Sub Club by RevenueCat · 2023-07-26
What it Takes to Succeed with Paid User Acquisition — Thomas Petit, App Growth Consultant
Subscription app growth consultant Thomas Petit on when paid UA can work: three checks before spending (goals, cash you can afford to lose, revenue per install), why algorithmic platforms need roughly $10-20K/month per platform (10-20 conversion events per campaign per day), starting small with Apple Search Ads, influencers or Google web search tests, a measurement stack that grows into an MMP, reading blended metrics by country and platform for incrementality, and a creative process built on testing radically different concepts from many producers.
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Numbers mentioned
| Who | Metric | Value | Context | When |
|---|---|---|---|---|
| personThomas Petit's consulting portfolio | count | hundreds of clients approximate | Clients over the past decade | 0:40 |
| personThomas Petit's consulting portfolio | ad spend | tens of millions of dollars approximate | Ad spend managed over the past decade | 0:40 |
| Thomas Petit client that requires 2x immediate return on paid | roas | 2 x goal | Minimum return required on any paid channel, straight from the money spent; reached on Apple Search Ads only up to a certain scale | 3:54 |
| VC-backed startup where Thomas first ran the whole budget | new customers | 500 users/day goal | Target new users per day from paid UA to iterate on onboarding and paywall | 10:00 |
| VC-backed startup where Thomas first ran the whole budget | time to milestone | 3 months goal | Deadline to learn retention, messaging and creative from paid traffic | 10:20 |
| Bootstrapped app developer with strong ASO the host spoke with | payback period | 366 days goal | Paid UA allowed if it is confidently profitable by day 366 (trial conversions plus year-one renewals) | 8:23 |
| Bootstrapped app developer with strong ASO the host spoke with | retention | 40% illustrative | Assumed share of annual subscribers renewing at year one | 8:41 |
| Bootstrapped app developer with strong ASO the host spoke with | retention | 60–70% illustrative | Renewal rate of year-one renewers at the following renewal | 8:58 |
| Sub Club member with a small paid UA budget | marketing spend | very low five digits approximate | Total cash available for paid UA (not per month) | 12:15 |
| benchmarkMinimum monthly budget per algorithmic ad platform (Meta, TikTok, Google) for a subscription app | ad spend | USD 10K–20Kper platform /month approximate | Below this, campaigns on algorithmic platforms are 'doomed to fail' | 19:00 |
| benchmarkMinimum optimization events an ad campaign needs per day | count | 10–20 eventsper campaign /day approximate | Conversion events (e.g. trials) per campaign per day for the algorithm to learn | 21:00 |
| benchmarkWhat ~$500/day of paid social buys a subscription app | conversion rate | $500/day -> 100-200 installs -> 10-20 trials illustrative | Rough funnel behind the minimum budget; varies with creative and trial rate | 20:23 |
| benchmarkMonthly paid budget at which 2-3 channels can run in parallel | ad spend | USD 50K/month approximate | $0-50K/month is the hardest zone to operate in | 19:44 |
| benchmarkMinimum monthly fee for a freelance UA manager | cost | USD 1,000–3,000/month approximate | Freelancers won't take a client below roughly this fee; agencies also have minimums | 19:20 |
| benchmarkRevenue per install below which a US subscription app cannot make paid UA work | arpu | USD 1per install approximate | Less than $1 revenue per install in the US on a subscription app won't work; ~$1 can work for some games or in cheap Android markets (Pakistan, Indonesia, Egypt) | 27:26 |
| benchmarkRevenue per install at which no UA manager can be profitable | arpu | USD 0.2per install illustrative | 26:50 | |
| marketGoogle Ads share of Android user acquisition spend | share | 50–70% estimate | Varies by market | 34:28 |
| benchmarkBudget for pre-launch message tests with Google web search ads | ad spend | USD 100–500 approximate | Spent purely to learn which message attracts people; return goal zero | 23:44 |
| aggregateWinning ad creatives across Thomas's clients | roas | +100 x illustrative | A rare real winner can be a 100x (not 10x) improvement and change the course of a company | 57:18 |
| aggregateOff-brand 'ugly' winning ad at a Thomas client | revenue | +2 x approximate | Off-brand winning creative brought twice the money | 58:47 |
| benchmarkImpressions an ad platform needs to pick the winning creative out of ~20 | count | 100–200 impressions approximate | The platform shifts most spend to the winner almost immediately and is right ~99% of the time | 55:51 |