Product growth: Launch Ad support [004.6]

Ad ecosystemAfter increasing adoption of voicemail to text premium service to 9%, it was flat and we had to find some more revenue growth. We realized that we were supporting 1200 tps hosted server infrastructure, out of which 91% was for free users. The cost was quite high for the free service we were providing. We had to find a way of monetizing this 91% free user base somehow.

The most logical response was Ad support. The proposal sent ripples inside the Carrier organization but the revenue numbers were too compelling so the higher management approved it with the directive that there should be no calls to customer care.

Our biggest argument was that most of the 3rd party apps Carrier was pre-loading on their Android devices were Ad supported so why not their own app. Their customer base was consuming Facebook, Instagram, Google, and other apps without complaining about Ads.

So we setup A/B testing with 50,000 of existing users for a period of 2 weeks to understand the impact and adoption of Ad support. Before we could start the A/B testing, a competing Tier 1 Carrier upgraded their voicemail app with Ad support and the lash back from their user base was so strong that they were forced to rollback. Users were upset that they did not have an option to turn off Ad support and their argument was that they were already paying the Carrier monthly fees so they don’t want to see any Ads in their voicemail application which is a Carrier service.

We delayed our A/B testing to revisit our Ad support business model from the users’ perspective. Based on our learning from the faux pas of the competing Tier 1 Carrier, here is how we changed our strategy for the A/B testing:

  1. Auto opted in all free users into Ad support.
  2. Enabled 2 premium features in lieu of Ad support, which was inline playback from voicemail inbox and auto forward to email. (these features were enabled only for voicemail to text premium subscription users)
  3. Informed users upfront when they started the upgraded application that they can Turn Off Ad Support at any time from the Settings menu.
  4. Users were informed while turning off Ads from Settings menu that the 2 premium features will be disabled too by disabling Ad support.
  5. Once user disabled Ads, every time user tried to use the 2 premium features, the user were prompted to enable Ads to unlock these features.

In short, we gave full control to the user and gave them premium features in lieu of them viewing Ads inside the voicemail application. The A/B testing results were fantastic, we got 96% adoption of Ads.

Now the challenge was to figure out the best Ad partner to maximize Ad revenues with minimal integration and have options to display Ads of all media type in the future. We had potential Ad inventory of 600 million impressions per month growing to 1 billion in few months. It was great experience understanding the Ad ecosystem working and understanding the money flow. Finally, we decided to go with the Ad aggregator company that was spun off by the Carrier customer.

As part of the product roadmap, we were supposed to add Ad sponsor channels in the app as tabs and introduce loyalty points too.

Next up… increase price of premium service.

Previous blog in product growth series: Product growth: Increase adoption with new opt-in, UxD, and price plans [004.5].

 

1 Comment

  1. Deepak Hegde says:

    Great way to covert an expense head into a self-supporting/revenue generating service.

Leave a Comment