The growth of a mobile product generally breaks down into three distinct stages as the product ages, its user base grows, and, perhaps most cardinally, the level of awareness it has achieved (and the number of people that have been exposed to it over time) continues to grow.
The last point is somewhat abstruse, but given the nature of product distribution on mobile — with the fixed install, the “store” and storefront paradigm, and now the slowing growth of smartphone sales — it is critical to understand when planning a growth strategy on mobile. Given some level of churn, an app’s DAU could remain constant while the number of people that have been exposed to it (through advertising or word of mouth) increases consistently: if the qualitatively “best” users — the users for whom the app is most relevant — were exposed to the product first (as is usually the case), then each time the product’s diameter of awareness widens (ie. each time a person is exposed to the product for the first time), the level of friction experienced in recruiting that person increases (I discuss this idea in more detail here).
Conceptually, this is similar to oil well economics: the oil closest to a wellhead is easiest to surface and thus cheapest to refine, and the oil in the well gets more and more expensive to retrieve over time until a point is reached for which the well is no longer economically viable (despite still containing oil). Applying this concept to mobile products: if the best users for a product are surfaced first — because they’re easiest to reach with standard ad targeting, they’re the most responsive to ads, and their social circles are the easiest to penetrate and establish networks within — then by logical extension, as time passes, each new person exposed to a mobile product is harder to recruit than the last, and a mobile product experiences continuously increasing marketing friction as it ages.
With this idea established, it’s helpful to build a framework for thinking about a mobile product’s marketing lifecycle with respect to its age and the amount of people that are aware of it at any given point in time. With respect to this, I separate the mobile marketing lifecycle into three distinct stages, each of which requires a distinct set of marketing tactics: the Honeymoon Stage, the Growth Stage, and the Strategy Stage.
In the Honeymoon Stage, the app is new and few people are aware of it: each channel that ads are run across is fertile ground, and since the most relevant users are being reached for the first time, performance should be strong. Given a “quality” waterfall of advertising channels (with the highest-quality, highest-transparency channels at the very top), the developer has the luxury of only using the best sources of traffic: owned inventory, very little fraud, direct API reporting access, etc., and these channels can drive a considerable amount of traffic and DNU. Because the app is new, no churned users exist: even the tourists are active, and as a result, virality is high and effective acquisition costs are low.
The Growth Stage starts once the app has reached a point of saturation on the channels through which it was launched and the marketing team needs to descend beyond the top tier of sources in the quality waterfall to reach new users. This change introduces a number of challenges: an increase in traffic channels creates more campaign management overhead, and the lower quality channels require closer supervision as they’re more susceptible to fraud. User acquisition teams tend to grow during the growth stage as the amount of manual work (reporting, frequent ad creative testing and changing) needed to maintain DNU levels increases.
The Strategy Stage begins when the marketing team is forced to use more complex procedures for acquiring users than merely running direct response ad campaigns. Specific strategies for reaching new users — like IP integrations, partnerships, out-of-home media campaigns, television commercials, contests / sweepstakes, heavy integration between marketing campaigns and the product, brand building exercises, etc. — are constructed and executed, sometimes on fixed-length intervals, to reach users outside of the limited pool that is available in direct response ad inventory. Note that the marketing team might be using these kinds of techniques from as early as the Honeymoon stage, but what defines the Strategy stage is the fact that direct response alone is no longer viable: other advertising approaches need to be worked into the marketing mix (oftentimes in conjunction with direct response campaigns, eg. television ads coordinated with mobile direct response ads in a specific market) in order to reach new users.
Each of these phases exert different demands on a marketing team. In the Honeymoon stage, the team might only consist of one or two people who act as generalists, managing campaigns and handling reporting. In the Growth stage, team members need to specialize (focusing on specific types of channels) and the sheer scale of third-party service integrations and reporting work may necessitate automation, requiring dedicated engineering and analysis resources. And in the Strategy stage, creative management and media planning may become less testable and employee skillsets may bifurcate away from the infrastructure that had been built to support direct response advertising.
This shift in required skills can be subtle, but it’s important to anticipate and pre-empt it. As the product evolves, the marketing tactics used to maintain and hopefully grow its user base need to evolve, too. Using this three-stage framework for thinking about how this evolution happens can help a team make sure that they’re sufficiently equipped to sustain their product.
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