Photoroom · B2C · AI photo editing app
Show the AI background remover in the first 6 seconds of every ad
Lower CAC, higher conversion; opened Mexico, Brazil and Indonesia
What they did
What happened
In their words
12 AI Growth Lessons for Subscription Apps – Phil Carter, Elemental Growth
Phil Carter… like Mexico, Brazil, Indonesia, and the reason for that was Photoroom like many consumer apps is heavily dependent on paid user acquisition to scale, but they just didn't have sufficiently high conversion rates in those markets in order to get the unit economics to work through paid acquisition channels, even though the average cost for an impression on ad networks in these markets tends to be quite a bit lower than in markets like the US.
Phil CarterBut when they launched their new AI powered background feature where you could remove a background or replace a background using AI, not only did they see subscriber conversion rates and the product go up significantly, but they also found that by leading with those AI features in ad concepts on Meta and TikTok, they got much better performance, especially when they put it within the first six seconds of the ad. It just really caught user's attention. It goes back to the automagical experience, right?
Phil CarterIf I'm watching an ad with the 10th version of a calorie tracker or a language learning tool, it's like, "Okay, I've seen this before and I'm like next." But if I see this AI powered background removal feature as somebody who's interested in photography that I've never seen before, then I'm much more likely to click through and give the product a chance. And so not only did this significantly improve their subscriber CAC numbers and their subscriber conversion rates, but it also fundamentally unlocked new international markets that they previously were unable to go into at all.
David BarnardWe've already talked a lot about AI unlocking these kind of features that go viral and that are really powerful in user generated content and stuff like that. And so it makes a ton of sense that those same kind of principles apply to your paid ad spend as well and getting that into the onboarding and getting it into the product in ways that really does drive that excitement about the product and everything. So let's move on to value capture. And …
Get tactics like this every Monday
New tactics from the week's founder interviews, each linked to where it was said.
More from this episode
- Quiz new users, match them to an AI friend, then start a voice chatAdvisor credits it as a big part of their success; no numbers
- Show a shareable card of how the AI character's personality maps to yoursAdvisor calls it a viral artifact people share; no numbers
- Target serious runners with training plans that adapt after every runWon the race-training niche; later bought by Strava
- Put a small always-visible widget or calendar reminder where users already workGuest now uses voice nearly as much as typing; no company numbers
- Ship many AI study features fast and show each one on TikTok and DiscordNo results shared
- Use AI tools to go from tens to 400+ ad concepts a month400+ concepts/month; said to lower CAC and speed up learning
- Film a real person once, then use AI for 30 languages and music variantsAdvisor's standing advice to clients; no numbers
- Let the decks and sites users make get shared and show up in searchGrew with very little paid acquisition; valued at $2B+
- Use cheaper, faster AI models where the output is good enoughProfitable 6 months after launch; faster product and lower compute costs
- Get early-adopter creators to post tutorials and templates for your new AI featureDrove organic adoption of Notion AI and better new-user retention; no numbers
- Replace the hard paywall with a free plan plus a 7-day trial of the best version+75% LTV per user (other pricing changes made at the same time)
- Switch from a hard paywall to a free planSubscriber conversion fell 50%+; reverted after a couple of weeks
- Keep AI features in a pricier top plan; give basic users a taste
- Start with a 7-day free trial, then tune trial length to limit AI costs
Tags: meta, tiktok, ai-feature, hook, first-6-seconds, emerging-markets