Challenge
The Armor VPN mobile app assures its users’ safety and privacy as they browse the internet. The app masks users’ online activity and keeps them safe from hackers.
With privacy concerns on the rise, Armor VPN’s marketing team knew there was a great opportunity to reach consumers who would benefit from their app. But as for many businesses, marketing resources are limited. The marketing team needs to know not just which campaigns are bringing in subscribers, but which are acquiring monthly or annual subscribers who will stick around long-term for more return on ad spend (ROAS). Budget can be allocated to the most effective campaigns, and campaigns not providing valuable users can be ended or adjusted rapidly.
“Today’s campaigns need to be highly targeted and effective to ensure that every dollar spent on user acquisition delivers positive ROAS,” says an Armor VPN marketing executive. “We wanted to be sure we’re maximizing the benefit of our marketing spend.”
To better understand campaigns’ performance and make better decisions about allocating their budget, Armor VPN looked for a predictive analytics solution to guide planning and execution. With a small in-house marketing team, partnering with an outside expert like Pecan made gaining these capabilities much more manageable.
Solution
With Pecan, Armor VPN now makes better-informed marketing decisions with the help of predicted lifetime value (pLTV) models. The models predict the revenue that campaigns will produce, using Day 8 data to predict customer revenue by Day 365.
Predictions from Pecan’s platform are refreshed every day and displayed in a custom-built interactive dashboard created by the Pecan team for Armor VPN.
“We’re able to anticipate within the first few days of a campaign what it will produce in the future, and make adjustments as needed,” says the marketing executive. “Our decisions aren’t just based on short-term information or our intuition. We have access to meaningful predictions to help us choose the right path forward.”
With Pecan’s predictions, the UA team identified a 25% gap on average between the actual user lifetime value and what they expected users’ value to be.
Results
Adopting Pecan’s predictive analytics has helped Armor VPN make more assured marketing budget and campaign decisions.
Pecan’s models predict the average revenue per subscriber for each marketing channel in every geographic region where the Armor VPN user acquisition team runs campaigns. With Pecan’s predictions, the UA team identified a 25% gap on average between the actual user lifetime value and what they expected users’ value to be.
The predictive models spotlight important differences in LTV based on the acquisition channel and provide ongoing guidance for decision-making. Instead of basing decisions on an average user lifetime value across all channels, this future-focused perspective helps the team plan a data-driven per-channel spending strategy.
Every day, the user acquisition team can refer to their Pecan dashboard showing predicted campaign LTV to assess continuously updated predictions about campaigns’ likely outcomes and determine the right actions. For example, they could see a campaign with strong initial results (Day 1 to Day 7) that might appear to be worth additional investment. However, Pecan’s model could predict that the campaign will underperform with regard to users’ pLTV, so the better decision is to end it.
Alternatively, Pecan’s predictions help the team spot “late bloomer” campaigns that might appear to be performing badly because they haven’t brought a lot of subscribers by Day 7, compared to other campaigns. However, Pecan’s models might foresee that subscribers from this campaign will be long-term users with high LTVs. Therefore, despite initial appearances, it would actually be best to double down on this campaign.
“Campaign results in the first day or two may not reflect a campaign’s long-term results,” says the Armor VPN marketing leader. “But now, instead of making our best guesses about which campaigns look like they will succeed, we have more certainty about investing in certain campaigns or making other changes to improve results.”
Additionally, the Armor VPN marketing team can share their predictions about revenue with other business stakeholders. That future perspective is helpful to demonstrate the ongoing importance of investment in marketing efforts, as well as for other departments’ longer-term planning and strategy.
“Predicting lifetime value with Pecan has shaped more effective and efficient decision-making and strategy for our user acquisition efforts,” says the marketing executive. “We have a view into users’ future that’s not available if you only look at data from the past. That’s made us more efficient and precise across the board.”
