Is AppLovin Making a Comeback?

[00:00:00] Richard Gaffin: All right folks. Welcome to another episode of the E-Commerce Playbook Podcast. I'm your host, Richard Gaffin, director of Digital Product Strategy here at Common Thread Collective. And I'm joined today, bright and early in the AM by Mr. Tony, the Chopper Chop, who is my co-host on the DDC Hotline podcast and also our VP of Paid social.

This, that's your first role. Your secondary role is that you're the VP of Paid media here at Common Thread Collective. And so we got Tony on today because we wanna talk about something. Unusual for us, I think, which is that on this program we've spoken many a time about why channel expansion is generally speaking, unless you're in a very specific place, a bad idea, you need to be mastering meta and you need to master Google before you move into other platforms, before you start saying, Hey, let's test out Snap, let's test out Pinterest, whatever, without actually nailing down meta.

Now we're not necessarily contradicting that, but Tony has some thoughts on specific ways that channel expansion. Makes sense. So with his McCafe in hand, Tony's ready to go. Tony, how you doing, man?

[00:01:03] Tony Chopp: I am pretty good, Richard. I've

[00:01:04] Richard Gaffin: Now,

[00:01:05] Tony Chopp: been here for several hours, so this isn't even early. This is like midday for me.

[00:01:09] Richard Gaffin: several hours. My God, for everybody's context, it's 8:00 AM So that just gives you a sense of how Tony Tony works here, but

[00:01:15] Tony Chopp: yeah, yeah, so, yeah. It's interesting. So a couple things. So you said VP of paid social? I, my, my role as VP of paid media. I, I am, I am media channel agnostic. Okay. I, what I, the way that I think of my, the way that I think about myself and the way that, the way that we think about ourselves on the media team at at CTC is we are, we are investors, we are media investors. We take capital and we deploy it for a return. We are very much agnostic about where that happens. to your point about channel expansion and when it's good or bad I think I might reframe that a little bit instead of good or bad, more matter of timing and

[00:02:05] Richard Gaffin: Mm-hmm.

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[00:03:05] Tony Chopp: So if you are a, a nascent, an early stage e-commerce brand that's selling something general, let's say apparel, getting your meta investment and not only your meta investment, but your meta operations. Which starts with your creative production and the setup of your advertising account, and ultimately the investment into Meta First is going to get you farther, faster than going and trying to take your chips and putting 'em all across the roulette board, if you will.

Okay, so if you picture, we use the roulette analogy. The, there was one bet you could make that is very likely going to have a very good return. It's meta, and so you should put the majority of your chips there early on in the process. Okay, so that's, that's stage number one. The second stage, Google, for the most part, for most brands, is going to represent a meaningful portion of useful investment, not just on brand search, but on. search and shopping. Okay, so once you've established those two things, and by establish I mean that really, that you have your, your whole operations dialed in, starting with your creative production, you feel like you've got that question answered to where you have enough creative coming into the system that you were able to. Generate a, a meaningful portion of your media investment into Meta and Google, and you feel, I'll use the word stability which is, can be hard to come by in the media landscape, but you feel, okay, cool. We've got things dialed in on Meta and Google, so that doesn't, all that said, that doesn't mean that making investments in other places. it's Snapchat or app loving, or Pinterest or TikTok is necessarily bad. It's more a question of sequencing. Alright, so we've established that you got meta dialed in, you got Google dialed in, and by dialed in, I really mean not just the account, but what happens before the account. There's another assumption that I, that I'm making about your brand or that we deploy here at CTC and that is you are using some form of incrementality measure. using the geo holdout incrementality measurement is a predicate in, in order to be able to expand your reach into additional channels outside of meta and Google. Really, really important part. Okay, so meta Google dialed in. You've got incrementality measurement in place, and this is gonna be, this is gonna be full circle because part of what's allowed CTC to get to this point with our clients where we're able to say, we are your media investment partners.

We will help you expand your investment into additional places is. A creator content machine, CCM. Okay, so this hooks back to what I said originally, which is getting your meta function dialed in as actually a function, as actually an output of having the creative system. Well creator content or nine by 16 UGC content is the exact same thing that we need to go outside of Meta and Google and into app loving Snapchat, Pinterest, TikTok, YouTube shorts.

It is the root principle fuel that is necessary. Okay, so these were a lot of words me from channel expansion, good or bad.

[00:07:09] Richard Gaffin: Mm-hmm.

[00:07:09] Tony Chopp: give it a little bit more nuance into channel expansion is a function of having the necessary fuel, having the correct measurement in order to do so, and having your core channels

[00:07:24] Richard Gaffin: Right.

[00:07:25] Tony Chopp: in a place where you feel like we're, we're pretty dialed in.

[00:07:28] Richard Gaffin: Yeah. So the, the to in, to summarize it even more is just like there's a set of circumstances under which channel expansion makes perfect sense. And we're talking about the situation that I think we find ourselves in, in terms of the system that we've built. We're now in a place where channel expansion and exploring that for our.

It starts to make a lot of sense. We have the creator content thing in place. We have incrementality measurements so we can understand exactly what's happening with these channels rather than just sort of throwing money at them. So the, the ostensible title of this particular episode, or when we went into it was Snap Plus App, app of course being app loving.

So the implication of course, being that those two channels are the ones we're most interested in, but tell us a little bit more about why we're bullish on those.

[00:08:10] Tony Chopp: Yeah, so several years ago, probably even 2024. CTCs Media investment, call it $400 million over the course of the year was 90% Meta and

[00:08:29] Richard Gaffin: Mm-hmm.

[00:08:30] Tony Chopp: over the course of the last 12 months or so, we've begun to execute and operate under this. This infrastructure of incrementality testing and UGC content explored channel expansion in different places. We're seeing, we're noticing that we're able to deliver media into some places more than others, meaning it represents a, the scale opportunity represents a better bet. Okay. An app Loving is the one that is the really big standout in this space. So, a actually, let me back up a step. So the first, in the first half of this year, we started going after a program that we called YouTube 10 x. And the, the premise of it is the exact same thing. It's we have the content, do we have the measurement, and is the scale meaningful in the channel? So it's kind of a, let me say it this way. do channel expansion definition is going to expand the amount of work, right? You have another channel that you have to go deploy

[00:09:52] Richard Gaffin: Mm-hmm. Hmm.

[00:10:21] Tony Chopp: a meaningful dollar amount is being invested. Keep, just keep coming back to this idea of what, what we are, we are investors.

[00:10:29] Richard Gaffin: Mm-hmm.

[00:10:29] Tony Chopp: job is to take the capital, invest it, and create a return with that capital. So we wanna put it into places where we can make a big investment.

[00:10:40] Richard Gaffin: Mm-hmm.

[00:10:42] Tony Chopp: So what we've seen and YouTube out outside of, as far as like our incrementality testing portfolio, we have the most tests on Meta and Google, but number three in that list is YouTube.

So we've done something like 30 or 40 incrementality tests on YouTube. So we have the most measurement on it, leading to the most confidence, leading to the most deployment. So basically right now, since we have that. Rock rolling down the hill, so to speak. We are moving on to the next stage, the rinse and repeat.

Okay. We see another area for channel expansion where we think there's meaningful volume and app. App loving is the one that I, I'm personally the most excited about. So have one client that has been the tip of the spear for this one. We got it started in the summertime. As of last month, the the app Loving Investment, which started, which was zero as of last month, the app loving represented 30% of the total media investment for this brand

[00:11:51] Richard Gaffin: Wow.

[00:11:51] Tony Chopp: August. So thi this is kind of what I'm talking about, like going from, and this, this particular brand spends has been spending two or. You know, $250,000 a month in media, give or take, it grows a little bit every month. in August we spent $70,000 on app Love. So now, and it's incremental spend, right? It's not it's not, we take from Meta or Google and we put it over into App Loving.

It's, it's incremental, it stacks

[00:12:23] Richard Gaffin: Right.

[00:12:24] Tony Chopp: So our media investment for this particular brand grew faster. Quarter over quarter in the third quarter versus the second quarter than it ever has before. And it was a result of able to deploy additional investment into app Loving. So for those who don't know, app Loving is a a totally different inventory source than really any, anything else that we run on. So it runs on mobile games. I think there's two things that are making it functional. Number one, they, they took a lot of cues in their pixel development from some of the other media platforms and, and how they're actually able to run down and track down users who convert.

[00:13:09] Richard Gaffin: Mm-hmm.

[00:13:10] Tony Chopp: two, it's the style of content.

It's UGC con content creator content, the same stuff that's working everywhere else. We put it. So it's these two things. App elevens pixel UGC style content, plus the inventory that's available. The massive amount of inventory

[00:13:27] Richard Gaffin: Mm-hmm.

[00:13:27] Tony Chopp: available is leading to the Holy Grail scale, incremental investment content portability from what we already have.

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I.

Yeah, so I recall like last year we had this exact same conversation or I had this same conversation with Taylor 'cause App Loving was this there. There was a lot of buzz around it and our approach that time of course, was. We approached it with skepticism as I think we should have now, is the only difference between this year and last year that we now have the tooling to understand how App Loving works or, or rather, what App Loving can do for us, or is there something about this year and the product itself, the platform itself that is particularly or extra exciting?

[00:15:07] Tony Chopp: Well, all. I think all things. All things. So

[00:15:10] Richard Gaffin: Mm-hmm.

[00:15:10] Tony Chopp: better tooling. The product has evolved. So last year when they first came out, the product, they had co cost cap bidding, but,

[00:15:20] Richard Gaffin: Hmm.

[00:15:20] Tony Chopp: they've launched row space bidding as well. So they've evolved the product in, in a bunch of ways that's, that's useful and meaningful. But also the, the platform has evolved. So when App App Loving started last year, when they hit the scene, like just before Q4 of last year, it was the plat, the platform was closed. They were only accepting certain types of advertisers that had certain investment, levels.

[00:15:47] Richard Gaffin: Right.

[00:15:48] Tony Chopp: part, part of what happened last year is there's a bit of a feeding frenzy because of the scarcity of being

[00:15:53] Richard Gaffin: Yeah.

[00:15:53] Tony Chopp: get into the platform. And also the, the folks at App Loving running the running, the running the media basically. So functioning as like a account services, like, so actually running the media for, for clients.

And I think that created some operational, what's the

[00:16:11] Richard Gaffin: Yeah.

[00:16:12] Tony Chopp: for? Operational burden for them to, to actually onboard new clients. So the big thing that's changing is on October 1st, the Apple 11 platform is opening up to self-serve, quasi self-serve. Right now you have to have a referral code able to

[00:16:29] Richard Gaffin: Hmm.

[00:16:29] Tony Chopp: onto the platform, which CTC has in our partnership with App Loving. But, and then we're gonna do, as part of this, like this transition is instead of the Apple oven folks running the media CTCs team is gonna run the media for our clients. So actually do the campaign builds. Do the optimization. Do the measurement. So we're gonna deploy all of our CTC media investor skills into the app level channel.

[00:16:59] Richard Gaffin: And so it sounds like, I mean, like this year, the, the sort of promise of at 11 from, from last year could maybe completely come to fruition or can come to fruition in a, a more robust way than it did last year because I, I, as I recall, like our con the conversation from, from holiday of last year was that this is really like, has the potential to be.

Meta 2.0 or something like that, right? Like it has this sort of massive reach. It also, like one thing we were talking about too is like, has the potential to tap an audience that is like pretty unique. Like genuine, like you mentioned that the third, the 30 K in spend or whatever, being genuinely incremental, like these are reaching new people, grabbing new dollars that wouldn't otherwise be found on meta.

Like there's a real potential for that on app level as well. 'cause it's like. Old ladies playing be or whatever. Like that's, that's part of it. Like the, the mobile gaming community. So I, I guess what I'm saying is like, so to what extent do you feel like those things are still true? Yeah. What, what do you, how, how bullish are you on, are you bullish to that extent, I guess, for this year?

[00:18:03] Tony Chopp: yeah. The short answer is, yeah. So

[00:18:05] Richard Gaffin: Mm-hmm.

[00:18:06] Tony Chopp: like there's no guarantees in my world the

[00:18:08] Richard Gaffin: Of course.

[00:18:09] Tony Chopp: investor, just like there's no guarantees in the world of, you know, any, any other investors.

[00:18:13] Richard Gaffin: Mm-hmm.

[00:18:14] Tony Chopp: But there's like, there's attributes that make things a good bet.

[00:18:18] Richard Gaffin: Yeah.

[00:18:19] Tony Chopp: the, the attributes that we've seen from our early exploration into app loving strong incrementality in many cases, in most cases showing up really strong as in new traffic or new customers. Combined with the scale potential is, is what's making us really bullish. So is it gonna work for a hundred percent of brands, like no, a

[00:18:45] Richard Gaffin: Right.

[00:18:46] Tony Chopp: Definitely not. But is it, is it a smart bet? So bring, bring it back to the, the purpose of this, this sort of overarching principle of this topic of this conversation, right.

[00:18:57] Richard Gaffin: Mm-hmm.

[00:18:58] Tony Chopp: So the, the idea is every single time you go and, bifurcate your efforts into different things. You're essentially dividing your energy into different things, so it's gotta be worth it. Right? So with app Loving. It's like, yeah, you're gonna go spend some energy. You're actually CT C's gonna go spend some energy on the testing and the account building and the, the optimization of it.

But it's not really a question for me. It's not really a question of what

[00:19:26] Richard Gaffin: Mm-hmm.

[00:19:30] Tony Chopp: investment that we make in time and energy and resources. The question is what happens if it does work?

[00:19:35] Richard Gaffin: Yeah. Yeah, totally.

[00:19:37] Tony Chopp: And I think we're, you know. It, the jury. The jury is still out on, like how often we see it as an effective investment deployment for our portfolio.

Is it for 20% of clients, 40% of clients, 60, 80%? What? The jury's still out on that, but what I can tell you for sure is that for the brands that, that it makes sense for and we're able to, to get it dialed in, it's going to make a meaningful. It's going to be a place where we're going to invest meaningful amounts of media.

[00:20:10] Richard Gaffin: Yeah. Yeah. No, I, I, it's, it feels like it has the potential to transform a lot of. The way we do things in, in terms of like all of a sudden now we're producing, I'm just thinking from my perspective, producing content on this new platform and how to optimize and all of these things that we've been thinking about from meta pretty much exclusively.

And Google for the last like few years, all of a sudden there's this new player, which I think is like kind of exciting. So I was gonna ask, what, if any, in this initial few months that we've been kind of piloting this, what sort of best practices. Have initially emerged. Is there something about buying on app loving, app loving that feels a little bit different than meta or anything like that?

[00:20:51] Tony Chopp: Yeah, I mean. I wish I could, I wish I would tell you. Like there's some sort of magical app loving recipe, but it's not, it's not really, it's not really the way that CTC thinks about it.

[00:21:03] Richard Gaffin: Right.

[00:21:03] Tony Chopp: the, the media channel is the end point. we, what CTC does is all of the things that lead up to that distribution, right?

So get our, get to Financial understanding of how a business makes money and translate that into platform targets. We're gonna do that through, through incrementality testing. And this is like by the time I get into the media channel, I've done so much of the work to understand what I need to set the target to critical. Then I set the target. Then the other thing is we're gonna feed app loving with a bunch of fuel, a bunch of UGC content, creator fuel. Right? And these two things are like, it sounds like I'm, it might sound like I'm, I dodging the question, or like, like tactically like. App loving this, that, the other thing.

But I'm not, I'm actually very intentionally saying to you that is not where the value is. The value that CTC provides is in getting to the measure, understanding the business, getting the measurements so that we can set the target correctly, and then feeding the system with the fuel that's necessary. So

[00:22:20] Richard Gaffin: Yeah.

[00:22:20] Tony Chopp: that, we're gonna go and do the same things that we, we do in in every other media account.

We're gonna keep it as consolidated as possible. we're gonna separate when, when, and if we need different targets. So if we have really different AOBs or different margins by a particular by a particular or group of products, then we're gonna have separate campaigns. Why? Because we need separate bidding.

So not just because like, oh, we want some sort of pretty structure in the account. That's not it at all. It's all relates back to the targets that we need. The ad account structure follows all of that.

[00:22:57] Richard Gaffin: Right.

[00:22:58] Tony Chopp: And the other thing too, Richard, just this is another thing that's like, y'all want me to talk about media tactics?

I'm not. It's boring. So what we are gonna do is spend a lot of time making sure that the pixel is wired in correctly, making sure that we have really good data signal for the app, love and platform to go, to go and find the audience and convert against a target CPA or a target Ross.

[00:23:22] Richard Gaffin: So really, like the short answer is it's treating this the same as any other media platform right now, which is like our, our approach is that the, the media buying sort of like structural tactics thing is like unless other than the kind of basic of like what you're talking about, a OV. So you're controlling.

Margin. Once you have that in place, really it's just then like everything else, like we've been beating this drum over and over again. It's just feeding it the right creative and understanding like whether it's working or not. And once you have those senses, then that's pretty much it.

[00:23:52] Tony Chopp: of creative. There's, there's one little nuance to the Apple thing.

[00:23:55] Richard Gaffin: Alright.

[00:23:55] Tony Chopp: card, so they have

[00:23:56] Richard Gaffin: Oh, interesting.

[00:23:57] Tony Chopp: a static image at the end of the ad unit. So,

[00:24:00] Richard Gaffin: huh?

[00:24:00] Tony Chopp: and there's some, there's some experimentation that, that we've done over there on like what, what to use for the end card or to actually drive, you know, drive CTA from the end card.

So that's like a little bit of a nuance in the call to action stage of.

[00:24:14] Richard Gaffin: that's, so you have to have an end card and what it is, is whatever, but you just, it has to end on a static that sits then for, I dunno. Interesting. Okay. Cool. All right, well, I mean, I think like anything else, any other observations? Anything else to hit here?

[00:24:28] Tony Chopp: yeah, I mean, so we'll be back here talking about it again in whatever may be sometime towards the end of October. So we have. 14 or 15 clients that we're bringing onto the platform here on the October 1st opening date. The, the purpose for me is all about, we're, right now we're doing the incrementality test set up across all, all the portfolio of clients.

'cause we wanna, we have a, we have a couple that we've done for App 11, so we, we really want to have, to come out of this, this first cohort with, uh uh. A, an improved understanding of the incrementality of the channel. So we're, we're excited to do that. And I'm, we're in conversation with the app 11 team about hopefully talking about the results of that study and, and co co-publishing, the the results.

So, 14, I think we have 14 clients right now in the pilot. We're gonna go in and do the run the tests in October and then we'll be back.

[00:25:34] Richard Gaffin: All right, well, I think that's gonna do it for this conversation then. I think like, overall, like the takeaway here is that. Like any investment, a prerequisite to a good investment is doing your due diligence. We at CTC have the tools to do your due diligence for you.

So if you're interested in a conversation getting in on this then you know where to find us. Comment thread code.com, hit that high risk button, let us know. You'd like to talk maybe even specifically about App love, and we'd love to have a conversation with you. But alright, I think that's gonna do it for us for this week.

Until next time. I'm Richard. I'm, this is Tony with good chatting with you and we'll see you all next time.