Duolingo · B2C · language learning app
Use the end-of-lesson ad slot to advertise your own paid plan
Guest says house ads beat programmatic ads; no numbers
What they did
What happened
In their words
Why Your Free Users Are Your Real Growth Engine – Cem Kansu, Duolingo CPO
Cem KansuAnd we decide, like you said, if we should show you a programmatic ad versus one of our internal ads, which could be an ad for a subscription, or it could also be an ad for our other products like the Duolingo English test. But we call those basically internal ads that we decide we've produced and it is a Duolingo product.
Cem KansuMajority of them are going to be either Super Duolingo ads or Duolingo Max ads. The decision logic is mostly now controlled by ML actually, but the ML uses various signals that is trying to figure out LTV maximization at its core and it is looking at every signal that we feed it that could be an indicator for someone that is more likely to buy Super.
Cem KansuOr it also balances out, of course, if, for example, it's shown you the same, or it doesn't really show you the same Super ad three times, but it's shown you Super ad three times that clearly you're not interested in, it backs off and shows you other ads.
Cem KansuSo it is basically built to optimize LTV with a likelihood to purchase being the objective function.
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More from this episode
- Keep lessons free and sell learners' translations to news sitesSmall revenue; dropped by 2016 (price race and low translation quality)
- Charge $1-3 to fix a broken streakA good share of users paid; showed how much users value their streak
- Show one ad only after a lesson ends, and test it against retentionRetention mostly neutral, at most a slight hit, across ad tests
- Count ad complaints per million users and compare them to other complaintsMissing-course complaints were 3x ad complaints; ads launched
- Block gambling and sketchy ad types, even if it costs revenueAccepted lost ad revenue for better experience; no numbers
- Sell ads directly to brands and have app characters introduce themUsers like the format; slow to sell because it's custom
- Run 3-6 month holdouts for changes whose effects show up lateNew push lifts can turn negative after about 6 weeks
- Sell a one-time ad-free month at $3, $5 or $10 to test demandUptake far above expectations; led to the subscription
- Launch a plan with no ads, offline use, and 'support our mission'About half of early buyers paid to support the app; started a run rate
- Offer a free trial even though the app is already freeOne of the biggest unlocks; guest had expected it to flop
- Tell users on the paywall you'll remind them on day 5 of a 7-day trialWon A/B tests by easing fear of subscription traps
- Change the buy button to say 'Try for $0.00'Beat 'Try for free' on both trial starts and trial-to-paid
- Give subscribers unlimited hearts so mistakes never stop their lessonsBig turning point: raised subscription conversion and retention
- Make paid features free when a test shows they earn littleTook a small revenue hit on purpose to grow free users
- Add new subjects inside the main app instead of launching new appsSeparate apps were 'hard mode'; in-app works better, but many users still don't know
- Offer live human tutors on demand in a higher-priced planFailed: users joined, panicked and left; later replaced by AI video call
Tags: internal-ads, ml, ltv, video-ads