The Exponential Growth Model

Welcome back to the Roundsquared Weekly Download Report.

Today we’re going to be revealing the most powerful method we’ve developed for scaling apps fast in the current era.

It has been nearly two decades since the app store was first released. A lot has changed in that time especially in the app marketing landscape. Unfortunately not everyone has kept up with this rapidly changing market.

The reality is the vast majority of apps we see are still using painfully outdated methods for user acquisition and growth. Methods that worked at one time but are no longer the best approach to scaling your app profitable and fast.

One of the biggest reasons for this is the abundance of advertising that consumers are inundated with today. In an effort to increase revenue basically all of the platforms are cramming more and more advertising into users' feeds.

This problem isn’t just limited to social media and advertising platforms. Consumers today have an overwhelming amount of information and choice thrown at them on a daily basis. Never before in history could you be pitched 100 products before breakfast.

All of this means that getting attention and keeping attention in the modern era is more challenging than ever. In the early days of app marketing it wasn’t that challenging to get results. You set up some ads and within hours profitable installs start pouring in. Those days are over.

Consumers today have more options and are more skeptical. You can’t be a beginner anymore and succeed in this market. It takes a sophisticated understanding of the challenges facing apps today and a strategic approach to solving them.

Fortunately we’ve developed a method of app growth that addresses these challenges and turns them into advantages. This model is designed to break through the noise and help your app stand out in a crowded market place.

Introducing The Exponential Growth Model

At Roundsquared we believe at its core hyper profitable app marketing comes down to just three main things. 

First you have Compelling Content. The bedrock of all successful app marketing is the messaging and creative you use to attract the attention of your market. Once you have a potential user's attention, this creative also must convert that attention into a desire to install your app and hopefully convert.

Developing successful creative is a demanding process that requires a high level of strategic planning mixed with creative inspiration. If you want to stand out in the crowd today you absolutely must create captivating content that grabs users attention and holds onto it.

The second thing you need to have a massively successful growth strategy in today’s market is a deep understanding of Algorithmic Advertising.

Organic content alone will typically not drive the results required for exponential growth. Viral content is unpredictable and usually has a short life cycle. That’s why the only method for sustained hyper growth is to combine Compelling Content with powerful advertising strategies.

To succeed today your advertising strategy can not just include a rigorous optimization process and commitment to data analysis. You must also have an up to the minute understanding of the current best practices on each of the major platforms to even have a chance at success.

The third element you need to achieve with exponential app growth is Systematic CRO. 

Generating clicks and installs is great but if you can’t convert those metrics into daily active users and revenue your days are numbered. In order to maximize the effectiveness of your advertising you must also systematically optimize your app to maximize profitability.

This includes constant testing of purchase screens, onboarding flows, price points, push notifications, and much more. Great creative and advertising can only go so far if you’re app isn’t fully optimized to make the most out of each dollar invested into ads.

These three elements are the foundation we’re going to be building from in these newsletters. Compelling content to get and keep attention, paired with powerful advertising strategies to drive installs, and finally aggressive conversion rate optimization in-app to maximize results.

If you commit to executing these three things at the highest levels I can promise you will have zero issues achieving results other apps only dream of.

Let’s spend the rest of this week’s newsletter going a bit deeper into each so that you can really have a good understanding of how to effectively implement them.

Compelling Content: The Bedrock of Exponential Growth

The first pillar of app marketing success is compelling content. This content is the bridge between your app and the world.

Great content grabs attention, tells your story, and sells your product. It drives potential users to install and take action. 

Poor quality content on the other hand is simply ignored. That’s why it is so important to master or hire the skill of crafting unique compelling content for your brand. Without it every dollar you spend on advertising and marketing is being wasted.

The Creative Checklist

There are three major goals each piece of creative and content you develop must accomplish in order to be maximally effective.

The first goal every creative you develop must achieve is that it must capture attention. This is the most important because without it consumers simply scroll past and never even hear your message. This is also the most frequently misunderstood of the goals for content.

You can always tell a beginner at creating content because the ways they capture attention are usually gimmicky and not targeted to an audience. Sure you can get attention by being flashy and yelling at the camera but that kind of creative isn’t targeted.

Gimmicks attract everyone but this isn’t actually what you want when developing ads and creative for your app. You want attention of course, but you want the RIGHT attention. You want the attention of actual potential users for your app, not the masses.

When your creative attracts attention through gimmicks this actually confuses the platforms. Every time you launch an ad or publish a post the platforms are looking at who is engaging with and watching it. If your content attracts engagement from people who are not your target audience this actually hurts your performance.

Instead of amplifying your content to more of the people you actually want it in front of, the platforms will instead start to send it to more of the people who have engaged. If these are not your ideal audiences you are working against yourself. You may get views and clicks but this typically doesn’t result in actual installs and sales.

Advanced marketers know the best way to capture attention is to be relevant. We are all attracted to things that are relevant to us. If you’re about to have a baby all of the sudden any post or video about having your first child is going to grab your attention like nothing else.

The more tuned in to your ideal customers' concerns, desires, and motivations the greater chance you have of crafting viral content for your market. This kind of content gets massive attention from the right people not just anyone and as a result converts more.

The second goal of every creative needs to be positioning and selling your app. Once you’ve captured attention you need to keep it and channel it towards your product. This is most effectively done through story.

As we’ve covered, consumers today have more options than ever before. Your content must communicate why your product is different. It needs to paint a picture for potential users of how their life will be improved by using your app.

It isn’t enough to just say this directly however. Consumers are also more sophisticated and more skeptical today. As a result the best method for conveying the value of your product is often through authentic creative that tells a story.

When you directly make claims about your product consumers first response is to question the validity of these statements. Instead what you want to do is develop partnerships with creators in your market. You can then work with them to create genuine content that shares their experience with the app. This content is far more natural and far more compelling.

The process for this is simply but often takes a dedicated team of people to manage vetting and reaching out to potential creators. Once you’ve connected with them you’ll then need to develop creative briefs that outline the concept for each creative.

As with all marketing you’re going to want to test many different variations. You’ll want to test working with different creators, different hooks, and different messaging. Over time if you’re strategic about it you will start to identify trends in what works and what doesn’t.

You’ll also want to test different formats for creative. There are user generated content styles videos you can create but also statics, carousels, and more. Unfortunately there is no one size fits all approach to app marketing. Every app is different and the content that works best for one app won’t necessarily work well for another.

The key is to focus on selling the benefit of your app through authentic and compelling content that holds attention.

The final goal every creative needs to accomplish is driving the potential user to action. It’s not enough to just tell your story, you must clearly outline the next action these people can take to move forward.

All creative should at a high level follow this simple formula. First start by getting attention through a relevant hook. Then keep that attention and sell the benefit of your app through authentic storytelling. Finally it should drive potential users to take a specific action.

For most apps this action is going to be installing the app but it could also be starting a free trial, creating an account, or taking an action inside the app.

The main thing is making sure you specifically tell potential users what they can do to move forward. It is easy to assume that most people will figure this out on their own but I can tell you from experience that your results will be worse leaving it to chance.

Again you don't want to just assume that one action or one way of phrasing your call to action is going to perform best. A large part of what we do for clients is rigorously testing these details to find the optimum call to action that drives the most conversions.

Once you’ve developed your creative assets the next step is get them out to the market. You can do this a few ways but the most scalable and effective is via effective advertising.

Algorithmic Advertising: The Proven Formula For Exponential Growth

It’s obviously not enough to just have compelling creative. The best assets in the world will do nothing for your app if they sit on a hard drive never to be seen by the market.

Now, when it comes to getting your creative out into the world you’ve got a few options. 

First you can post content organically on the different platforms. This can be a great approach if you’re limited on funds and just want to get early data. The downside of this approach is that it’s typically very slow and relies on the small chance of going viral to have any sort of impact.

The second and most effective method to get your creative in front of your ideal target audience is paid advertising. By leveraging platforms like Facebook, Instagram, TikTok, Google and more you can have your assets in front of thousands of people in your target audience within hours.

Additionally these platforms are incredibly scalable. That means that if you’re profitably getting 1000 new users a month at a small spend, all you need to do to get millions of installs per month is increase your budget.

Done correctly, paid advertising can be one of the most powerful tools to scale your app fast. Done incorrectly it can also be one of the fastest ways to burn through cash. That’s why it is incredibly important to follow a proven method for optimizing and testing your campaigns.

There are three things that are absolutely essential to successfully executing a paid advertising strategy on any platform.

The Paid Advertising Essentials

It’s important to understand that setting up paid advertising is not a one and done event. Successful paid advertising is a process. Even when your campaigns are up and running profitably it takes constant innovation and improvements to maintain performance.

The first essential to successful paid advertising therefore is having a proven process for testing and optimizing your advertising campaigns.

This is critical because no one can know what will work for your app in your market without rigorous testing processes. Unfortunately most advertisers follow the “throw stuff at the wall and see what sticks” approach to testing.

There are a massive number of different variables that you can test with your paid advertising. Each of these can have a huge impact on your results. It’s essential if you want to profitably advertise your app that you follow a proven process for testing each of these in turn.

Over the last decade of successful advertising on virtually all of the platforms we’ve identified the least risky and most profitable approach to campaign development. This process includes systemically isolating and improving each major variable of our campaigns until we get an ROI.

It would take too long to go into every step of this process in this newsletter so I’ll save that for another day, but for now let’s talk basics.

The most important factors of advertising campaigns are the targeting, the messaging, and the creative elements. Each of these can have literally hundreds of different options and angles that you can test for your app. The key thing to understand is that only a few of these will be profitable so it’s our job to find these winners as quickly and affordably as possible.

When optimizing any campaign you’re going to want to start with your audience and targeting first. The reason we do this is that who you send your ads to is actually far more important to getting results than any other variable. 

Just imagine for a second that your app is a tool for musicians that helps them connect with other songwriters. What is going to matter more for getting results, making certain that your ads go to actual musicians that want to connect with other songwriters OR having the perfect messaging for these people? 

Well, obviously if your ad goes to someone who isn’t a musician it isn’t going to matter how good the messaging is. The ad simply won’t be relevant to that person and you’ll have zero chance of converting them.

Each platform is different in terms of how it handles targeting but the goal is to find the targeting that lets you get in front of the right audience as affordably as possible. This means that it’s not always the most direct targeting that is most effective. The reason being is that oftentimes the most direct targeting is also the most competitive and therefore also the most expensive. 

Your goal then is to identify pockets of untapped opportunity to get in front of your ideal users. We do this through systematic testing of all of the relevant targeting options on each platform until we find winners that can scale.

Once you’ve identified the best audiences to target you’re going to want to repeat that process for your creative. You’ll want to find the ideal hooks, ideal formats, and ideal angles that are most effective at getting potential users to install and convert within your app.

It’s incredibly important that as you’re testing you’re using the lessons from each consecutive test to inform the next one. This ensures you’re not wasting time and funds retesting variables you’ve already tried.

The second essential to profitable advertising is something we call 10X Testing. You’ve likely heard of the standard AB testing that most marketers promote. A few decades ago this form of testing was the standard because the tracking and platforms were simply not sophisticated enough to allow for more extensive tests. Today however things have improved dramatically and the old method of testing only two variables at a time is painfully outdated.

There are two costs to consider when running advertising tests for your app. The first is the cost of money which comes as the result of having to invest in ads to get data and learn. The second is the cost of time. This one is often overlooked but can have a huge impact on results.

The question is would you rather identify the top performing assets and audiences for your app in a few months, or would you rather it takes a few years? The old method of AB testing is slow because it locks you down to testing only two different variables at once. This means your rate of learning is massively capped.

With our clients we’re consistently testing 10x that amount each week so that we identify what works and double down on it much faster. This approach, while significantly harder to properly implement, more than pays for itself with the rate with which you can achieve profitable results.

The final essential to profitable advertising in the current paid advertising landscape is understanding Algorithmic Advertising.

In the last decade a lot has changed with how the major digital advertising platforms operate. Artificial intelligence has enabled the platforms to play a much more significant role in helping shape the performance of your campaigns.

Each month when we take on new clients we have the unique opportunity to review other agencies and advertisers' work. One of the biggest mistakes we see in these accounts is a failure to adapt their media buying to current best practices.

All of the major platforms are in an arms race. They invest hundreds of millions of dollars each year to continue to improve their platform to attract more advertisers. If your advertising team is leveraging outdated strategies you’re at best leaving money on the table, and at worst actively working against yourself to get results.

It’s a full time job just to keep up with these changes, but the major trend you must be aware of is a shift to working with the algorithms instead of attempting to control them. 

In the past the best results came from getting hyper focused with your targeting and fine tuning your creative until you found a few winning ads. Today the best results come from identifying winning variables but implementing them in a way that lets the platform show the ideal creative and messaging to the ideal person at the right time.

These platforms are effectively multi billion dollar AIs that have access to far more information about your market than we ever will. They can adapt in real time to track patterns of behavior and display specific ads to specific users that are mostly likely to convert.

If you attempt to try and manually take over this process (which was the correct approach in the past) you’re getting in the way of these systems to get you the best possible results.

That’s why we meet with most of the platforms on a quarterly basis to get up to date reports on the changes they’re making. This is critical to helping ensure our clients are maximizing the effectiveness of their advertising efforts and getting the highest possible ROI.

Systematic CRO: Multiplying Your Advertising Efforts Returns

Once you have compelling content and powerful advertising to get that content into the world, the final pillar of profitable marketing is something we call Systematic CRO.

Great content will capture attention and convert it into active users and revenue. Great advertising will get that content to the masses so you can scale. The final element to results is ensuring that for each user you generate, you’re maximizing the revenue generated.

There is only so much that advertising can do to drive revenue if your app isn’t converting a high percentage of users into sales. Depending on your monetization model this may not directly be sales but the objective is still the same, for each user generated you must maximize the revenue generated to ensure the best results from your marketing efforts.

It’s actually fairly common that we will have campaigns far surpassing industry benchmarks for click through rates and installs, yet still fail to see profitable results. When this happens the place to put your attention is not on attempting to force even more performance out of your ads. Instead you want to focus on maximizing the app's internal profitability.

With our experience of working with hundreds of clients over the years it’s clear that the most successful apps are the ones that can most effectively convert users into revenue. The more profitable your app is, the more advertising channels get unlocked for you, and the more you can capture the dominant position in your market.

The key to effective Conversion Rate Optimization is similar to the key to effective advertising, continuous testing and improvement. That’s why we’ve developed a similar process to the one we use for ads that is instead focused on systematically optimizing the apps we work with.

I won’t spend a ton of time on this in this newsletter since System CRO could easily take up an entire series by itself but I’ll cover some basics here to give you a framework to follow.

Optimizing Your App’s Flowthrough 

The best way to think of all of your marketing efforts is a powerful river with many blocks in it. At the top of this river is a huge reservoir of all of your potential users and customers. In order for them to convert into revenue they need to flow through this river to your end goal of revenue.

Unfortunately when most apps start marketing their product this river will frequently have a large number of blockages that prevent users from flowing. Some apps get lucky and only have a few major blocks to remove, and others will have a long journey of working to remove them. 

In both cases the fact of the matter is the same, in order to get more than a trickle of revenue at the end of your river you must systematically work to remove these blocks.

When you’re starting out these blocks may be getting users to click your ads. Then once you’ve figured that out it could be getting a high enough percentage of people to install from your app store listings.

Each step of the way you want to focus your efforts on removing the blocks furthest up stream. What this means is that it makes no sense to focus on improving your in-app purchase rate if you’re only getting one new user per month. You must first focus on getting clicks, then installs, then trial start, then purchases in that order.

Once your advertising is producing the result of a high number of new users each day at an acceptable cost you can shift your attention to in app optimization. 

To be clear this doesn’t mean you stop optimizing your advertising. Campaigns still require ongoing management to maintain performance and keep results stable. At this point however you must start to focus attention on the next blockages in order to improve results.

Many apps get stuck at this stage by continuing to try and squeeze more performance from their advertising. The problem is that there is a point of diminishing results. If you’ve already cut your cost per install in half or more, it’s unlikely you’re going to be able to repeat that.

Instead you must focus on getting more from each of those installs. The benefit is this work will dramatically improve profitability across all channels including organic installs. We just need to wait until you have enough new daily users coming in to test effectively.

The Systematic CRO Process

When optimizing the internal aspect of your app we want to follow the same process. You’ll want to start by improving the conversion rate of the first interaction your new users have after download. For some apps this will be starting a trial, for some it will be creating an account, for others it may be taking a critical action. 

Despite these differences the goal is the same. Improve the percentage of users that make it past this stage to the next one so that more have an opportunity to convert. Remember if you increase trial starts for example, you also increase the number of people that can convert.

Consider your app for a moment. What is the first major action that you need new users to take to step them closer to a revenue event? Once you have that in mind we can start to optimize.

There are three main tools you can use to improve conversions of any stage of your app. Generally achieving the best results requires a combination of all three.

The first is simplification. This is the process of removing as many barriers as possible to users taking this action. 

I can’t tell you how many times we take on a client that is struggling to profitably scale, only to find that they have a dozen complicated steps before users can even interact with the product. 

Your goal should be to make it as easy and as direct as possible for new users to get to that first major event you want them to take. Start by defining what that event is and then focus on removing any unnecessary steps between opening the app and completing that action.

The second tool is increasing desirability. Each time a user hits an inflection point in your app they need to make a decision, is this step exciting enough to invest the energy, time, or resources required to proceed. If it isn’t they will churn, leave the app, and likely uninstall.

You can increase desirability in a number of ways but the most common one involves improving the communication of the promise for taking this step. If your first major action is a trial start for example the screen for this event should clearly highlight everything they will get to experience during the trial period. 

It’s not enough that your ads or app store listing detail the benefits and features of your app. New users will not have a strong enough understanding of what your product is capable of yet. That’s why you must continue to restate the promise of your app and make certain it is desirable enough to pull users to convert.

The final tool is decreasing risk and uncertainty. You can think of this as the counter force to desirability. For each action you want someone to take in your app they have desirability pulling them forward and the fears of risk and uncertainty holding them back. 

Let’s use a trial start again as an example. If you want to maximize the amount of the friction and uncertainty you can do a number of things. One option you have is to increase the length of the trial so the user has less fear of it renewing before trying it out. You could also consider making the trial only require setting up an account and not require a payment method. Both of these approaches reduce uncertainty and risk and help improve the percentage of people who will convert to trials.

At each stage you can reduce risk in a number of ways but the major ones involve reducing potential loss of time, money, or energy. On your purchase screens a major variable you’ll want to test is the price of your subscription. The higher your monthly or annual fee the more risk and fear someone will have, and the lower conversion will be as a result.

The main thing to remember is that desirability has to be greater than the risk and uncertainty. You have literally hundreds of ways of accomplishing but they all involve some form of either making the step more desirable to complete, or reducing the cost of taking that action,

Well that’s it for this week's newsletter! Hopefully this breakdown of what we call the Exponential Growth model has helped give you some ideas on how to improve your app’s marketing. Each of these three pillars is universally critical to rapidly scaling any app profitably.

Start with your existing content and go through the checklist to ensure that it’s as compelling as possible to your audience. Then once you’ve got a few pieces of compelling content start amplifying that content to your audience with paid advertising. Finally once you’ve got a high level of daily new users for your app, begin optimizing each conversion point.

If you follow this process and commit to continuously iterating until you get results, there is virtually no way you can fail to achieve exponential growth.

Our team is obsessed with helping high growth and venture backed apps scale fast. If you’re interested in getting a custom strategy, reach out by applying to this email and we’ll put one together for you.