Learn How We Took a Brand New Mobile App from $0 to Making $15K MRR in Just 6 Months Using Facebook Ads and How We Plan to Hit $100K a Month.
Our client launched a mobile app that helps Poshmark resellers with automation last December and wanted to get as many Poshmark resellers to try it out and ultimately subscribe to the monthly package.
A Mistake We Made
We launched a Facebook ads campaign with an “awareness” objective (instead of an “installs” objective). This sent people to a nice landing page that linked out to both the App Store and Play Store for people to download the app on iPhone and Android respectively.
We got a few installs but we couldn’t really tell how many of those installs came from the ad versus organic/other channels – because the objective we chose only reported the number of clicks to the landing page, not app installs.
And even if we knew how many installs came from the ad, we still didn’t know what interest groups/audiences had the best cost per install (CPI), in order to optimize and scale our budget.
After spending over seven hundred dollars without adequate data (i.e installs and trials report), we stopped the campaign and worked closely with our client’s app developer to setup up app events tracking.
This allowed us to not only create an installs campaign but also track where our installs were coming from, which installs led to trials, and which trials led to purchases (in some cases).
Finding Winning Audience
Now that we could track what ad sets were bringing in what installs at what cost, we started optimizing and testing different interest groups and audiences – scaling the profitable low CPI ones and cutting the ones with high CPIs.
We did all our audience testing using an ABO campaign (Ad Set Budget Optimization), spending $10 to $30 on each ad set for three days and optimizing afterward. All ad sets with a CPI of not more than $30 were then moved to a CBO campaign (Campaign Budget Optimization).
With the CBO campaigns, we let Facebook’s artificial intelligence determine how much to spend on each ad set – usually the one most likely to convert at the lowest cost possible.
If the CBO campaign maintains a nice CPI, we keep increasing the budget by $50 every few days and duplicating it sometimes in order to double the budget. This is how we’ve been able to profitably scale to a $400 daily spend.
Finding Winning Creatives
We tested 2 to 6 images/videos per campaign. We maintained the same ad copy and call to action. Some images did better with certain interest groups than others, so there wasn’t a clear-cut winner.
The image above with mail packages, for example, got us a cheap CPI of $9.71 from our Goodwill Stores interest group and a high $48 CPI from our lookalike audience. What we did here was turn off the ad for that particular high-cost ad set once we had statistically significant data.
New people in marketing who are just discovering A/B testing might assume it’s just black and white – winner and loser, but Facebook ads’ machine learning and reporting has gotten so sophisticated to where it’s now hard to call a creative a flat-out loser but rather ‘bad fit’ for some audience and perfect for others.
You can even see down to how each creative performs among different age groups and optimize accordingly.
How Many Installs Took Us to $15K a Month?
So, six months after spending a total of $25K, we had 1,940 app installs with 681 starting a free trial and 522 of them purchasing the $30 monthly subscription. 522 * $30 gives us $15,660 in monthly recurring revenue (MRR).
What’s Next? 100K a Month! – Our Roadmap
The screenshot above is a conversion I had with the client who owns the app. We got on a 30-minute call where I shared how I plan to get the app to be making $100K a month like I’ve done for other businesses.
Here’s the formula;
In order to make $100K a month, we need 3,334 people paying us $30 each, per month. We currently have 522 people paying us that, so, we need 2,812 more paid users like that.
And if those 522 came from 1,940 people who installed the app, then it means we have a 27% conversion rate. Therefore, we need 10,415 more installs to hit $100K a month.
We’re currently averaging 40 installs a day with a $400 daily ad spend. This means that if everything stays the same, it would take us 260 days (around 9 months) to get to $100K a month (MRR).
Conclusion
You can see that in order to hit your desired revenue goal without waiting forever, you have to do some marketing; putting your product in front of your ideal customers. And paid ads is the way to go, without knocking on doors or irritating friends and family (who aren’t scalable anyways).
You also have to test different angles, audiences, interest groups, and creatives to see which performs best and optimize accordingly.
If you need help building a profitable campaign like this for your business, feel free to reach out to us and we would be glad to help in any way possible.
Cheers!
