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Ep 468: How DTC Brands Are Scaling with Applovin: A Guide to Mobile Ads Success | AKNF
00:27:24
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- [00:00]
Eric Dick
Hey guys, before we get started with today's all killer no filler episode where we're actually diving into Applovin, which is a topic that I know a lot of people are psyched about, I wanted to take a second to invite you to join me and my co founder Jeff from D2C and Pilothouse at Ecom North's the Founders Reset, January 23rd to 25th, 2025 in Vancouver, British Columbia at this amazing lodge at Whistler with I think there's going to be 30 to 50 other sort of D2C founders there. There's great speakers who are going to be there, but there's really no speaking this event. It's more of just a. A chill out. There's going to be cold plunges and saunas. There's going to be two days of skiing at Whistler, which is one of the best mountains in the world. And just in my backyard here in Victoria B.C. they only have eight spots left, so this isn't going to be for everyone. But there's going to be a link in the show notes if you want to join us at the Founders Reset with our friends at Stallion Express and and Ecom North. So anyways, hope to see a couple of you guys there. Otherwise I really hope you enjoy this podcast on Applovin and on with the show.
- [01:02]
Taylor
Applovin is essentially a different channel. Think of it like Meta ads or TikTok ads.
- [01:08]
Aves
As Taylor and I have been working with Applovin, it like has continuously boggled my mind. You've got 30 seconds of someone's time and our average watch times on Meta these days are like sub three seconds. So you think about what you can do as an advertiser. It's so different and exciting.
- [01:24]
Taylor
Really good cost per visit, high CTR on the platform.
- [01:29]
Eric Dick
What were the key performance indicators that you were like green lighting, eating into Meta's budget essentially.
- [01:34]
Taylor
I've never seen anything like this. When it comes to another channel, Meta.
- [01:38]
Aves
Has just started really pushing this short form video content that's like sub 10 seconds. It's just a single product shot. It cannot be that anymore. It has to be like.
- [01:54]
Eric Dick
It'S all killer, no filler. This is the DTC podcast. I'm Eric and I'm here with Aves and Taylor from Pilothouse's amazing marketing team to discuss a topic that's kind of come onto the E Commerce D2C space like a hurricane. And that is App Lovin. This mobile ad network that I'm seeing dtc Twitter kind of blow up on There's a lot of people out there spending a lot of money on it and seeing a lot of early returns, I should say. So let's back it up a little bit. Maybe Taylor, kick us off. What is Applovin?
- [02:27]
Taylor
Yeah, so Applovin is essentially a different channel. Think of it like meta ads or TikTok ads. It's a way to basically place 9x16 video ads in basically popular app ad placements. So you think about someone who's playing an app like Candy Crush, they get an ad pop while they're playing. This is how you serve that ad essentially. And the recent development with Applovin, basically their audience plus platform, which enables you to tap into what I just mentioned there. So that's the new shiny, kind of exciting feature and channel that brands are looking to, to leverage and have started to leverage at scale.
- [03:11]
Eric Dick
It's super interesting. I ran a mobile ad network in like 2013 called Tap for Tap, world's first tap exchange. But it was, it was not, it was not that, you know, sexy of an ad platform. It was mobile display advertising. There was a lot of, you know, a lot of people just hammering ads on that. A lot of people, A lot of people ignoring. And I hadn't really seen it work for E commerce in all those times. You're always promoting other apps or other things. But for. To see it actually start working in E commerce is interesting. So this and I. So they've managed to kind of put lipstick on a pig, which is not a nice expression. But it's like they found a way that with this algorithm to get signal from the noise basically of a chaotic mobile ad network and drive sales.
- [03:50]
Taylor
Exactly. Yeah. I know for me, coming from the app side as well, having experience working DSP side and being extremely familiar as both a media buyer and an account manager on that side, I didn't have it in my bingo card that this would be a major growth area for this year. I've been saying that a lot. But it's, it's exciting, it's cool. There's a lot of, a lot of cool stuff happening.
- [04:09]
Aves
Yeah, it's really interesting from a like brand perspective because it's kind of like my world, brand creative. And I feel like the past few years have been like, I don't know, there's always just a negative connotation around like mobile game advertising or doing it in any kind of platform like that because it just feels like an impossible feat to be able to. So the DTC is like obviously if you're already playing an App. I have my iPad. I love my iPad. Sometimes I'll get an ad for like another game. Obviously if we're talking to tap, to tap, that makes sense, but like thinking about an actual product and making that decision to come away from something that you're doing that is designed to just monopolize your time and buy something. Like as Taylor and I have been working with Applovin, it like has continuously boggled my mind because again, as someone who's like deep in the mobile game, like I get my little iPad baby time, I cannot believe how well it's working. But it's really interesting to we can talk about later from like a, you know, you've got 30 seconds of someone's time and our average watch times on Meta these days are like sub 3 seconds. So you think about what you can do as an advertiser. It's so different and exciting.
- [05:20]
Eric Dick
It's super interesting. I, you know, coming from this mobile advertising space, the thing where my mind goes is how do we prove the incrementality? Because you can get a lot of pixels on a lot of devices who have a lot of mobile apps on their devices. And so how do you know that you're really driving incremental new users? I see people talking about this on dtc, Twitter. It's happening. People are finding brand new users that they weren't getting through Meta. But Taylor, walk us through a little bit. First of all, who can advertise on Applovin right now? What's the big caveat about who can advertise on Applovin?
- [05:49]
Taylor
Yeah, so the big caveat is that you need to be like, currently you need to be spending a minimum of 20 grand a day on Facebook to qualify into becoming an advertiser using this tool. So that's the big caveat. But yeah, with that said, it'll be interesting to see where it goes and what they're planning into next year and beyond.
- [06:09]
Eric Dick
Okay, so we've got this large stipulation about who can advertise there. Now walk us through a little bit about our experience running ads on Applovin.
- [06:18]
Taylor
Yeah, it's been really interesting. So went into it, planned for it to be a test, much like what you see on Twitter. Like a lot of brands are out there giving it a go. Was pleasantly surprised to see it jump up to a significant portion of scale in November where we were testing it. We're talking 25% plus of budget, which is a pretty significant zone to work in when you think about how quickly that can unfold we went from test to scale in a matter of weeks, which is pretty insane. As far as some of the data points that are really interesting as well, really good cost per visit, high CTR CTR on the platform. So you know we've seen anywhere from like 3 to 5% CTR coming through on that, which is extremely high when you compare to Meta. It is really interesting though, I know there's a lot of discussion on Twitter about how incremental it is and we've taken some steps to look at how we compare it to the doctor work we do on other channels and what the ultimate impact is using a combination of stuff like post purchase survey, UTM based data, MTA tools, all of those fun things. And from everything that I've seen, I mean we've seen incremental lift from it. It is really interesting though that we've noticed shifts over time too. To be completely transparent, there's been an amazing incline window and then there's also been periods where we notice our new visitor percentage dipping and it requires some different shifts to our strategy with it. So I'm still a bit surprised, I'd say just at how fast it came up compared to some of the other channels that I'm sure a lot of people listening to the PODC have tested, whether it be other paid social channels like TikTok and other things that may or may not take off like that or typically can be slower to get working that way. So really interesting so far it is.
- [08:11]
Eric Dick
And so what dictated what were the key performance indicators that you were greenlighting eating into Meta's budget? Essentially it was basically was it on the on platform roas or what were we looking at?
- [08:21]
Taylor
No. So that's a big thing. So what I've been looking at really closely is I've been putting Meta and Applovin head to head when it comes to some different signals. So post purchase survey and on in two different pivots. So looking at how basically what where someone heard about it. So looking at like what percentage of new is coming from Applovin on top of when they heard about it. So are those more recent heard about responses coming from this channel or that channel? So that's one pivot point. Another one I used interestingly a lot of Shopify UTMs so that's kind of another interesting point. You can break down customer type by doing that too and also look at the products that are selling through and all that fun stuff and then MTA as well where I track new visit percentage as well as a more top of funnel oriented approach to what is fueling all of our bottom of funnel touch points as well. And ultimately, before making any decision, I'm looking at a set of those points across multiple things, making sure that the, the trends are aligning to what I would expect. And honestly that was one of the more surprising things for me as well is that a lot of the times those trends were adding up for us and it was, it was really interesting to see and I had to second double take it sometimes and just be like, okay, yeah, like we can keep, keep going. So it's been, it's been interesting, it's been fun and I feel pretty confident that the lift that we've seen in, especially in those incline periods has been incremental where, where we've explored it.
- [09:52]
Eric Dick
Amazing. But so your bull, your bull not bear cautiously bull. Because what you said, you said that the volumes dropped, right like that, that that initial wave that you know, hasn't been fully sustainable. That's the thing about Meta. You can pump this, these amount of dollars into it like over and over for a really long time.
- [10:09]
Taylor
I think I'm balanced, I would say. I think, I think there's, I've never seen anything like this when it comes to another channel. I think there's a lot, from what I've heard and from what I've read and seen, it sounds like a lot of it has to do with the probabilistic modeling intelligence that they're developing and all that kind of stuff and just the overall experience and the content. I think where like what I would say is there is that risk that is being thrown around on DTC Twitter because you can't control your exclusions based on the way that tracking is done on the channel. So that makes it tricky because it's a constant creative play and strategic play really when it comes down to it, we've seen the decline in some of those components there that maybe take me away from being full bull and then more into the bearish category. But we've also seen from pivoting our creative strategy a little bit and continuing to maintain creative refresh and stuff like that, that we've also been able to pivot it back in the right direction. So it'll be interesting to see where it goes. But I think from a start perspective, really interesting, really exciting. With that said, there are still caveats that you want to make sure you're paying close attention to as you work with it, as you would with any.
- [11:23]
Eric Dick
Any channel aves you mentioned, you know, it's it's not a magic bullet, obviously. It's. It's as, as you see, you know, the decline and being improved by new creative, you realize it's just, it's going to be the same grind where you've got a, you've got all these users all the time, so you have to kind of give them different looks, different angles, different hooks. How are you thinking about the creative that's, that's catching fire here. And is it the same as on other platforms or is it all custom?
- [11:48]
Aves
No, it's not all custom. The thing about Apple been creative again, I think I mentioned this in the prerecording, but you've got way more time than you do on any other platform right now. So like our average watch through times on meta are like sub3.5 seconds but we've got people on Applovin for so much longer. We've got this watch time.
- [12:09]
Eric Dick
Forced watch time. Exactly.
- [12:11]
Aves
Yeah. So it's. I went into it thinking about creative similarly to like YouTube because that was the only thing that my brain could kind of jump to where we're kind of giving people the set amount of time. But then I've kind of since then found a more happy medium between meta and YouTube because you kind of understand like I do have these people for more time than any other platform. This is a very unique experience as an advertiser to know that people are willing to wait that long to get their special gems. That's what I'm doing to keep running my cat cafe. So you're trying to get these rewards or something like that. You're doing it for a purpose. So you're going to watch that full ad. So it's about like more than any other platform, I would say entertaining people for that time that you have them and stopping them from putting the phone down and making a coffee or putting the phone down and like I'll just run to the washroom and let this play out while I get my special gems. It's like how do I make something that is like really funny and captivating? I feel like we talk about humor a lot on the podcast in ads, but what we've mostly seen is very to the camera creator generated content. Like we haven't tested any crazy like production level videos, like very organic stuff. And what really matters is the personality and likability of the person who's in front of the camera. That's what we found so far. Like if we can find someone who. And it's a little bit different for meta, not like fully just matches with the Persona, but someone who just has that like special it factor. Which is a really unfortunate piece of advice to give people if they're looking to advertise.
- [13:53]
Eric Dick
Yeah, you'll know when you see it.
- [13:55]
Aves
Yeah, you need to find someone with some like razzle dazzle and excitement. I don't think we've seen a ton of success with like highly curated creator content. So like really beautiful spaces in their home where you just tell that person is making content for a living. We're seeing more like regular looking people which makes a lot of sense when you look at like who the audience will be. And then another really interesting founder stories.
- [14:20]
Eric Dick
Could be good there.
- [14:21]
Aves
Yeah, I think so. I think just again like instead of prioritizing an angle, it's prioritizing first. And this is also, I think Apple event outlines this themselves. First prioritizing a five minute hook again to make sure that people are staying on the phone and then prioritizing like a continuous stream of entertainment. So if your founder is entertaining, go for it. Is there kind of like a blanched potato? Probably not. But giving them that insight into the actual product can be good because again you have them for a long time. So it depends on the product. But anything that's also featuring like the actual features of the product has done quite well. Or just like the kind of headline elevator pitch. This is why people typically buy this thing and like really hammering that home. We've seen that work too. But something that's I found really interesting and we'll definitely keep exploring it is like an end card on Applovin. So typically when we're making ads like we just want to make the first like five seconds really interesting or if it's a static, we want to give that person a reason to click through right away. But now this idea of like an end card that comes in at the end of our 32nd ad that someone has had to watch, like what is the information that should be on there? And because it's the success is so new, I don't think there are a lot of people really experimenting with this. But going into the year, now that we're not so sales focused, it's like is giving someone like a mini landing page experience there going to be what drives better performance? Is it just giving them like an image that we see do really well on Meta with a really simple CTA to get them to like click through right away and then get them to a landing page. So there's tons of like testing that. I feel like both Taylor and I are excited to really explore and sink our teeth into. That can help. Kind of like temper performance. It reminds me of like early TikTok days when it was like you're just going nuts trying to make enough content to feed this machine. It's kind of been the same thing but worse because the content has to be longer, really engaging. There's definitely like a, a wrench in my health.
- [16:26]
Eric Dick
It's intimidating that it's actually going to be watched. It's. You know what I mean? It's before you know it's going to get skipped 90% of the time in this case it's like they're going to watch it. They got to, you know, can't just be aves on there talking about her doorbell.
- [16:42]
Aves
Thermostat.
- [16:44]
Eric Dick
Those are the early days when I would see those.
- [16:47]
Aves
But yeah, it can't be that like, like style that works so well on Meta or TikTok or even like Pinterest and Snap where it's like a short form video. Like we've talked about that so much. How Meta has just started really pushing this short form video content that's like sub 10 seconds. It's just a single product shot. It cannot be that anymore. It has to be like long storytelling. Back to the days of really making.
- [17:12]
Eric Dick
Ads, which is cool, super interesting. And just back to the caveat because it's the one caveat that I saw from Cody Plofker who's someone I really respect in the space from Jones or Beauty and he was sort of. He's. He's a bear. He's a, he's an app lovin Bear. Because he says it's not good for brands that have a strong loyal repeat purchase rate that it might be sharing that audience because it's going to take credit for people that are buying your product anyway because it's one of those. Everyone who sees that ad gets pics, gets, you know, pixelated and everyone, you know that makes, that makes that purchase there is that opportunity to kind of overlap efforts with it and like. And they don't currently offer the exclusions that you mentioned, Taylor, in order to like, you know, not advertise to certain people. What is the experience like? Like is it a platform where you literally give over almost total control? Like what are the, what are the targeting options like on Applovin?
- [18:03]
Taylor
Yeah, it's at this point it's pretty basic. It's like choose your bid type, upload your creative and your end card and that's mostly it. So that's the challenge from I Think when it comes down to it that is 100% a legitimate concern for brands that either are so established that at this point they have all those variable sources that the purchase could be coming from. There's an element of it just being a very small fraction of your budget and it is optimized for conversions so that rather than like say setting it towards new visitors or anything like that, which means it's tricky because it'll, it'll likely go for that low hanging fruit that you're going to see happen anyways. So there's a lot of thought I think that has to go into it behind the levers of budget and creative as the two biggest ones. So immediately off the top of my head, I mean like one thing that we're working to do and we're in the midst of testing it, monitoring it is taking our, our best truly high confidence top of funnel type content that those style of messages or angles or whatever's behind that that we're seeing on Meta where we have that control and then bringing it over and monitoring from there to see how it affects things. But it'll be interesting to see how the Applovin team and if they look at overcoming some of those limitations that could be challenging for a lot of brands with a heavy repeat customer base or any sort of concerns or when it comes to it just sniping low hanging fruit, that is going to happen anyways.
- [19:36]
Eric Dick
Yeah, super interesting. We'll have to watch this space. It's a real blast from the past. I'm really interested to know what their algorithm is doing. If it is. If it's like if they've just learned a ton from Meta and Google's algorithms, they've hired the right people and they've really figured out when to show because it's like how come people haven't been doing this for years? Or is it really. Do you think it's the algorithm or do you think it's just an idea whose time has come?
- [20:00]
Aves
I think it's probably like a combination of both. I will let Taylor Sweet to the algorithm piece but I think like we're just culturally in a much different place these days than maybe like we previously were when we were trying to do this. And I think like yeah, again like my assumptions were proven wrong. It was like this is something for I don't know like KitKat. You're just running awareness for your little candy bar that you're hoping people pick up in stores or it's an actual mobile game to mobile game situation. I Never imagined again making a purchase based on something that you see when you're intentionally zoning your brain out. I think there's probably a lot that we can say, too, about the types of people who are maybe on these apps now compared to previously. There's a lot of need to check out. It's no longer your grandmother playing Candy Crush. It's like people who are in their very early 20s who are, like, logging into their cat cafe game just to relax. So I think the demographics of people have probably shifted a little bit to allow actual DTC brands to come in and make a difference. Just because, like I said, culturally, I think iPads kind of came back in a really weird way for the past few years. Not that they ever went away, but they definitely became a lifeline for a.
- [21:23]
Eric Dick
Generation of kids as well.
- [21:25]
Aves
Exactly. Just during the pandemic. Pandemic, specifically, people started like, yeah, that's exactly what would happen. Like, people started really going back to iPads and mobile games throughout the pandemic, and it hasn't shifted since then. So I think it's like, right time, right place for Apple.
- [21:40]
Eric Dick
Almost everyone I know has the game that they would rather not People know about, that they play that that is on their device that they just like. Mine happens to be NHL 2024 on Xbox, but. But I don't have a mobile one currently.
- [21:52]
Taylor
Oh, that's not too bad. I'll go ahead and say mine is still Pokemon Go in case anyone wants to judge me for that.
- [21:58]
Eric Dick
Oh, you're still working for them. You're still working for them. That's good to know.
- [22:03]
Aves
I've got, like, this is. I feel like when Taylor and I were talking about this originally, I was, like, really, like, banging them off. I've got the cat cafe. I've got cats who run, like, a snack stand. Candy Crush. Multiple different, like, animals farming games. Love that. So, yeah, really interesting, especially because you think about, like, kids who were given iPads from birth have now grown up. Not a lot, but some purchasing power. Like, you show me a slime ad on my iPad, immediately make a purchase.
- [22:38]
Eric Dick
I just bought $200 in Do it yourself slime kits for my daughter and my nieces. So I'm in that slime funnel. Super interesting. Yeah, we'll have to continue to watch this space. When you hear the name Applovin, where does your mind go? I always think of McLovin. I just always think of Micklovin. I'm always just like, I always. And I think, like, McLovin was like, really? He was Bold. He had good vibes. I was App Lovin's, you know, McLovin. Kind of the same thing, you know.
- [23:01]
Taylor
Yeah. And McLovin's one of my all time favorite movie characters, so I love it.
- [23:05]
Aves
I feel like now I have like a. Because we really kicked off during Black Friday and the content was so different than what but I was making for like other suite of channels that we run. It gives me like a bit of a trauma response now. It was just a lot of Taylor knows this me in Capcut, like what am I going to do? We have all this spend like going through all this creator content, briefing on new creator content and just being like how this is so different than like across pilot house people were seeing a picture of the product with a post it note work really well in their accounts and I was like I am Steven Spielberg over here in cap. Trying to cut this in a way is enticing for 30 seconds which feels like Gladiator 2 length, like it's so long feels like film. So it kind of genuinely gives me like yeah, quick lurch.
- [24:00]
Taylor
I was gonna say one thing to add to Abe's I just for the. The audience out there too. Eric, when you asked that question about what do we think it is behind it? I had the same immediate response. It's like a combination of both right time but also the algo and when I compare it to Meta and what we're doing on Meta and what we're seeing work on Meta Advantage plus shopping obviously has become a big thing in a lot of ways. Applovin has a lot of comparability to that I would say from what we've seen from a performance signal kind of perspective and Pinterest has that now too, so it's always really interesting. But anyways, we still run a combination of both. I'm still running your old school cbo, ABO as well as asc and I think what I'm hoping I know these platforms. Often I can tell they listen to DC Twitter, they have conversations with the pod. Hopefully they listen to the pod.
- [24:53]
Eric Dick
Oh yeah.
- [24:54]
Taylor
But knowing with what's potentially coming up there, it's exciting for me to see another major player coming in and offering something like this. Applovin, if you're listening, I would love a more audience controlled product to be dropped next. That would be really fun to test.
- [25:13]
Eric Dick
It's interesting because all the platforms we came up with have all the levers and they're trying to take the levers away from you and give them to AI with all of Their great rollouts that they're doing Applovin learn from this and it's just like, no, you just get the AI, you know, you put in your results and I'm sure they'll be loathe to give over control, but I wonder if they'll listen to these critiques on this podcast and on D2C Twitter. Very interesting.
- [25:37]
Aves
Yeah, it's also, I mean, not too feel too much to Apple in, but it's also been great like working with them and really interesting. I found like, I find usually, I mean, everyone knows they're like really great reps, really bad reps, but it's been really like almost exciting to be part of this test and like see them also experiencing this success has just been like a different vibe again. There are good reps or bad reps. Sometimes you can tell they're kind of lifeless back there. But it's really interesting to like be working with a group of people who are like doing something really cool in the space and really bringing the energy.
- [26:16]
Eric Dick
It's the most positive thing ever said about ad reps. I know we love our ad reps, but on this podcast for sure. But I bet maybe they're surprised by it or that, you know, this like it is that they're driving all these purchases from mobile apps. Wow. You learn something new every day. That's why I love doing this podcast, guys. So we're gonna do, I think in the new year this is gonna go out like, right. So thanks for listening to this. This is like right between Christmas and New Year's, I think, when this is coming out. But in the new year, we'll be doing something about Black Friday, taking away your top insights from this year's interesting Black Friday Cyber Monday. So we'll look forward to that. Thanks for coming on the All Killer no Filler show today, guys. This is great.
- [26:51]
Taylor
Thanks for having us.
- [26:51]
Aves
Thanks for having us.
- [26:58]
Eric Dick
Thanks for listening to today's episode. If you're not getting the DTC newsletter, you can subscribe for free at directtoconsumer Co. And if you want to learn more about Pilothouse's All Killer no Filler services, take off to Pilothouse Co. I'm Eric Dick and this has been the DTC podcast. We'll see you next time.