fruit, things I know will succeed. Things like daily puzzle, or  different longterm retention features. 

But as we build up the design team and the product team, we kind of let people just spend time ideating and brainstorming, and when we have time, we can do more risky features. And I’m not worried about that because we can just A/B test it. So I think that process  helps a lot.

Although with limited resources, we do need to prioritize where we spend our time on the best and most reliable opportunities,  I think as we grow the team and through AB testing, and even creative testing, for example, testing art direction creatively, we were also doing that with SparkLabs. I think there’s a lot of opportunity for creativity. 

Ad creative: Alchemy and algebra

John Koetsier: I love that. I love that because obviously you’re a very technical guy. You’ve built games, designed games and other stuff like that, but you’re allowing room for that creativity.

It reminds me of an interview I did recently with Rory Sutherland. He is at Ogilvy, UK. He’s also a TED speaker with 7 million views of his TED talks, and he talked about using data to explore, versus using data to exploit, right?

And there’s different strategies in those, exploring new horizons, different things, versus exploiting what’s really, really working. And he made the point that, you know, sometimes in companies, everything that’s awesome, some accountant would say ‘no’ to, right? His book is about alchemy, about the magic and finding that, and finding ways to make that happen. 

Alice, how does that work into your process?

Alice Guillaume: Yeah, so here at SparkLabs, we are very data driven. So, I like what you said about using data to explore rather than exploit it. I think we resonate with that as well, because we are trying to constantly find the next thing. So we make sure we understand what’s going good.

We look at your ads, your research, then we brainstorm and then we formulate hypotheses to test, and then we control for those variables through the creatives  we test. For example, my theory is that people love playing WordScapes because they love feeling smart, then I want to tap into messaging that evokes a sense of challenge, a sense of training the brain, a sense of completionism.

Then we create that ad, and then we test it and we analyze the results, and we see  are we driving the type of users we want to be driving? Are the metrics panning out the way we want it to? If so, great, or maybe more likely these days it’s, you hit some marks and you miss others, and that’s when it gets really interesting and sophisticated as you start to play with different levers and the creative that you can actually see tangible results.

Right, if I tweak a creative to have an interesting intro or an interesting end modal, I can see that conversion rates get higher or lower, or click rates take the opposite direction, and then I can start to really play to get the results that really helps PeopleFun achieve their business goals. 

CTR vs CVR: mortal combat?

John Koetsier: Interesting, very interesting. Do you ever have it that you find some creative that works really, really well on click-through rate, but not so well on conversion, or vice versa? 

Alice Guillaume: Absolutely. I would say that creatives that are really short bites, like really short, or have messaging or mechanics that are primarily aimed at having a user click, yield a high drop-off at the very end.

John Koetsier: Interesting!

Alice Guillaume: Which is, yeah, which is something we actually don’t really want to spend a lot of our time on. We want to be driving high quality users to help these businesses and our partners grow sustainably in the long run. 

John Koetsier: So what you’re saying is there’s a high correlation between the length of the creative and the conversion rate, as a result of a click on that creative. Is that correct? 

Alice Guillaume: Yes, I would say that is correct. If you build out a longer and more immersive mechanic, then what you’re doing is you’re raising the bar on the player showing their intent of engagement. 

Ad creative: new games vs existing games

John Koetsier: Interesting, interesting. Okay. Very, very cool. Let’s talk about new games versus existing games, and what changes in marketing them.

It was funny, I was talking to somebody at Supercell, probably about three months ago or so, and for some of their iconic games, which are these massive brands in their own rights, they keep the same creative for three months or six months or something like that. It’s just very different than almost anybody else in the industry, right?

What are your thoughts and how do you approach creative for a new game versus creative for an existing game that already has an audience? 

Alice Guillaume: So for new games, I view it as a blank canvas where, we’re just starting to figure out who the right demographic is and what type of branding and messaging we can put out there, which is very, very exciting. So we cast a very broad net.

So everything I discussed earlier, we do but at high production output, where we are throwing darts at the dartboard and trying to see what sticks. Then you can start to hone in and zoom in. So that’s one approach with new games.

With longer running games, these I find very interesting because it’s a bit more challenging. Where you already have a preset, of ads that, like you had mentioned, work well and have likely been running sustainably for a long term and you need to beat that ad out. And in mobile buying, most likely these creatives have some inherent learning as well, which makes it even harder to beat them out. Because you either have to augment the current messaging or find a new niche or target a messaging that stands out from what has been done before and that’s challenging.

So with those, what we’ll most likely do is do deeper dives on how can we elevate that motivation that we’re seeing.

For example, if people love solving puzzles and it’s a puzzle game, but I can’t make 2,000 or 3,000 more puzzle ads because they’ve pretty much all been done, then we start to really push the boundaries of thinking about what are other puzzle meta games they can try and still use a relevant branded asset so that we can start to bridge users towards that new way of looking at this game. And then what we’re doing a result is bringing in more pockets of quality users that haven’t been tapped into before, but can also be aligned with what that product provides for them. 

John Koetsier: Again there’s interesting psychology there, right? Because I’ve personally had it where I’ve seen an ad for a game multiple times. I’ve even heard of the game outside of an advertising context or something like that, I’ve ignored it, ignored it, ignored it, and like the 10th time or the 20th time, oh, what the heck, I’ll give it a shot. And so…

Alice Guillaume: Totally, exactly.

The creativity in making new games …

John Koetsier: Lee, I want to ask you from your perspective, what’s the toughest part about creative when you’re marketing games?

Lee Eisenhuth: The hardest part for me is just trying to find out, of the games currently on the market, can we twist them a little bit to make something new? What spaces are there? What opportunities are there for something totally new? What do players want?

You know, we work a lot with word games and casual puzzle games so we’re looking at why do players like word games, what do they enjoy about it? And we’ll take something like that and explore that from a game design perspective with brainstorming and presentations, and it takes dozens of ideas to come to just one that may be worth creative testing.

To me, that’s the hard part.

And I think if we manage to find something that looks fun, and word game players or casual game players may enjoy it, we still don’t know. You know, one of the things I learned is there’s so little that developers control. We make guesses and we try to put fun things together, but we need to do this marketability testing because we don’t know what players really like.

We spend a half year, or a year, or two years making a game and then nobody clicks on the ad.

It was a waste of time. So I think that that’s where we’re trying to kind of merge the creativity of design with something scientific, and that’s kind of where we’re collaborating on. So in terms of the creative itself, I don’t actually give too much input on that. The only thing I care about is whether or not it accurately reflects the gameplay.

Because if it is really great and everybody clicks on it, but then it’s not the game that we think will be fun, then we’ll have a game that is marketable but not really playable.

Maybe that’s lower attention or we can’t teach it, so I guess that’s where we intersect. 

John Koetsier: I absolutely love that because I have had that as well, where I’ve seen ads that bear almost no relationship to the actual game. And the ad looked great and you click on it, and the game is nothing like the ad, and that basically is a quick delete.

And worse than that, a kind of a pissed off attitude towards the studio that brought you that game, right? And so you actually have kind of a built-in negative reaction to anything else that the studio brings out. So that’s really, really smart.

New opportunities and marketability studies

I want to follow up on something that you said there, Lee, and you talked about marketability studies. When does that come in? And do you find yourself running ads for games that don’t exist, so that you can see, hey, this concept has legs, we should go farther on it? 

Lee Eisenhuth: Yes. So when we have our brainstorming and ideation, we split the games up into two categories. One is considered our portfolio game, and the other one are kind of new opportunities.

The portfolio games are ones which are kind of an existing space, a game that kind of exists, maybe it’s a word search game or some puzzle game, and those, we don’t creative test. We don’t need to creative test those, we can look AppAnnie or other sources to kind of guess the opportunity there. How big is the market size? How much competition there is.

But for the ones which there is no reference for, that’s where we have to creative test it. Yeah, I would guess if we have ten games creative tested, there may be one or two that is worth moving forward from. And from there we would go to prototyping and we’d put something together in a few days and try it out because maybe we thought it was a great idea. Maybe people also thought it was a great idea, they click on the ad, but then when we prototype it, it’s actually not a good experience. So anyway, that’s just what I was thinking. 

Advertising games you haven’t (totally) made yet?

John Koetsier: That is super interesting. So I just want to follow that for another half a second before asking Alice her perception on the same topic.

So somebody actually clicked on that ad and what did they come to, did they come to kind of a prototype game to like one level, to almost a playable ad, or how far did you go on that development there for that game that you’re considering building?

 Lee Eisenhuth: I think for our current creative testing there’s nothing to play, but I do think that’s a step that we’re considering to try next. We haven’t really carefully considered the sort of cost or benefit, but I think that that would be awesome if we did have a game, which we decided was marketable, and then we prototyped it and we felt that it was fun and could retain users for months.

Then the next step would be really nice to do some sort of testing where we could get a real CPI cost per install from a prototype and an ad. 

John Koetsier: Really interesting.

Alice, want to ask your thoughts on that, because of course it’s great to have great data before you invest millions of dollars in game production, right? And potentially 10x that in marketing costs. And yet you also want to have a good experience for somebody who clicks on an ad for a game that turns out to be a prototype. 

Alice Guillaume: Yes. So, let me backtrack a little bit because you had asked two really big questions.

One is what is the greatest challenge of creative marketing? And two is how do we tie that into prototype testing. I think a lot of what Lee said, I definitely echo and resonate with.

I would just add on for what’s challenging for creative marketing is, the irony is, for myself where I’ve been doing this for several years, that neutral mindset going in is really hard to maintain, because it’s very easy to be, you know I can be Joe, and I already when you tell me mid-core game, I’m ready to think all of these things from my past and I’m trying to reconcile that with the new game.

Which means I probably already set myself on a path of bias.

So that neutral mindset is really hard to let go of. And the second piece I would say is, I actually think mobile gaming players are different from PC and console players, and I think the palette of understanding what they like is not necessarily super well-defined or in the same type of language as PC and gaming.

So as as a result, right, we were talking about these ads that don’t have relevancy to the game, but for some reason they’re still performing well. I think that’s a function of, if you were to ask the mobile gamer what type of games do they like or not like, they may not be able to fully even define that. And you know, that includes myself too.

It’s a different media.

So as a result, marketing towards mobile games is partially science and partially experimentation design like Lee said, because that palette hasn’t been fully defined yet. And the way it’s going to be defined, I think it’s going to be a little different than PC and console as well. So transitioning that into how do we then do creative marketing for potential future games, when the game isn’t done, right? I think we look at things like how much the engagement is happening with video even, or how much engagement is even happening with the playable.

Nowadays with playable analytics, you can also dive a little bit deeper into where do people drop off? Are people engaging? And so you can gather those metrics without a full game being developed. Or if you do have a game developed, great. Or you can find something in between that says, in app store, ‘This game is being worked on. Come back later when it’s ready.’ 

John Koetsier: Nice, nice. Love it. 

 I’m glad you could join. Lee, it was a real pleasure. Thank you so much for your time. Alice, it was wonderful to hear from you also, and great insights. Very much appreciate all of your time. 

Alice Guillaume: Thanks so much, John. Appreciate your time. 

John Koetsier: You bet. Have a great day everybody. Stay safe. 

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Coronavirus and mobile app installs: accelerating change

Overall Findings

  • Global app installs: up almost 20%
  • Categories continuing to grow: entertainment, business services, communication
  • Categories recently hot: betting, dating
  • Categories cooling: gaming, news, on-demand delivery

It’s been two months since the novel coronavirus was declared a global pandemic, and we’re still coping with a lot of hardship and uncertainty. A third of the world is still under some form of stay-at-home.

Not surprisingly, this pandemic is changing how we spend our time and money as well as what we’re doing with our mobile phones. Game publishers in China saw record revenue during the worst parts of its lockdown. Retail mobile apps jumped 34% in March.

And organic app installs were way up globally in April.

We’re now past the initial stages of alarm and shutdown, which saw games and news jump the most in-app installs. Most of us are still at various levels of quarantine, but we’re starting to begin the process of defining a new normal and going through a challenging societal debate on when and how to re-open society and re-engage the economy.

So what’s still changing? What’s growing right now?

We analyzed a massive sample of almost a billion app installs to find out.

Business services are still up significantly. Entertainment is still up. Clearly, people have found things other than live sports to bet on, because betting is way up. Communication and social apps are still going up, as people are feeding their need for human engagement. And while dating is slowing down a little, it must still be monetizing, as paid installs are significantly up.

What spiked earlier and is now settling down?

Categories like gaming and news are still hot but have subsided from their massive spikes. Financial services have cooled a little: we’ve gotten our banking apps and insurance apps. And we’ve downloaded our investment apps to see how much we’ve lost due to the stock market collapses.

On-demand apps, like those for the delivery of food, are cooling as well. If you needed DoorDash or Instacart or Uber Eats, you got it a few weeks ago. And while retail is still up, retail subscriptions have cooled: we might be worried about jobs or layoffs, and whether we’ll be able to afford those ongoing subscriptions in the future.

Let’s look at each of the categories that are growing

Business services
Both paid and organic installs are up almost continuously over the last four to six weeks.

Those who can work at home are working at home, and they’re finding that when you spend more than a few days doing it, you need all the right tools to work with others and support your business or your job.

 

Entertainment
Organic installs are slowing a little for entertainment apps and platforms, but brands know what’s going on. Following the advice of leading CMOs to take advantage of historically low ad prices, they’re working hard to continue acquiring new customers.

 

Betting
Organic install behavior in the betting category is off the charts in recent weeks. Interestingly, it’s happening at the same time as paid user acquisition is dropping off. You’d assume some of that post Super Bowl, but the trend has continued.

What are people betting on without live sports?

Virtual horse races, maximum daily temperatures, contestant results in the TV show Survivors, and just about anything else you can think of. Including, until official word was released, where Tom Brady would end up signing.

 

Streaming
Huge growth in organic installs in the streaming industry have continued throughout the month of April.

Netflix has been a massive beneficiary, but so has Amazon and its subsidiary Twitch, where streaming is up significantly since lockdowns began. By some counts, streaming media viewership has doubled since COVID-19, and that’s not showing many signs of slowing down.

 

Health & fitness
Health & fitness generally has a natural bump in both paid and organic customer acquisition in early January as everyone tries out New Year’s resolutions. But the category has also significantly grown since Coronavirus shut down gyms: everyone who wants to keep working out needs to replace weights, equipment, and instruction via at-home gear and subscriptions.

 

Retail
Retail’s been interesting.

There’s been significant demand throughout the year, but we’ve seen an additional spike in just the last few weeks. One of the challenges has been out-of-stock situations at regular sources, and limited delivery windows at others. That’s forced digital shoppers to expand their usual small list of retail outlets and try new ones.

 

Social – communication
April’s been a big month for social and communication tools. It’s generally a hot category, but now we’re particularly hungry for additional means of connecting with loved ones.

 

Social – dating
Who would have thought that Zoom would be a dating app? While it’s not included in the data shown in this category, people are using Zoom for speed-dating that would ordinarily be done in in-person settings.

That’s just one of the things that are making dating an interesting category. While organic installs are declining as people likely believe that dating strangers during a pandemic is problematic, paid activity is way up. What’s going on? Dating apps are reinventing themselves and adding features to make virtual dating fun.

One example: Tinder made its “Passport” feature free for all users so that they can change their cities and “date” internationally.

 

Change keeps accelerating

As we see increased pressure in the U.S. and elsewhere to re-open economies, mobile app install behavior will continue to change and marketers will have to adjust as well. We’ll be re-examining this next few weeks.

Meanwhile, accelerated change means more work for marketers, even in tough macro-economic conditions.

“As many businesses quiet down during challenging times, this is a critical time to push ahead and stand out,” Anna McNaught, an entrepreneur and Instagram strategist, told us recently. “It’s a chance to create innovative content, inspire potential customers, and become a leader in your industry.”

We’re trying to help. Singular has released free tools and support for SMB marketers impacted by COVID-19.

Until next time, stay safe and well!

Marketing trends before and after the coronavirus shutdown: what a billion app installs show

Overall Findings

  • Overall app installs are up 19%
  • Organic app installs are up 21%
  • Paid app installs are up 15%

 

What we’ve seen already

Millions have been impacted by coronavirus medically. Billions have been affected financially.

When we last looked at the implications of coronavirus on app marketing, we saw that in spite of the challenges, gaming ad spend was up 25%, e-commerce was up 34%, and social media was up 29%.

Since our last post, we’ve learned much more about the financial impact. And in an effort to do our part, we released free tools and training for 180 days to help SMB marketers adapt their advertising tactics to all the changes.

Now let’s get into the latest data and look at what is changing as a result of this unprecedented global shutdown.

My focus this time: comparing pre-shutdown 2020 with post-shutdown 2020. In other words, what has changed in the mobile marketing space as a result of shutting down massive segments of our economy?

To do so, we compared data on about a billion app installs, looking at changes from weeks two to nine (January and February, primarily) to weeks 10 through 17 (March and April, mostly).

App installs are up

Overall app installs are up 18.9% from the first two months of 2020 to the most recent two months.

On one hand, that’s not terribly surprising. Seasonal data from 2017, 2018, and 2019 show us that in the U.S., there’s typically a jump in mobile marketing and app install behavior from calendar Q1 through Q2, jumping again to Q3 and culminating just slightly higher in Q4.

Outside of the U.S., we see a big jump from Q1 to Q2 and lower Q3s and Q4s.

So part of this could be seasonal.

The reality, however, is that 2020 is anything but a normal year. An early March report by a UN agency said that COVID-19 would likely cost the global economy $1 trillion. More recently the World Economic Forum, however, pointed out that not even during the Great Depression of the 1920s or World War II did huge segments of the global economy just shut down. As a result, the International Monetary Fund, now estimates the cumulative loss into 2021 to be about $9 trillion.

In other words, this is not normal. We haven’t even stabilized to a new normal yet.

The good news for mobile marketers: while nothing is easy or even good right now, they’re in the right sector at the right time. Everything is going digital as physical distancing protects us from wider infection. App installs could have just totally cratered if they were following the overall economy.

But they’re not.

We’re using Instacart to get our groceries. Doordash to get our food. Walmart and Amazon to get necessities delivered. We’re ordering online and picking up curbside. We’re moving social engagement to HouseParty and Facebook and TikTok. We’re moving work and productivity to Zoom and Microsoft Teams and Slack.

Organic installs are disproportionately up

But it’s not just app installs that are up. Organic app installs are disproportionately high.

Paid app installs are up 15% over the pre-shutdown 2020 weeks. Organic app installs — those generated by unprompted visits to Google Play or the App Store to find and download a new app — are up 21%. And it’s not just an organic uplift impact.

Organic uplift is when paid marketing generates a halo effect of more-than-usual organic behavior as well. It can be due to algorithmic optimization: a marketplace like an App Store sees more activity for one particular brand or app, assumes it’s trending, and features it or highlights it more. It can also be due to good old-fashioned word of mouth marketing: people talking about new products, brands, or services that they’re experiencing.

But while organic uplift is a thing, a significant study I’ve done on it in the past suggests it’s often around 1.5X … one unit of paid activity driving half a unit of additional organic activity.

That can be different for super-viral categories, but overall — and this is an all-category dataset — I’ve seen it at about 1.5X.

In raw numbers, however, the organic boost is 3.4X. And in terms of percentage of app installs being organic, we’re seeing percentages in the high 60s moving towards the mid-70s.

Some of the categories we’re seeing that happen in are obvious, like streaming.

We’re essentially seeing 2X peak organic downloads for streaming apps compared to the floor in the first two months, which was already high. Meanwhile, paid has barely budged, with a slight increase in week 13, but subsequent decreases. (Note: the above chart is missing a day of data for the last week, so the effect is even stronger than pictured.)

Health and fitness follows a different pattern but illustrates the same point.

While health and fitness was up in the first full week of 2020, that’s normal and expected. New Year’s resolutions are kicking in, and people are buying fitness equipment, installing workout apps, and focusing on losing all the weight they gained over the just-finished holiday season.

It then drops, also naturally, in January and February, but rebounds and hits new highs in April. Why? People are shut down and locked in: they can’t go to the gym. So the gym has to come to them, and the living room or spare bedroom becomes the new home gym.

Overall, organic installs are up across all categories by over a fifth, and we can attribute that to changes in consumer shopping, leisure, work, and learning habits. (Again, the above chart is missing a day of data for the last week, so the effect is stronger than pictured.)

Whether this is a trend with long-term legs, of course, is another matter. Everything is too volatile right now to be certain of much. One thing that seems clear: where Coronavirus is accelerating trends that were already existing — digital retail, eSports, on-demand services, and so on — we’re likely to see sustainable growth, even if there’s some retrenching post-Coronavirus.

Ad-driven app installs are also up: 15%

It’s also interesting to see that paid user acquisition is continuing and even increasing, during the shutdown. That’s probably partially thanks to lower advertising prices: Sai Srinivas Kiran, Co-founder & CEO of Mobile Premier League, a 35 million-user esports platform in India, told me that his customer acquisition costs have dropped by 50%.

And we know that savvy marketers take advantage of opportunities.

As Bob Benz, president at Advanced Telecom Services, told us a few weeks ago, advertising is literally a better deal today:

“It’s counterintuitive to purchase stocks when the market is tanking, but all the experts will tell you it’s the best time to do so,” Benz says. “It’s the same with advertising. Today, Facebook and Google advertising is 20% cheaper than it was pre-coronavirus and internet use is at an all-time high. Take advantage of it! You may never have this opportunity again.”

So paid UA is up 15% across the board from the first two months of the year to March/April

Next week: what’s hot in specific verticals

There’s a lot more work here to understand trends and interpret data, of course. Next week we’ll look deeper into specific verticals to understand what is really happening as a result of COVID-19.

Until then, stay safe!

 

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CMOs on coronavirus: 250 marketing leaders on what to do now

Support. Communicate. Be sensitive.

Don’t stand still. Try new tactics. Offer something special.

And above all, don’t try to profit from a crisis.

 

Marketers at every company on the planet are wondering what to do in the coronavirus era. Over a million people have fallen ill with COVID-19, hundreds of thousands if not millions are at risk of dying, and cancel everything is the mantra of the day. Social distancing is required for protecting lives—but not everyone can work remotely, and the economy has lost millions of jobs, with the looming potential of millions more.

Those jobs support families. They pay for health care. They support lives. And marketers keep the wheels of commerce turning that fuel that engine. While there is some good news, marketers worry. A down economy seems imminent, and that makes growth hard.

So I asked about 250 marketers for their top three tips for customer acquisition and growth in our current challenging situation. Here’s what they said.

Marketing after coronavirus: don’t stop

Not one marketer said “shut down.” No one said “give up.” Everyone said that now was the time to act with courage. And every marketer insisted that the proper response—with sensitivity—was to find a way to connect and help, and prepare for the future.

What many of them did suggest is that first, marketers double down on empathy to the community and service to their customers.

“A pandemic is not the time to sell, it’s a time to serve,” says Sara Vami, CMO at cloud communications platform giant Twilio. “Make sure your organization is providing tools and information that are of value in the moment.”

And, while you’re doing that, now is also not the time to think small. On the contrary, it’s the time to expand the possible.

“Creative, bold ideas … enable marketers to find success despite economic burdens,” says former Apple CEO John Sculley, now chairman of the board and CMO at medical company RxAdvance. “Marketing professionals should continue to explore gaps where they can reach … audiences and acquire new customers.”

4 major themes: More, New, Keep, Build

Because I asked marketers an open-ended question, I had to draw patterns and lessons out of unstructured data in over 250 responses. (Deja vu, marketers?)

Four themes dominated, but one was central: don’t stop, but do adjust.

That means more digital commerce, says Tom Murray, CMO of the world’s largest bedding provider, Tempur Sealy. More of a focus on research and science, hygiene and safety … and knowing where people are.

“People will continue to spend more time at home—on TV, on their phones, and on news and social media channels,” Murray says. “As a result, in-person and live events will be different. So, just as what marketers say now is increasingly important, so too will be where we say it in order to best reach consumers.”

It’s important to be clear: it is not being insensitive to the unfolding tragedy around us to keep working and continue marketing. We don’t have to completely stop everything and absolutely give in to the crisis to show respect for those most impacted in terms of lives and livelihoods.

Quite the opposite.

It’s actually a productive response that, done correctly, can help pull all of us out of the economic crisis that is following the health crisis.

“For so many people, life has become so unexpectedly hectic and frightening,” says Jaime Punishill, CMO at Lionbridge. “It’s important right now that businesses keep going. Marketers are on the front line of the economy. It takes sales to pay vendors and employees, revenue to keep a business running.”

We do have to stay respectful. We do have to find ways to help, especially those who are on the true front lines: doctors, nurses, and other health care practitioners. But keeping the lights on is an important way to help everyone who depends on the economy for survival. Revenue to keep a business running is rent money and food on the table for employees.

And that’s what pretty much all of us need.

73% of marketers suggest doing more marketing

Whether it’s doubling down on advertising or doubling down on content marketing, most marketers think that now is the time to work harder, not take a break. We might be in our home offices, but we’ll have to put our work boots on.

Almost a third, 28% of marketers, said they would double down on advertising. Many, like Bob Benz, president at Advanced Telecom Services, argued that ads are cheaper now. Advertising, he says, is literally a better deal today:

“It’s counterintuitive to purchase stocks when the market is tanking, but all the experts will tell you it’s the best time to do so,” Benz says. “It’s the same with advertising. Today, Facebook and Google advertising is 20% cheaper than it was pre-coronavirus and internet use is at an all-time high. Take advantage of it! You may never have this opportunity again.”

About one in five said that now is a good time to increase your content marketing, realizing that while closing new business might be harder now, customer acquisition starts long before someone enters credit card details or signs a contract.

“Focus on current content that builds relationships with those who can develop into future customers,” says Chelsea Carlyle, a social media marketing consultant. “Now, more than ever, content is king. While someone may not be able to convert [everyone] to a client/customer because of the economy right now, you have an excellent opportunity to put helpful content in front of them that puts you top of mind in the future.”

Others pointed out that marketers need to make hay while the sun isn’t shining.

“As many businesses quiet down during challenging times, this is a critical time to push ahead and stand out,” says Anna McNaught, an entrepreneur and Instagram strategist. “It’s a chance to create innovative content, inspire potential customers, and become a leader in your industry.”

About 15% of marketing leaders suggested focusing on organic growth over paid marketing tactics, and 12% were planning to focus on social media.

64% of marketers suggest adjusting your offers, strategies, and tactics

A majority of marketing leaders also plan to adjust their marketing strategies and tactics. In other words, they’re not just doubling down on what they’ve always done: they’re changing because the world changed.

“Right now we’re not just facing a down economy, we’re facing a shift on how people become familiar with, purchase, and receive products and services,” says Ian Kelly, VP of Operations at NuLeaf Naturals.

How companies react to our new and evolving normal is critical.

“It’s not the biggest or strongest that survive, but those that adapt best,” says Vanesa Levin, CMO at HCH Management. “Similarly, in order to survive and grow during a down economy, companies must be able to adapt and stay relevant.”

That means that marketers need to craft creative strategies, Levin adds. That means shifting your value proposition and adapting to the times. And it’s not just about lipstick on the pig. It’s not only about marketing. Your product may need to adapt too.

“Give them a quick-start solution,” suggests Tammy Jackson, CMO at Sonic Foundry. “Chances are your prospects are trying to solve challenges they’ve never faced before, and they’re trying to do it quickly.”

While 43% of marketers are focusing on new strategies and updated product offerings, 21% are also going to the place that most marketers never want to: discounts.

“Offering discounts works,” says Morgan Taylor, CMO at LetMeBank. “Right now that is what your potential clients need, and what you can do to help them. Which in turn, will help you.”

Others suggest a free tier of service, a limited-time offer, or creative discounts that don’t cost your company too many missed dollars, but do have high perceived and actual value. Some of these options might be painful, at least right now. But they might be necessary to maintain, share, or grow.

“Make compromises in the short term to benefit in the long term,” says Greg Holtzman, a director at Brainbase.

54% of marketers favor focusing on retention and service

A dollar in your hand is worth two in the forest.

Maybe even five or ten dollars.

Keeping your existing customers is the first essential step to growing, as all software-as-a-service companies know. And keeping your existing users in already-paid-for cohorts is also critical to long term return on investment and return on ad spend, as all mobile app marketers know.

“One of the best survival tips that you can ever have is to take care of and keep in touch with your clients,” says Chad Hill, CMO at Hill & Ponton.

“Marketers should be throwing out their old playbooks filled with third-party data strategies and instead focusing on retaining and supporting current customers,” says Richard Jones, CMO at Cheetah Digital.

New customer acquisition is hard at the best of times. New user acquisition, in mobile apps, is expensive, and most of your new users leave within a few weeks. So an extra emphasis on treating your existing customers and users like royalty goes a long way to solidifying existing business.

A major bonus: you know how to contact them essentially for free.

“Double-down on re-selling to your past and current customers,” says Stacy Caprio, who leads marketing at Her.CEO. “People who have already purchased from you in the past, and know and trust you, are the most likely to respond to an exciting, special, or discounted new offer or product, and you can even use low-cost channels such as email, organic social, or low CPM re-marketing to target them and drive up sales.”

45% of marketers are building capability now for future benefit

Down time, if you have it, is a great time to invest in long-term priorities. Some of the urgencies that ring your phone or ding your Slack have tailed off. Now you might have some time to pore into projects that will help you immediately, but also pay dividends well into the future.

16% of marketers suggest focusing on improving marketing efficiency via attribution, optimization, and other means.

Others, about 15%, are spending time building systems, processes, and capability in their marketing teams that, they hope, will pay off after the crisis. And 14% are doubling down on digital transformation projects around the company to be better aligned to serve customers via mobile and web.

The goal here is to emerge from the coronavirus crisis lean, mean, and positioned to win.

“This is a time to laser-focus on your marketing attribution model,” says Aaron Branson, VP of Marketing at Netsurion. “Clear ROI is going to be demanded from each marketing program spend. Cut spend in the soft spots, double-down on the areas that are generating quality leads, not just quantity of leads.”

That’s good advice at any time. It’s vital counsel during a downturn. And when recovery hits, efficient marketers who extract the maximum ROI from their campaigns will be best positioned to reinvest in faster growth.

One of the reasons why it’s especially important now?

It’s an existential need.

“The bean counters are coming for you. In a recession, marketing is usually the first to get cut,” says Mike Terry, VP of marketing at Anvil. “Prove your value by sharing the measurable results of your marketing efforts and your marketing team.”

Proving your value is great. Finding the activities that are the most valuable is essential. Most critical of all is keeping a tight lid on user and customer acquisition costs, because you don’t have the same probability of ROI in a crisis that you did in a growth economy.

“Examine all your marketing spend and double down on those activities that are yielding the
lowest customer acquisition,” says Mary Ellen Dugan, CMO of hosting company WP Engine.

“Focus ruthlessly on acquisition costs,” says Carly Brantz, CMO of DigitalOcean. “Set limits around spend and your expectations around results so that as you see areas of growth, you have the ability to increase spend and if you don’t see growth you can pull back. Most importantly, don’t invest during this time in channels that don’t have a clear return on investment.”

The best of the rest: CMO’s coronavirus advice

There was simply too much input and too many great quotes to not include more good advice. Here’s a selection of the other quotes I received, organized into a few key categories.

Double down on empathy and service
Focus on organic growth
Adapt focus/strategy/tactics
Double down on quality advertising
Build now for future growth
Create new offers, discounts, price tiers
Improve marketing efficiency
Focus on retention
Don’t hijack a crisis
Stay calm … and engage in self-care for your team

Double down on empathy and service

Come at sales with a service mindset. Think in terms of what customers need now as opposed to what they historically needed from your company.

Wendy O’Donovan
CEO, Big Buzz Inc

Give back and invest in your customers’ success. This time is hard for everyone. So now more than ever it’s time to be empathetic and ensure that you are giving value to your customers. We’re taking time to give our customers our time—learning about their successes and struggles and seeing how we can help. Their feedback is key to how we’re thinking about our future products.

Tricia Gellman
CMO, Drift

Provide value. A pandemic is not the time to sell, it’s a time to serve. Make sure your organization is providing tools and information that are of value in the moment.

Sara Varni
CMO, Twilio

Acknowledge the situation. Show empathy. Don’t hop right into how great your product is.

Momchil Koychev
CMO, CodeGiant

Do good things. Tell people about them. In this time of crisis, look for areas where your company can help.

Jeffey Duran
CMO, GroupSense

Now is not the time to sell. Many execs are receiving a barrage of hard selling from companies desperate for cash. Everyone’s under the gun to streamline and tighten budgets. The last thing they need is you hounding them for a project.

John Pabon
Founder, Fulcrum Strategic Advisors

Keep building relationships and practicing empathy. During this uncertain time, it’s important for sellers and marketing teams to practice empathy. Things are not business-as-usual and it’s okay to acknowledge this in the conversations you’re having and the content you’re creating.

Russell Wurth
VP Sales Enablement, Showpad

Don’t pitch, listen. In a down market, if you have a sales call it’s a gift. Don’t squander it by giving your typical pitch. The situation is not typical so listen to the experience your client is having. At least you’ll know more about what they need.

Keren Moynihan
Co-founder, Boss Insights

Now isn’t the time to stop talking, it’s the time to adjust what we’re saying. It’s all about pivoting previous content strategies. What problems are your clients/customers facing and what information or services do you have to help?

Chelsea Carlyle
Social media marketing consultant

Enter the conversation going on in your prospect’s mind. Now is the time for extreme empathy. What are their dinner table conversations like right now? You can (and should) still promote your product, but you must first acknowledge and speak to their current situation.

Billy Bross
Founder, Linchpin Media

Focus on organic growth

A down economy is not the time to get complacent. We have to get aggressive and creative. Really work on asking for referrals and word of mouth, network, build out your online presence and work on increasing your search rank … things that generate leads with minimal capital investment. Being creative is what makes a business thrive regardless of economic trends.

Gabriel Bertolo
Radiant Elephant

Our current clients have been given the option to pause their monthly fee with us with the simple exchange of them putting us in touch with a potential new client, a referral. We have made five new contacts and have client proposals to arrange over the next two weeks.

Brett Downes
Studio Fifty-Four

Utilize email marketing. The companies I’m working with are seeing a big spike in email open rates, clicks, and sales during this coronavirus pandemic.

Billy Bross
Founder, Linchpin Media

Adapt focus/strategy/tactics

Plan marketing outreach on a week-by-week basis rather than a monthly or quarterly basis. This situation is changing quickly and customer sentiment on how they want to be approached is linked to how they feel.

Benish Shah
Chief Growth Officer, Loop & Tie

Don’t kill events. Rethink them. We’re planning invite-only events where people can learn and grow and really talk to each other. The key is to ensure these feel like a special event, not just another webinar.

Tricia Gellman
CMO, Drift

A bakery in my neighborhood retrofitted their shop with a walk-up window two days into the crisis, and their ability to move quickly to new customer needs has saved their business.

Sarah Stockdale
CEO, Valkerie

Tweak your value proposition. The reasons why people bought from you before may be different than why they’ll buy your product now.

Vitaly Pecherskiy
CMO, StackAdapt

Prioritize the aspirin products. An aspirin is a true painkiller that solves a real problem for a company, like enabling e-commerce in a time where physical shops are closed. Vitamins are nice-to-have products that can increase efficiency here and there, but they’re not essential to run the business. It will be hard for companies to sell vitamins in the next quarters, so business leaders need to shift their focus on their aspirin products.

Marcel Hollerbach
CMO, Productsup

When the economic strings tighten, it’s important to focus marketing efforts on prospects who are showing intent. Now is not the time to cast a wide net. It’s important to focus efforts on those who are in-market, as your sales cycles and opportunity win rates will be significantly higher.

Shane Phair
CMO, Decibel

We have become people-to-people, conversational in everything, let’s hear from you and talk about how we can help you continue your work. Everything we’re doing now is more interactive and we’re taking the time to respond in a way that I hope lasts beyond these next few months.

Cynthia Gumbert
CMO, Smartbear

Focus the marketing organization on a single messaging track … your audiences are likely dealing with the crisis and economic downtown in a similar way, so remember to empathize with them and highlight how you can help them. Evolve your messaging so it resonates today,

Karl Van Den Bergh
CMO, Gigamon

Make it as easy as possible for customers to work with you. Make the sales process as self-serve as possible. Take out any bumpy parts of your process. Give them multiple ways to do business with you—talk to rep, email, fill out online form, etc. That might mean adopting new technology into your processes.

Kim Saxton
Professor of Marketing, Kelley School of Business

We created a #RaveFromHome series that has been very successful and is a direct response to the virus outbreak … we are shifting our marketing from mostly festival clothing to focus now on other uses of our clothing such as lingerie or loungewear.

Brandon Chopp
Digital Manager, iHeartRaves

Be flexible: once you’ve really heard what the market needs, change your product to meet the needs of the day. Package it differently or allow a customer to use only what they need.

Keren Moynihan
Co-Founder, Boss Insights

In a down economy, it’s more important than ever to understand your true value propositions and how you are different from your competitors. Don’t assume you know what makes your customers love you and refer you. Ask them. Interview your best customers and ask them what is the #1 value they get from doing business with you. Use their responses in your messaging.

Marilyn Heywood Paige
CMO, Paige Black

Really solidify your brand positioning. This gets overlooked in a great economy. When it is easy to make money few go the extra steps to really create a solid position. These are the ones
that tend to fail when the economy is slow. A slow economy is a great time to
really understand your branding and refine your positioning.

Gabriel Bertolo
Radiant Elephant

Double down on quality advertising

Do more marketing. While most companies are decreasing their marketing spend, you should double the time and money spent on marketing. People are locked up and all they do is read and follow what brands are doing.

Jane Kovalkova
CMO, Chanty

With our brick and mortar stores closed, we have increased advertising and exposure online. This includes social media and paid search. With many of our competitors totally shut down and our company still able to ship out product, we have seen a huge increase in online sales.

Jeff Moriarty
Marketing Director, Moriarty’s Gem Art

It’s counterintuitive to purchase stocks when the market is tanking, but all the experts will tell you it’s the best time to do so. It’s the same with advertising. Today, Facebook and Google advertising is 20% cheaper than it was pre-coronavirus and internet use is at an all-time high. Take advantage of it! You may never have this opportunity again.

Bob Bentz
Advanced Telecom Services

At a time when brand budgets need to go further than they ever have, marketing leaders should take a close look at where spend is allocated and if it’s optimally netting customer visibility/acquisition in this unique media consumption environment. In 2019, it was reported by ComScore that roughly 60% of all digital ad dollars went to Facebook and Google, yet according to what we found in a new consumer survey with the Harris Poll, this is not necessarily the best use of marketing dollars. There are quantifiable reasons to reallocate funds to the open web – sites like Forbes.com, Candy Crush Saga, and Recipes.com.

Joey Leichman
VP, OpenX

Build now for future growth

Communicate! Your consumers want to hear from you.

Jeffrey Tower
VP Marketing, Charge After

My favorite growth strategies right now are all focused on building long-term assets that will help you accelerate sales whenever the world starts getting back to normal.

Yaniv Msjedi
CMO, Nextiva

Play the long game by ensuring engagement and adoption doesn’t slip in order to protect your renewal and then look for ways to promote user expansion or complementary elements of your portfolio.

Mike Hicks
CMO, Igloo Software

The best leaders I know use downtime to invest in their business to come out stronger. My advice is to keep close to your customers. Focus on serving, protecting and retaining them. Understand their changing needs and anticipate how you can help them now and when the economy heats up again.

Jakki Geiger
CMO, Reltio

Think of the long game. A lot of people aren’t able to spend money right now, but you can still earn their trust and provide value. Interact with them on social media, and don’t push a ton of sales. Provide value, and establish yourself as a leader in your industry. Any farmer can tell you that you have to plant the seeds to get the crops. Use this time to plant those seeds with potential customers. Earn their trust, go the extra mile for them, and provide them with valuable content. They’ll appreciate the extra attention and make a purchase with your company when their life and finances are back in order.

Nick Flint
CEO, Pure Cut Supplements

Shift your key performance indicators from sales to audience reach and engagement metrics. You won’t be able to prove an ROI while you have nothing to sell, but you can cultivate new customers who are ready to buy when you reopen. Then you can measure the ROI of all the marketing you did while closed.

Danielle Glick
President, Training Owl

Offer something for free as a sign of solidarity. Not only is your company being seen in a positive light, but giving away something for free can also help to introduce companies to new potential customers who may otherwise never have considered doing business with particular companies. Travel companies could for instance offer free virtual tours.

Roy Morrison
Growth Strategist, Meaningful Profits

Pay it forward
Clients might need something other than what you can provide. Connect them to the right people. You won’t make a sale, but you’ll help your client, gain a networking contact and be seen as a problem solver.

Keren Moynihan
Co-Founder, Boss Insights

Just like my clients, I too have more time on my hands than normal. It’s important to use this extra time to accomplish to-do list items that have been put off due to a hectic schedule. Instead of shutting down, tackle your marketing projects and emerge as a stronger company/business when this is over and business gets back to normal.

Ryan Hardy
Luxury Real Estate Broker, Gold Coast Realty Chicago

Build brand loyalty. Hard selling isn’t going to work right now, but you do have the perfect opportunity to reach out to potential customers/clients and see if you can help. This is the time to be visible, and helpful. In the long-run this could be work better than directly marketing, and helps to establish what your brand stands for.

Morgan Taylor
CMO, LetMeBank

Direct your strategies to email acquisition. Consumers are more reluctant to purchase right now; grow your email list with gated content for now and then prepare for a bigger launch once things return to normal.

Andrew Maff
CEO, Bluetuskr

 

Create new offers, discounts, price tiers

Offering discounts works: One way to help your client base is by offering remote consultations, discounts, and showing you are willing to go the extra mile. Right now that is what your potential clients need, and what you can do to help them. Which in turn, will help you.

Morgan Taylor
CMO, LetMeBank

Make compromises in the short term to benefit in the long term. We recently announced that Brainbase will be the first and only licensing management platform brands can use for free forever … even though we are giving away our product for free to these companies who qualify, we are hoping these companies turn into paying customers if their businesses grow and that the good PR will bring us greater awareness.

Greg Holtzman
Marketing Director, Brainbase

In a slow economy, people are more prone to shop around and give more thought to their purchases. Adding more value than your competition is a key way to stay afloat and even thrive in a recession. Whether it is giving something free, offering more for the price or offering better discount strategies like these can keep a business ahead of the competition.

Gabriel Bertolo
CEO, Radiant Elephant

Adjust your rates to cater to a struggling economy – In doing so, you may be a more viable option over your competitors while still providing the same level of high-quality services. This is a perfect time to offer discounts for new customers, add-ons or bonuses, and additional value for longer-term partnerships.

Anna McNaught
Consultant

You need to have some kind of sales funnel that starts with building trust. Give them something they need and make it free. People will be looking to start over and need to do so at little to no cost.

Dan Bailey
President, Wikilawn

Improve marketing efficiency

This is a time to laser-focus on your marketing attribution model. Clear ROI is going to be demanded from each marketing program spend. Cut spend in the soft spots, double-down on the areas that are generating quality leads, not just quantity of leads.

Aaron Branson
VP Marketing, Netsurion

Fight for your marketing budget … the bean counters are coming for you. In a recession, marketing is usually the first to get cut. Prove your value by sharing the measurable results of your marketing efforts and your marketing team. Brands that increase advertising spend during a recession, when competitors cut back, can improve market share.

Mike Terry
VP Marketing, Anvil

Double down on your data. We all complain about not trusting our data, but the reality is the room for error here has gone to zero. Now more than ever we need to know exactly what is happening in our business, what levers we can pull to impact change, and we need to know that information now – not tomorrow, not next month, not during business reviews but now.

Lauren Vaccarello
CMO, Talend

During an economic slowdown, you must optimize your sales efforts. The best way to do that is to dig into the intelligence of your customer relationship management database. Your CRM is a treasure trove of insights that can guide you during a slowdown to greater productivity and sales.

Marilyn Heywood Paige
CMO, Paige Black

Repurpose your events team … with in person events, conferences, and even meetings now a thing of the distant past – everyone initially wanted to switch to virtual conferences. A dreadful idea that guarantees zero engagement and little actual attention. What has been effective is switching to virtual customer advisory and community sessions where you facilitate (non-competing) customers to share with each other and enable a two-way flow of communication.

Andrew Hatfield
Director of Product Marketing, Portworx

Act, don’t operationalize. This is hard for me, because I’m a systems thinker. I typically implement repeatable processes and technologies to be efficient. In a disruption-driven economy there’s no time for that. The market is in such turmoil that anything you build today won’t apply post-pandemic. Now is the time for action and you’re in a battle to stay alive.

Bryon Morrison
CEO, Proxxy

Focus on retention

Resist the urge to send mass emails or communications. Start at the top with company executives calling the most loyal customers. Work on down, having salespeople and marketers make one-on-one calls to customers as well. The opening line on these calls is, “I wanted to check in on you. How are you doing in this moment?” Very few competing organizations are likely to do this, and it will go a long way in stabilizing the current customer base, building brand equity and even inviting referrals.

Wendy O’Donovan Phillips
CEO, Big Buzz Inc

One of the best survival tips that you can ever have is to take care of and keep in touch with your clients.

Chad Hill
CMO, Hill & Ponton

Marketers should be throwing out their old playbooks filled with third-party data strategies and instead focusing on retaining and supporting current customers.

Richard Jones
CMO, Cheetah Digital

Maintain current clients and provide added value – It’s important to maintain the relationships that you currently have in order to acquire new customers. During hardship, people need to stay connected and by staying at the forefront of your client’s mind by offering helpful solutions, not only are you adding value to them but they will most likely refer your business to others.

Anna McNaught
Consultant

Talk to your customers EVERY DAY and ask what they need to be successful and
what makes life easier for them.

Nicholas Farmen
Digital Strategist, Spire Digital

Focus on staying in contact and connecting with your existing customer base. During this time consumers are going to stick to the brands that they trust best.

Andrew Maff
CEO, Bluetuskr

Double-down on re-selling to your past and current customers. New customer acquisition is
particularly hard during this time period, since people aren’t looking for new products or services, or even to spend money in general. However, people who have already purchased from you in the past, and know and trust you, are the most likely to respond to an exciting, special or discounted new offer or product, and you can even use low-cost channels such as email, organic social or low CPM re-marketing to target them and drive up sales.

Often, you can even create a more in-depth and higher-priced offer that offers more than you ever even thought of offering in the past, and sell this at a higher profit margin to your most loyal customers during this time period, making it an opportunity to make this one of your best months or quarters.

Stacy Caprio
Consultant, Her.CEO

Don’t hijack a crisis

If you don’t help with coronavirus or COVID-19 crisis specifically such as masks or other medical necessities, don’t use those phrases in your marketing. It’s capitalizing on a tragedy and your audience may not forgive you. Rather, focus on the situation that the crisis has caused and how you help. For example, do you help employees collaborate in a “work from home” environment?

Bill Evans
CMO, Netwrix

Marketers simply cannot ignore COVID-19 and act like business is usual. At the same time, adding more noise to the conversation only adds to the paranoia.

Sarah Tourville
CEO, Media Frenzy Global

The biggest marketing turn-offs these days include tone-deaf business-as-usual promotional messages as if nothing’s going on. On the other end of that spectrum are marketers trying to make everything about COVID-19 all the time.

Cynthia Gumbert
CMO, Smartbear

Stay calm … and engage in self-care for your team

Be transparent and support your team! We frequently communicated our short-term, mid-term, and long-term plans well over a month ago. We reassured our teams of where they stood, the health of the company, and the levels of responses we would initiate to remain sustainable over time. While we have not enacted anything extreme yet, the transparency has helped our teams focus on the job at hand, rather than their job security in such a time of uncertainty.

Nadya Khoja
CGO, Venngage

It is important to stay calm and don’t make any panicked decisions. It will be tempting to follow other companies’ lead, but this is unknown territory for everyone so what others do, isn’t necessarily the right move. Stick to your marketing strategy, organize, don’t go overboard and don’t make it off-brand.

Kine and Einy Paulsen
Partners, Kinfizz

If you can’t avoid a downturn in business, complete as many projects as possible from your marketing wish list. That way you can have things in place for when the economy rebounds.

Dan Gower
CEO, Buddy Gardner Advertising

Dig out all the recent research reports that you have had no time to fully read and go through all of them with a fine comb. Perhaps then your professional life had been too hectic, but now is a good time to read and understand everything carefully. That will better prepare you

Mayank Batavia
Director, Marketing and Partnerships, QuickEmailVerification

Using AI to boost customer acquisition, with IMVU’s VP of Growth, Lomit Patel

How do you grow faster, even in challenging market situations? Oh, and cut the cost of custom acquisition by a factor of three, while also accelerating 100% return on ad spend 5X at the same time?

Well, good data is a baseline requirement. As are insights on what’s working and what’s not.

But AI can help too.

In this episode of Growth Masterminds, we talk to Lomit Patel. Patel is the VP of Growth at IMVU, and previously led performance and digital marketing for Roku. He also ran customer acquisition at Texture, which Apple acquired and turned into Apple News+.

Lomit Patel
Lomit Patel, VP of Growth at IMVU

So he knows a few things about growth and customer acquisition. (In fact, as a social app, IMVU is actually growing right now in the coronavirus pandemic.)

He also wrote the book on AI for growth … literally. Patel just published Lean AI: How Innovative Startups Use Artificial Intelligence to Grow in March. It’s full of practical advice on how to use AI to scale growth and user acquisition.

Listen to the podcast:

Key quotes and insights: accelerating customer acquisition with AI

On marketers using AI for growth:
“Less than 5% are really doing this right now.”
-Lomit Patel

Lomit Patel on the three eras of customer acquisition:

  • Customer acquisition 1.0: aggregating all your data
  • Customer acquisition 2.0: providing clean data to your ad partners
  • Customer acquisition 3.0: using AI to automate budget allocation between ad partners

Customer acquisition is the new day trading:
“We’re basically just acting like day traders because we’re seeing bids shifting from any given partner at any given time. And what that enables us to do ultimately is have higher confidence that we can really hit our goals at the end of the day and end of the month.”
-Lomit Patel

On building the AI yourself, or partnering:
“One of the things that we ended up doing was to really kind of do a good and honest audit in terms of where our skill sets really lie at IMVU, and it was pretty clear that we didn’t really have a lot of the core capabilities to really build something like this ourselves.”
-Lomit Patel

What automation enables:
“We … are testing about … a couple of thousand different variations of creatives a month.”
-Lomit Patel

Identifying monetization streams quickly:
IMVU’s AI identifies whether people will monetize via advertising or via in-app purchases within 24-48 hours.

Lomit Patel on what AI has done for IMVU’s customer acquisition:
“We’ve seen our CAC come down over 3X.”
“We’ve seen our ROA, the return on investment, go up over 3X.”
“It used to be close to 5-6 months but now we … get the majority of our recoup of our ad spend within 30 to 35 days.”

And the full transcript: AI-powered customer acquisition

John Koetsier: How do you boost growth with artificial intelligence?

Welcome to Growth Masterminds with John Koetsier. This is the podcast where smart mobile marketers get even smarter. Our guest today is the author of the O’Reilly Media book “Lean AI” which just launched in March. He’s the VP of Growth for IMVU. He’s led performance and digital marketing for Roku. He’s also led customer acquisition at Texture, which Apple acquired and turned into Apple News+.

Lomit Patel, please say hello!

Lomit Patel: Hey, hello everyone. I’m so excited to be here.

John Koetsier: Wonderful. Super happy to have you here. Super exciting, you just launched the book. I have to start here, I mean this is the biggest fact in our lives right now, coronavirus, right? Where are you? Where have you been locked down? How are you keeping up?

IMVU is in coronavirus work-from-home mode, just like everyone else

Lomit Patel: So yeah, coronavirus definitely is the topic of the day every day right now. But for me, we’ve been working from home for the past couple of weeks at IMVU, so we obviously were kind of prepared a little bit to a certain extent, knowing that this was coming down the pipeline. And we’re very fortunate that we’ve been able to work pretty efficiently remotely. So it’s been working out. But as a business, coronavirus hasn’t presented too bad of a problem for IMVU primarily because we’re a social network and it’s another way for people to continue to connect with other users around the world. And for us, it’s definitely been kind of the reverse problem in terms of trying to manage the increased demand as really happened over the last couple of weeks for us.

John Koetsier: Well it’s super interesting that you mentioned that, because I mean as we were just prepping for this show just minutes ago, we were talking about bandwidth issues and my typical audio podcasting platform was not working. You are a social network where people get together with an avatar and have social interactions which we’re desperate and starved for right now. And so you’ve got those issues as well, having enough bandwidth to deliver your service, right?

Lomit Patel: Yes. So for us, you know the challenge is obviously continuing to add more infrastructure into the server capacity because what we’re finding is trying to figure out the right balance between users that are coming in from the US versus users that are coming in globally, and just trying to sort of stagger as much of that demand as possible.

John Koetsier: Wow, wow.

Lomit Patel: And then on top of that, another thing that seems to be very popular with a lot of social networks is live streaming, right? That’s a new feature that’s really taken off and we offer something similar called ‘host rooms’ where people can connect with their friends and host a live event. And so clearly features like that take on increased bandwidth, right?

John Koetsier: Absolutely.

Lomit Patel: Because people are doing that live. So yeah, I think it’s definitely a better problem to have versus the other problem that a lot of people are challenged with right now. But yeah, definitely it’s something that we’ve tried to get more proactive about and something that’s going to continue to get even more, especially as more and more different states, especially in the US and other parts of the country, start implementing more stringent shelter requirements. So it’s going to require more people being isolated, and as we know as humans there’s only so much that you can do alone.

John Koetsier: We are a social species.

Lomit Patel: Yeah we are.

VP of growth: a broad multidisciplinary role

John Koetsier: Absolutely. Maybe let’s kick this off. We’re going to talk about artificial intelligence, we’re going to talk about growth, we’re going to talk about customer acquisition, we’ll talk about user acquisition, all of those things.

But let’s set the stage here for a second, and can you introduce us a little bit to your current role, what you do?

Lomit Patel: Sure, so my name is Lomit Patel and as you mentioned, I’m the vice president of growth.

So primarily my responsibility is managing all of our growth efforts at IMVU. That encompasses everything from acquisition, retention and monetization across the entire user life cycle of … pretty much the easiest way to think about it is how do we bring users in? How do we continue to keep them around? And then how do we figure out how to make some money out of them to pay the bills?

John Koetsier: It’s super interesting that you’re the VP of growth. We released some research recently about CGOs, chief growth officers, and that’s exactly the role that you have, which is this broad role across a lot of what used to be fairly separate, right?

You know somebody brought the customers in, somebody actually built the product, delivered the product that made them hopefully happy, and somebody else worried about how to keep them. You’ve got that full suite within your purview.

Lomit Patel: Yeah. I feel part of the challenge is when you have different groups sort of focusing on different parts of the user journey, what happens is you kind of just run into issues around execution in terms of who’s responsible for which piece of the puzzle.

And one of the benefits of any company that has a head of growth is that your responsibility is to sort of overlook the entire preview of really becoming the biggest advocate for the customer. And helping to evangelize that cross-internally across the whole company to make sure everybody is supporting that function. Because it really is a cross-functional function. It’s not like we have all the resources dedicated to us, so we have to work across all the different groups.

But it’s about ensuring that we’ve always got our eye on the ball—which is about focusing on what are the key projects that are continuing to help move the needle to help the company grow at the end of the day.

Lean AI: AI for growth and customer acquisition

John Koetsier: That makes a ton of sense.

So in all of that, with all the busyness of your job and other things that go along with being a human being, you found time to write a book, and you wrote a book about AI. Talk to me a little bit about why you wrote the book? What did you need to get out there? What did you need to tell people?

Lomit Patel: Sure. So one of the things that I’ve found … we’ve been practicing a lot around AI in automation for the last couple of years at IMVU. It primarily came out of the fact that I really saw this as sort of being a big part of the trend in terms of where growth teams are going to be moving to.

Especially now we have so much velocity of data coming in at us and it’s really hard to really be able to decipher all of that data as quickly as possible to extract insights that you can take actions on, to really be able to differentiate us from our competitors.

And so what I started, what inspired me to write the book was primarily because I’ve seen it have a profound change on our business at IMVU. But I’ve also been speaking about this topic at different conferences and what I found was that there’s not a lot of companies that have really embraced this to the extent that we’ve been doing.

I would say it’s probably a small percentage of the companies, less than 5% are really doing this right now.

And so I felt like there’s definitely a good opportunity to really be able to inspire other people in the growth industry to really be able to leverage AI in automation because ultimately, you know, one thing I like about the mobile growth industry is that we’re so open about sharing and growing together. And so I feel like this is something that could really help us together continue to evangelize and move forward as an industry.

Customer acquisition 1.0, 2.0, and 3.0

John Koetsier: Very, very cool. Now one of the things you talk about is customer acquisition 1.0, you talk about customer acquisition 2.0, and now customer acquisition 3.0. Can you go through the .0’s for us?

Lomit Patel: Sure. So it really sort of goes back to exactly the journey that I had when I started at IMVU. So I started at IMVU over three and a half years ago. And coming in, one of the biggest challenges we had was that we have a lot of user data but the problem was it was living in silos. So we had user data because we’re a cross-platform business. So we had user data from my web business that lived in different servers from the mobile business, that we were trying to get into at the time, that lived in a different place.

And ultimately, it’s really hard to make good decisions when your data lives in silos.

John Koetsier: Yes it is.

Lomit Patel: So a customer acquisition 1.0 is really trying to integrate all your data sources, because unless you integrate the data sources you don’t really have a good preview or a singular view into really understanding your entire customer journey.

And once you have that, the good news is that customer acquisition 2.0 is to really take advantage of a lot of the AI capabilities that already exist with a lot of different partners that most people spend their user acquisition budget with. For example, Google and Facebook, as well as a whole slew of other partners, have continued to make some really good strides and investments into how to leverage AI to enable advertisers like IMVU to get more efficient about helping us hit our goals. But in order to really activate that, you need to provide them with really good clean data signals.

And so customer acquisition 2.0 is once you have all your data integrated then you can start providing the right data to enable them to leverage their AI capabilities to help you hit your goals.

And customer acquisition 3.0 is primarily … you know, the biggest challenge that I saw to us as a business and any other advertiser out there, is how dependent you end up becoming on your partners to tell you how to spend your budget.

And you know, I’ve been in user acquisition for over 20 years and have never ever had a partner ever say to me that we should be spending less.

But on top of that, the challenge is that ultimately I started thinking about is there a better way? And one of the areas where I really sort of got some inspiration from, was really looking at the finance industry, because the way I look at user acquisition teams is ultimately we’re kind of like day traders where we’re always trying to invest the money every day to try and help our companies get a better return on that investment.

And one of the things that the finance industry has done a great job of, and this is when they hired a whole bunch of quants and data scientists, was to build these infrastructures and these intelligent machines to enable them to be able to get better and smarter in terms of how to buy stocks and commodities. And instead of doing it based on humans, it was really based on being purely data-driven.

That kind of inspired me to customer acquisition 3.0. It was to really figure out how we could replicate that because ultimately outside of HR in terms of salaries, user acquisition or growth is really your second biggest spend or line item in the company. So there’s a lot of responsibility that goes into managing the budget and so anything you can do to get better, faster, and smarter around doing that is something that you definitely want to focus on.

And so customer acquisition 3.0 was where we’re taking that same inspiration from the finance industry to really identify now that we have all our data in one place, the biggest advantage that we have over all of these other individual partners that we give our data to is having that singular view on how the business is doing. And that’s the biggest competitive advantage.

So we know exactly how one partner compares to another partner at any given time in any given day, in any given week, in any given month.

And so having that holistic view of the different channels, and the different data, we’re in a much better position to really be able to leverage the key levers. Because the great thing is even though these partners have created a lot of capabilities around AI, they’re still very dependent on certain inputs that come from any user acquisition team which is around bids, budgets, creatives, and goals.

And so these were the things that I started thinking about automating. And the automation was really triggered based on data insights where we had all our data in one place to really tell us at any given time where we should be increasing our budgets, where we should be decreasing our budgets, where we should be shifting that. And the other way to look at it is it’s all about supply and demand at the end of the day. We’ve been very fortunate that everything where we end up spending our budgets now, it’s all programmatically done.

Because that’s what we started finding was that once we were able to identify and look at all of these different partners holistically, we were able to find, at certain times of the day, Facebook could be more efficient than Snapchat, for example, and Google could be more efficient than Apple Search.

But the problem is humanly it’s impossible to really be sitting around 24 hours a day to do this. But if you sort of leveraged the AI capabilities to think like a human and to take predictive actions based on when those opportunities come up, that was the big aha moment for us.

AI: giving marketers control back over customer acquisition

John Koetsier: What I really love about that is that marketers have had this sort of increasing sense of a lack of control as you’ve sort of shoveled money over to Facebook, shoveled money over to Google, shoveled money over to your other partners. And they’ve built their kind of black boxes with lots of AI in there and lots of intelligence in there. And as you said, the more data you feed them the better they are at giving you what you want, absolutely.

But you also lose control and you’re actually feeding the increasing growth or intelligence of that machine inside that black box. What you’ve done is you’ve put a layer of AI on top of that and now you’re saying, hey, you guys get as smart as you want to get. That’s wonderful, that’s great, that’s good for us. We’re going to be smart over all of our sources of customer acquisition and user acquisition and that’s where we’re going to beat our competition.

That’s really interesting.

Lomit Patel: Right. And I think you summarize it clearly because ultimately one of the things that I keep hearing a lot is that we have no control. But the truth is we do have certain elements that we can control and those are the key components that you want to control. Because at the end of the day all of these partners, the biggest thing they want is for you to spend more budget, right?

And you get to control that. It’s all about following the money. You get to control how you want to spend your money. You don’t have to sort of just be completely passive and just hand it off.

So the thing that happens now is every day we’re basically just acting like day traders because we’re seeing bids shifting from any given partner at any given time. And what that enables us to do ultimately is have higher confidence that we can really hit our goals at the end of the day and end of the month.

Controlling the AI that’s managing your growth

John Koetsier: So I have to ask this question. We’ve seen some catastrophes with turning everything over to the machines in the stock markets. Hopefully that’s behind us, but we’ve seen some scenarios where somebody bought, some systems just crashed because everything was going down so they sold, sold, sold, sold, and now they put in artificial brakes to that. And there’s other scenarios we’ve heard of where the machine just made a mistake and billions of dollars evaporated.

How have you put in some safeguards for that yourself?

Lomit Patel: Yeah, so one of the things that we’ve done is very similar to what they do in the finance industry where you kind of have stop-loss orders per se, where you put in certain elements where if something goes up or goes down too much it kind of puts a limit to how much it can do.

And one of the reasons why we ended up doing that, you know, unlike the finance industry, because you can kind of go up and down in wild swings. But the truth is one thing that you want to keep in mind when you do work with all these different AI capabilities of different partners is that you want to be able to make those changes within like a 10-20% swing in any given time.

If you keep making too many wild swings beyond that range you’re going to end up resetting the AI because they’re going to sort of feel the AI is sort of trained to be able to make cumulative changes. But if you do drastic changes then it’s going to sort of feel like it’s a whole new campaign. It’s going to start resetting it and then it’s counterintuitive to the whole program.

John Koetsier: Yes, yes.

Lomit Patel: So that’s what we ended up doing to help.

The technologies IMVU is using for user acquisition

John Koetsier: That makes a ton of sense. Very, very cool. That’s a great overview into what you’re doing. Maybe dive a little bit deeper, what technologies are you using specifically for your AI?

Lomit Patel: So for our AI, primarily there’s three components to it. One is mobile measurement partners and that’s where we get a lot of our mobile data coming in from. A lot of our desktop data comes from our own data warehouse so we use Tableau for extracting a lot of that data. And then all of our post-install user behavior data comes from Leanplum right now so that’s our CRM automation.

And so what we’ve done is pretty much aggregate all three of those sources into one place where we can be able to get that single view, and the way we’re able to do that for us anyway, is in two ways. One is through email address, because everybody who creates an account at IMVU has a unique email address, you can’t create that, you can’t use that email address again.

And another thing is that every user gets a unique customer ID. So those are kind of the two elements that we can use universally to track the user journey regardless of where they come from and then how they end up interacting with us.

Building and training the AI: teams and partners

John Koetsier: Right. Now in terms of teams, did you put together an AI team or did you spread that talent throughout a variety of teams?

Lomit Patel: So what we ended up doing was try and spread it around a variety of teams. But primarily one of the things that we ended up doing was to really kind of do a good and honest audit in terms of where our skill sets really lie at IMVU. And it was pretty clear that we didn’t really have a lot of the core capabilities to really build something like this ourselves.

And so what we ended up doing was to identify a potential partner or SAS platform that we could leverage to help stitch the final piece together for us.

And what we came across was a company called Nectar9. And they were like a small startup that were trying to build something similar. But what they lacked at the time was really getting a lot of user data to really be able to train the algorithms and really be able to perfect the ability of that really working for like a UA context. And so what we ended up doing was … it’s sort of trying to build this because as you know John, trying to build anything is a challenge anyway, but then the other challenge when you try to build something is maintaining it right?

And I didn’t really want to go down that rabbit hole. So I ended up doing this partnership with Nectar9 where we ended up collaborating with them, and I was able to help them through my relationships in the industry, get a lot of these API integrated into their platform from all the major partners like Google, Facebook, Snapchat where we spend and where the majority of people spend their money.

So with those APIs in place, we were able to provide access for them to get all the relevant data signals.

And so they already had the AI capability and the way their capability works is unstructured learning. So it’s primarily getting a bunch of data coming in and then trying to come up with insights based on that. And then based on that, we’re able to start training the algorithm to work for us across looking at things holistically versus looking at each individual partner individually.
And so the best way we did that was to do it step by step.

So we primarily started passing them some data at the time when we were still managing these campaigns semi-manually, with Facebook was one of the first partners we worked with and then we started giving some of the data to Nectar9 and see how the machine would potentially work against the way we were doing things.

And it took probably about 30 to 40 days, but the machine eventually was able to train and get better, and it started being much more efficient than us. And so we started with one small geography, I think it was like the UK or whatever. Then we started expanding it to sort of see if it would continue to hold and it started to hold, so eventually we automated Facebook completely through this. And then we started doing the same thing with Google and Snapchat and a bunch of other partners that we work with.

But it was sequential, it wasn’t just putting everything in there at once.

And in terms of the in-house resources primarily with my team, I kind of changed the skillset because one of the things that I found being a big challenge was really retaining people when it comes to campaign management. Because a lot of people get burnt out doing that work anyway, and there’s always somebody who can offer you $10,000 to $20,000 dollars more to move to another company for that role.

So part of my challenge and frustration was continuing to train a couple of new people coming on, and so what I found was doing it through the machine and doing it once, and then I never had to kind of go for that whole process of building that skillset in the team. And so what I did is I pivoted the skill set that we’d had in a team to really focus on how are we going to support this machine? How are we going to feed the machine, so to speak? Primarily one area where we’ve really made a big stride on and invested in-house is all around creative development.

What one of the people that I have on my team primarily focuses on, on really looking at all the data insights that come in from the machine—to look at what’s working and what’s not working across the different partners that we’re spending money with and continue to work with our in-house team, to continue to keep coming up with new creative iterations that we can continue to keep feeding into the machine.

And we generally are testing now probably about a couple of thousand different variations of creatives a month. And that’s primarily because we’ve realized that’s such a key lever now to really help us tell our story.

John Koetsier: Wow.

AI, retention, and user journeys

Lomit Patel: The other part, the other role that I really upgraded on the team was all around retention and CRM to really leverage all of the data that we’re getting now—but figure out how can we come up with better user journeys that are more personalized to users coming in from different channels to really be able to suit up.

For example, somebody coming in from Google and whatever creative motivated them to come in … we want to be able to provide some continuity on whatever motivated them to come in to keep that going. And then try to get them integrated into really experiencing all the key aha moments on a product as quickly as possible.

Part of that role is really where the AI really helps, is it enables to help us identify what’s the ideal user journey or the behaviors and actions that somebody needs to do, especially around onboarding because it’s key, as you know, in mobile. If you don’t really get people hooked pretty quickly you’re going to lose them.

What we’ve been able to do is identify two different segments because that’s how we monetize users.

One is around in-app purchases and the other one is around advertising. And generally what people do is they end up buying IMVU credits because we have our own currency that people use to redeem against buying all this virtual stuff and creating these virtual worlds. And so there’s going to be certain people that are going to be more likely to spend and buy those credits, and there’s other users who are going to be more likely to take rewarded videos, take online surveys, or interact with advertising to try and earn those credits.

So our AI’s able to identify pretty quickly within like the first 24 to 48 hours based on what people are doing or what they’re not doing to really identify where they are more likely to fall into, whether it’s the in-app purchase path or the advertising path. And based on that, then we start showing them different experiences that talk more to how we know we could end up monetizing those users downstream.

John Koetsier: Interesting. So you’re actually building your user journey, your customer journey in some sense, through your understanding of who they are when they come in.

But you’re also customizing the use of your product based on what you’re understanding, is this user likely to pay something? Are they going to watch an ad or something like that? And so the entire experience is customized to how you’re going to actually monetize that particular cohort I guess.

Cross-functional teams

Lomit Patel: Right. That’s where the part comes in where we need to work cross functionally, like with our product team. And so, these two roles that I have, one of those roles spends a lot of time with a product team focused on how to optimize the product experience to match what we’re looking for. And then the other role spends a lot more time with our marketing team to really focus on all of the creative development and the assets on how we can tell our story better to try and feed all of those back into the machine.

The other role that we have is primarily with our partner because our partners take all of that data and provide the insights. With them we have a chief data scientist that they have, so it helps us because we don’t have to hire this person, but what we do with them is we have weekly meetings at a minimum. But a part of their role is to continue to look at the algorithm and be able to tell us exactly what the algorithm is learning and what kind of outputs it’s kind of coming up with. Because one of the things we want to try to avoid is the biases that that machine’s going to end up doing.

And we want to make sure that whatever algorithms we end up developing are in line with our core value as a business, which is around diversity. So we don’t want to ever become the business that ends up just targeting a certain type of demographic, or gender, or whatever, where over-index is in one area. Because we want to try to keep our user base as diverse as possible.

John Koetsier: That’s super interesting and super smart. Because if the algorithm notices something and there are biases in our society—and there are things that sometimes even unconsciously or subconsciously we do that are resulting in instances of bias, or discrimination, or other things like that—and if your AI learns that, we’re replicating that in the digital environment in ways that are hard to see.

So that’s wonderful that you’re doing that.

I’m also excited to hear that you’re repurposing some of your user acquisition people since the machine does that now, but you’re repurposing those people for higher level jobs which is really, really good.

Key growth metrics: Customer acquisition cost, ROI, and ROAS

You mentioned as well that you’ve got some key metrics that you look at. I wanted to ask you about those key metrics and I wanted to insert a second part of that question and ask you: with what you’ve done with AI, how much better do you feel like you are? And do you have some data around that? Do you have some numbers around that? How much have you improved?

Lomit Patel: Sure. So to first answer the questions around what our key performance indicators are, primarily there’s two goals that we look at on the growth team to really help the business.

One is around cost to acquire a customer or the CAC, and the second goal is around the return on ad spend, but primarily we call it return on investment because one of the big difference being is that when it comes to return on investment we don’t just look at all the revenue debt that we’re able to generate from my ad spend. But we also try to discount, for example, some of the costs that go into supporting that revenue which for us is like 30% rev share that you have to pay Google and Apple on in-app purchases, as well as some of the creator royalty fees.

Because we have a lot of creators, just like YouTube has creators, we have a lot of creators that create a lot of these things.
So we’re kind of like a marketplace where creators are creating a lot of things and then we’re able to match users up with items that potentially would be interesting to them. And whenever somebody ends up buying IMVU credits to purchase these different items, we obviously make a rev share out of that but we have to give a certain percentage back to our wonderful creators. And so our bar is set a little bit higher in terms of discounting those costs.

And then when it comes to cost to acquire a customer, that’s pretty straightforward in terms of how much does it cost for us.
And we define a new customer as somebody who makes a new purchase within the first seven days, so we always look at seven-day cohorts when it comes to that. Just to give you some examples in terms of the results, so just going back to that whole example of the old customer acquisition 1.0 when I first started you know, from where we started with our CAC that used to be fairly high, to where we ended up being at customer acquisition 3.0 with a lot of this AI and automation.

We’ve seen our CAC come down over 3X over that timeframe and we’ve seen our ROI, the return on investment go up over 3X over that timeframe.

Speed of return on investment: a huge advantage

John Koetsier: That’s huge!

Lomit Patel: But the best part about it is ultimately when you talk to a lot of mobile advertisers, one of the other things that people look at is what’s the payback period on your ad spend. When I started, it used to be close to 5 – 6 months but now we … get the majority of our recoup of our ad spend within 30 to 35 days.

John Koetsier: That must have a huge impact on your ability to grow fast.

Lomit Patel: Exactly.

That has really helped us because primarily it helps to minimize the burn rate because whatever we’re spending, we’re able to recoup that money back pretty quickly, so that it ends up becoming like a self virtuous cycle where we’re basically recycling money back and putting it back into growth. That’s really helping us, yeah.

John Koetsier: Wow. Those are great numbers. I mean, those are amazing numbers. If you look at the customer acquisition costs that a lot of startups have, a lot of tech companies have, they’re absolutely massive, including just mobile-only companies they’re absolutely massive. Spending hundreds of thousands of dollars a day on new user acquisition, and if you can take that down by a factor of three … wow … that’s impressive stuff.

I wanted to get in as well, and I know we’re nearing the end of this time that we scheduled together, but I wanted to get in as well some of your thoughts on the future. You’ve done some really, really cool things so far. You’ve got some great metrics.

You’ve had some major improvement, but we’re always looking to the future, right?

The future of AI and growth

We’re always looking at where’s this going to go? Where are you going with AI? And what do you see over the next 6 to 18 months?

Lomit Patel: Yeah, so for me, I feel the future is really going to be about more and more growth teams or user acquisition teams, really pivoting more towards leveraging or building an AI intelligent machine that’s ultimately going to be something that’s going to sit between them and all of these different channels where they end up spending money, whether it’s around acquisition or retention, to really enable them to get better, faster and smarter about using their data, because ultimately it’s all about, you know everybody has data, but the data is of no value unless you can really extract value out of it quickly.

And then the other part to that is the secret to growth is really about just running as many experiments as you can to really figure out what works and what doesn’t work. So you can double down on what does and move away from what doesn’t. And so one of the other things that I feel a lot more companies are going to end up doing is just removing a lot of the human touch points or interactions into the whole process around managing and executing different campaigns.

And it’s going to lean more into these AI intelligent machines to really do a lot of that work for them.

And I feel like companies, for example, Singular and other MMPs out there, they’re basically becoming these warehouses of all this great data for clients. And ultimately I feel that they’re probably going to have some kind of integration put in where there could be these intelligent machines that maybe integrate into these platforms, so that it really becomes a seamless experience to really be able to do it in one place versus what we had to do because we never really had a choice when we started doing this, which was to try and piece all these different pieces together.

Because the problem with trying to put a lot of different pieces together is that there’s always the risk of something breaking in the process. The more you can have it in one place as they say, singular source of data, the easier it is right?

The Lean AI book

John Koetsier: Exactly, exactly. Well, thank you for that and thank you for this time. I want to ask you briefly, if somebody picks up your book, first of all, where can they get it? I assume it’s everywhere, but where can they get it and what is a marketer or a customer acquisition specialist or any executive going to learn from your book?

Lomit Patel: Sure. The book is available at all the major bookstores right now, so from Amazon, Barnes & Noble , Target, Walmart and a whole slew of other places, you can primarily get it on all of those websites. And my goal for writing a book, and it’s kind of written to speak to a couple of different audiences, primarily the whole idea is around it speaks to executives whether you are a founder, or a CMO, or a head of growth, to really help empower you to become a champion for AI in your business and how to do that.

And then it speaks to people that are more kind of at the director level or the manager level when it comes to growth in AI in terms of what are the skill sets that you need to learn to really get better at doing this, and provides a pragmatic roadmap ultimately for any business. Which I know especially right now with everything going on with coronavirus, a lot of companies one of the big questions that they’re going to start asking themselves is, how do we get more? How do we get better at operations? How can we get more done with less? That’s always been a question, but it’s going to be an even bigger question now.

In this book it really provides you a roadmap on how to do that, especially when it comes to one of the biggest spends where companies look to grow, which is around user acquisition. And you know my heart kind of goes out to a lot of companies right now that are kind of going through a lot of challenges with the current coronavirus crisis, but I feel that one of the upsides of any crisis is it forces companies to think differently about any problems that they’re facing.

And so coming back to my story at IMVU, I joined IMVU at a time when growth was really going in the wrong direction and the company really wanted to try something different. And that kind of helped me to really become the champion for bringing this in. And I feel other people that are in a similar role right now could actually use this as an opportunity because it will enable more people to really be open to the idea on how do you leverage AI and automation because ultimately no business is ever going to end up getting through this crisis just by cutting costs, because cutting costs isn’t a strategy for growth.

You have to figure out how you can get better, faster and smarter around using your data to really propel you to start driving acquiring customers. And so I feel the book definitely speaks to that, and you know this time is as good as any to really be able to start having those conversations.

John Koetsier: Well Lomit, that’s great. That’s great advice, I recommend it. I recommend that book and I want to thank you for spending this time with us. I really do appreciate it and thank you for spending this hour or almost an hour with us on Growth Masterminds.

Lomit Patel: Thank you, John. I’ve been a big fan of yours. I love reading your stuff and listen to your podcast, so it’s an honor to be here.

John Koetsier: Thank you so much.

Lomit Patel: Thank you.

Privacy checkup: Limit Ad Tracking up 216% on iOS, but down 85% on Android

The percentage of people who have switched Limit Ad Tracking (LAT) on has doubled on iPhone over the last four years in the United States. Over the same time period on Android, it’s shrunk by a factor of six or seven.

In other words, people on the two major mobile platforms are moving in opposite directions.

 

Limit Ad Tracking is a setting on Apple’s mobile operating system that prevents marketers from seeing and tracking customers or users by their device-specific Identifier for Advertising, or IDFA. On Android, clicking to opt out of interest-based advertising or ads personalization accomplishes the same task.

Back to the future: Limit Ad Tracking

When I last studied LAT levels, it was 2016. Interest in ad blocking had just exploded. And Limit Ad Tracking, which Apple introduced in 2012 and Google implemented in 2013, was also of interest to mobile users who were increasingly concerned with privacy.

That year in the U.S., 11.4% of iOS users had turned LAT on, limiting the data that they provided to advertisers. On Android, 25.3% of Americans had switched off ads personalization.

But in 2020, we’re seeing significant changes in opposite directions. And it’s not just in the U.S.

At Singular, we recently analyzed a 390-million-device slice of the last 90 days of global data to determine changing views on privacy and advertising. And wow … they are apparently changing.

iOS vs Android, country by country

In the UK, almost 28% of iPhone owners have Limit Ad Tracking on. But just under 3% of Android smartphone owners have chosen to turn ad personalization off. In Germany, long known for its strong stance on personal privacy, 22.5% of iOS devices in our dataset had LAT on, while only π number of users — ok, yes, it’s 3.14% — on Android have enabled the similar setting.

This is apparently a global phenomenon: up on iOS, down on Android.

In India in 2016, 7.5% of iOS users enabled LAT, while 23% of Android users limited Google’s ability to personalize ads. Today, those numbers sit at 14.4% and 1.4%, respectively. France was at 9% for iOS and 21% for Android; today it’s at 14.5% and 3%.

One outlier? Russia.

There, the number of people enabling privacy-enhancing settings on their mobile devices has decreased on both major platforms. Russia was 13% for iOS and 27% for Android in 2016. Today it’s almost the same for both: 4% and 2.8%.

The one constant in 2020? Disabling ad tracking is always higher on iOS than Android.

Four years ago, the reverse was true. The average rate of disabling ad personalization on Android in 2016 was just under 20%. On iOS, the global average was almost half, 11.5%. Now, every major country we looked at has reversed that split. Overall, iOS is 15.61% globally, and Android is at 2.2% globally.

So … what’s going on?

The iOS numbers are actually not surprising or shocking.

People are increasingly concerned about privacy and worried about the risks of releasing personal information. As a result, it’s no surprise that the California Consumer Privacy Act of 2018 went into effect this year, after a continued public outcry.

In addition, Apple has been beating the privacy drum as a competitive advantage for some time. The company moved to block third-party cookies on the Safari browser just this week. It’s no accident that Singular has been preparing for a post-IDFA world for quite some time, and it’s no accident that iPhone owners are more attuned to a privacy-centric vision.

But the Android numbers are definitely a surprise. To drop from higher than iOS to lower than iOS and reverse a cultural shift is puzzling.

Perhaps Google is doing a better job of helping Android users understand their privacy options, and how the company’s advertising ID can be used to deliver more relevant ads, or a better overall experience on Android. Perhaps the vast growth of Android bringing in close to a billion new smartphone owners on a global scale over the past four years has tended to focus on people who are less concerned about privacy. And perhaps the bigger ecosystem of phones and models and manufacturers in the Android world lends itself to new devices that don’t necessarily incorporate all the settings that prior models had enabled.

Ultimately, this needs more research before we can be sure about what’s happening here.

A few caveats and details

I’ve checked with a few other industry analysts like Thomas Petit and Eric Seufert. The iOS numbers we’re seeing here are basically in line with data that Petit and others are finding as well: a general global increase over the past few years.

For Android, I’m not seeing good data from other sources to corroborate or conflict with the findings from this almost 400-device dataset. (If you have such data, let me know!)

One potential concern with the data could be that advertisers and/or networks are excluding devices with ad personalization turned off from their campaigns, knowing that they’ll present tracking limitations. That would, of course, result in under-reported data and incorrect findings. So we double-checked attributed conversions in Singular data to surface any differences between paid and organic traffic.

In other words: we re-checked to see if the data changes when we collect it via an ad campaign versus a natural, organic conversion.

Very interestingly, ad personalization off for Android was actually LESS for organic and MORE for paid traffic. The same was true for turning the Limit Ad Tracking on in iOS: less for organic, more for paid.

Ultimately, we’ll need to do more research to understand what’s happening here, but for now, the upshot is this:

Americans are now among the world’s most privacy-sensitive consumers, at least on iOS. And Android users are now less likely to turn off ads personalization than any time I’ve ever seen in the past.

COVID-19 and digital marketing spend: what’s changing?

COVID-19 is changing everything. San Francisco has been told to shelter in place. New York City might be next.

As local, state, and national governments all over the world encourage people to stay in their homes, we’re quickly starting to see real-life economic consequences of the coronavirus. This is the new normal of social distancing and leveling the curve. And it has huge impacts on people’s lives as well as the economy.

And that means it also has massive ramifications for the online economy.

Mobile is now the dominant way for people to communicate, to research, to shop, and to order. In short, mobile is how we actualize all our intents and purposes in a modern digital economy.

Singular is the leading marketing analytics platform automatically tying marketers’ ad spend, sales results, and ROI together across multiple channels and platforms. That means we have significant insight into how brands are changing their customer acquisition behavior in response to the COVID-19 pandemic.

Here’s just a taste of what we’re seeing so far in 2020.

Gaming: a 25% jump with COVID-19

Gaming is a growth industry when the world hits pause on work and social interactions. We’re seeing a steady increase since the middle of February, with a 25% jump in the second week of March from the low point.

cover-19-gaming spend

We’ve seen this story in China as well. As Singular’s top executive in China said recently, gaming companies “are reaching their revenue peak … because everybody is just playing games.”

It’s not just a rebound from the Christmas season, either. We’ve seen previously that gaming industry marketing spend is fairly steady throughout the year, generally, and this new peak is higher than any week in the final three months of 2019.

Retail – one massive spike, but also a 34% jump in March

Thank you, Super Bowl. Retail spending has been fairly steady throughout the year so far, with two exceptions: Super Bowl week, and a bump at the beginning of March.

covid-19-retail-ad-spend

It’s tempting to think that the spike may also have been an early reaction to some initial rumblings of cruise ship illnesses and potential challenges with in-store shopping experiences. After all, marketers tend to kick off ad spend before an actual event. And, with global customers throughout Asia and Europe, it’s conceivable Singular data is showing some early market share grab as well as Super Bowl hype.

Ultimately, however, the Super Bowl is the Super Bowl: an extravaganza of spending. (Not coincidentally, the data shows a big spike in agency spend in the same time period, another indicator of Super Bowl advertising.)

What we’re seeing at the beginning of March, however, is a bump in people ordering online.

We’re shopping less in stores to maintain social distance. We want to order our groceries and products online and via mobile, and have them delivered to our homes. In fact, this trend is growing so fast, we’re starting to see the big online retailers have challenges in providing delivery windows to everyone in larger cities, especially with 1-day or less shipping.

Social media: 29% increase

When the only way you can be social is via digital media, app installs for social platforms go up. After a moderate post-Christmas decrease, we’ve seen a steady rise in social media marketing activity for the last four weeks straight.

covid-19-social-media-ad-spend

The last time marketing spend for social media was this high was just before Thanksgiving in November 2019. Expect this category to continue growing … especially apps and platforms that enable live, real-time video interaction.

Why? Introverts might like the shutdown, but extroverts need their social time.

Travel marketing: down 38% so far

It’s not surprising that the travel industry is hurting. The US and Canada closed the largest undefended land border in the world on March 18 to all but essential services and transport. Most countries have followed suit, or had already set up travel bans.

Even Europe’s famously borderless nations are reinstituting border checks and closures.

covid-19-travel-ad-spend

As a result, air travel is expected to be down in 2020 for the first time in 11 years. Hotels are suffering. Airbnb is allowing guests to cancel reservations without penalty.

And with the COVID-19 lockdowns in major cities like San Francisco and Paris, even local transport utilities like BART and Eurostar are hardly being used.

Other categories: on-demand, news, marketplaces, and more

Other categories are reacting in sometimes-unexpected ways.

On-demand services, which you’d expect to be way up as people stay home and order in, are just up slightly, with a drop in the second week of March. Part of it is car-sharing services, which people aren’t using as much, since they’re spending their time indoors or, when traveling, are walking or cycling. And part of it is likely heavy organic marketing increases: if you’re stuck at home, you don’t need an ad for Instacart to go get the app and order groceries.

You just go to Google Play or the App Store and get it.

News, on the other hand, is way up.

In fact, spending by news and information companies jumped over 11X from early January to the second week of March. People don’t just want to know what’s going on with COVID-19 or Coronavirus … they need to know. And news organizations are capitalizing on that opportunity.

The Marketplaces category is a bit of a mixed bag. There’s some growth there, but it’s spiky and includes some drop-offs. The problem is that if you’re selling real goods to other people, there needs to be an actual physical hand-over at some point. Getting to a shipping office is harder, and meeting in person is also harder.

The same is true of the health and fitness category, and financial services.

While we need workout equipment at home when the gyms are closed, gyms and other facilities are a big part of the marketing for the category. So while we saw the expected huge spike in spending for the first week of January to catch the New Year’s resolution crowd—almost a 2X increase—marketing and advertising in the category has fallen off over the past few weeks.

As far as finance is concerned, investments have tanked, but there’s no clear option but to hold and wait for the post-virus uptick. Similarly, fintech marketing is fairly stable, but down for the past month and a half.

Marketers need to make decisions fast

Now more than ever, marketers need to make decisions fast and get quick insights into complete ad spend and ROI. This means all your data needs to be centralized, easily accessible and actionable.

Singular provides advanced marketing analytics, and makes it easy. There’s no code required, and you can set up in minutes.

Try us free for 30 days now!

Change is the new normal: looking to the future

It’s important to note that the coronavirus pandemic is about much more than the digital marketing industry. It’s about real lives being lost, physical suffering, and massive daily disruption in literally billions of peoples’ lives. As such, COVID-19 is an unprecedented global event. My 84-year-old mother actually compares it to the times she lived through during World War II.

At Singular, our hearts go out to all those impacted. We’re working from our homes right now to minimize the spread and flatten the curve.

And in and through it all, we’re also keeping the lights on so that our clients, and the part of the economy that we touch, can continue to do what needs to be done. Or, at least as much as possible.

Ultimately this time of great challenge will likely lead to significant change in how we work, how we socialize, how we entertain, how we shop, and how we live in general. Setting up our clients for success now and in this still-uncertain future is a top priority.

The very first priority, however, is doing what we can to help all of us get through this pandemic safely.