Podcast Summary: Marketing Operators E038: Is AppLovin Living Up To The Hype & How We're Scaling Creative Partnerships

Release Date: December 17, 2024
Hosts: Connor Rolain, Connor MacDonald, Cody Plofker, Sean Ridge

1. Episode Kickoff and Celebrations

The episode begins with a personal touch as the hosts celebrate Cody Plofker's 31st birthday. Cody shares anecdotes about organizing a belated birthday dinner with Sean Ridge, CEO of Ridge, highlighting the seamless integration of personal milestones with professional achievements.

Cody [00:02]: "I turned 31 on Friday. I had dinner with Sean Ridge, CEO. So not too much different."

2. Introduction to AppLovin as an Ad Channel

The primary focus of the episode is a deep dive into AppLovin, a burgeoning ad network gaining significant traction in the e-commerce space. The hosts discuss AppLovin's origins, evolution, and its current position in the advertising ecosystem.

a. Understanding AppLovin

AppLovin initially started by developing mobile games for iOS and Android platforms. Leveraging insights from these games, the company pivoted to create an ad network, aiming to capture the burgeoning market of mobile app advertising.

Sean [09:00]: "AppLovin is a company that originally started in developing games... they realized there's a big opportunity to develop an ad network on top of it."

b. Holdout Test Insights

Cody shares the results of a two-week holdout test conducted from November 11th to 22nd, where Ridge increased their ad spend on AppLovin. The test aimed to evaluate AppLovin's effectiveness compared to Meta and other top channels.

Cody [27:01]: "It was incremental on both a 3% lift on new customers and a 4 or 5% lift on total, with a $146 cost per incremental order."

However, despite the overall profitability, Cody expresses concerns about the high cost of acquiring new customers through AppLovin, deeming it inefficient compared to other channels.

Cody [30:38]: "We're losing money on new customers. It's incremental, but it's incremental where it's like $150 cost per incremental."

c. New vs. Repeat Customer Acquisition

The discussion delves into whether AppLovin primarily drives new customer acquisitions or re-engages existing customers. Connor and Cody highlight that while AppLovin provides incremental orders, a significant portion stems from returning customers, which may not align with Ridge's primary goals of acquiring new customers.

Sean [26:59]: "New customer percentage is at 81%... lower than Facebook but still pretty high."

d. Measurement and Attribution Challenges

Measuring the true effectiveness of AppLovin poses challenges. The hosts discuss using tools like North Beam and Prescient AI to better attribute conversions and understand the incremental impact of AppLovin.

Sean [26:59]: "We're using Prescient AI to measure these very difficult to measure upward funnel channels."

e. Host Opinions on AppLovin’s Potential

The hosts share varying perspectives on AppLovin's future. Sean views it as a promising secondary channel but remains cautious about its scalability. Connor remains optimistic but acknowledges the need for further validation.

Sean [11:45]: "I think AppLovin is a 6 out of 10 for the majority of brands... it’s going to be a good channel for about 10% of spend."

Connor [43:25]: "I'm a 6 out of 10; I think for the majority of brands, it’s going to be a good channel."

3. Scaling Creative Partnerships

The conversation shifts to scaling creative efforts to optimize ad performance across multiple channels, emphasizing the importance of diverse and high-quality creative assets.

a. Leveraging Motion for Creative Scaling

Motion, one of the podcast sponsors, is highlighted for its role in enabling Ridge to scale their creative output effectively. By testing a larger volume of creatives, Ridge maintains a consistent Return on Ad Spend (ROAS) even as they increase their ad budgets.

Sean [03:10]: "Motion allowed us to understand out of that enhanced creative output what was actually working the best."

b. TV Advertising Strategies

Cody and Sean discuss their strategies for integrating linear TV advertising into their marketing mix. Cody shares Ridge's initiatives, including partnerships with creators like Marques Brownlee (MKBHD) and expanding into new demographic segments through tailored TV campaigns.

Cody [51:18]: "We signed the Marquez deal earlier this year to appeal to a new demo and are taking that onto TV."

Sean echoes the importance of creative diversity in TV advertising, drawing parallels to their successful campaigns featuring Gordon Ramsay.

Sean [62:23]: "We have differentiated creative that nailing the value prop and Gordon's social proof, allowing us to scale effectively."

4. Tools and Sponsorship Highlights

The episode underscores the value of specific tools and sponsors that aid in optimizing marketing operations.

a. Motion

Motion is praised for its ability to help brands scale their creative testing, ensuring that Ridge can maximize the effectiveness of their increased ad spend.

Cody [03:10]: "Motion allowed us to understand out of that enhanced creative output what was actually working the best."

b. Prescient AI

Prescient AI is introduced as a crucial tool for cross-channel measurement, allowing Ridge to forecast the incrementality of various ad channels and integrate these insights into their budgeting process.

Cody [25:50]: "Prescient has become a really important part of our marketing workflow. We can't live without it."

c. Rich Panel

Rich Panel is discussed as an innovative solution for managing ad comments through AI, significantly reducing the manual effort required for moderation.

Cody [49:57]: "Rich Panel's AI social media manager handled 11,000 comments, saving us 760 hours of work."

5. Future Plans and Creative Diversification

Looking ahead, the hosts outline their strategies for expanding and diversifying their advertising channels. This includes scaling TV campaigns, exploring new ad networks, and continuously testing creative variations to sustain engagement and performance.

Cody [56:19]: "We plan to dedicate 40% of our time to creating high-quality content for brand awareness channels."

Sean [59:28]: "We aim to diversify creative and scale spend through continued validation and layered measurement."

6. Conclusion and Takeaways

The episode wraps up with reflections on the complexities of evaluating new ad channels like AppLovin and the necessity of collaborative efforts to navigate the evolving marketing landscape. The hosts emphasize the importance of testing, measurement, and creative scalability in achieving sustained marketing success.

Cody [42:14]: "It's interesting to see collectively us all work through this problem together at once."

The hosts encourage listeners to leverage the discussed tools and strategies to optimize their own marketing operations, highlighting the continuous journey of adaptation and learning in the dynamic world of digital advertising.

Notable Quotes

• Cody [00:02]: "I turned 31 on Friday. I had dinner with Sean Ridge, CEO. So not too much different."
• Sean [09:00]: "AppLovin is a company that originally started in developing games... they realized there's a big opportunity to develop an ad network on top of it."
• Sean [26:59]: "New customer percentage is at 81%... lower than Facebook but still pretty high."
• Cody [27:01]: "It was incremental on both a 3% lift on new customers and a 4 or 5% lift on total, with a $146 cost per incremental order."
• Sean [11:45]: "I think AppLovin is a 6 out of 10 for the majority of brands... it’s going to be a good channel for about 10% of spend."
• Cody [51:18]: "We signed the Marquez deal earlier this year to appeal to a new demo and are taking that onto TV."
• Cody [49:57]: "Rich Panel's AI social media manager handled 11,000 comments, saving us 760 hours of work."

This episode of Marketing Operators offers valuable insights into the effectiveness of emerging ad channels like AppLovin, the importance of creative scalability, and the strategic integration of tools to optimize marketing performance. Whether you're a seasoned marketer or new to the field, the discussions provide actionable takeaways to enhance your advertising strategies.