Marketing an Award-Winning Language Learning App through Offline Channels — Steven Meyers, Babbel

David Barnard:

This is the third leg of the Sub Club Podcast World Tour. We've been in London, in Vegas. We're going to be with App Promotion Summit in San Francisco and Berlin later this year, talking with experts in the subscription app space.

Today, super excited to have Steven from Babbel. Let's get going. Tell me a little bit about your role at Babbel, and what Babbel is.

Steven Meyers:

Babbel is a language learning subscription platform. We're best known probably for our app, but we do live classes, podcasts, games. You can find all of that stuff in our app. We've been around since pretty early on, 2007. We actually pre-date the iOS App Store. But yeah, we've had a successful run over the years.

David Barnard:

Cool. What I was super excited to talk to you about today is offline ads. Everybody in the app industry, "How do I make Meta work? Apps or search ads?" One of the things I've talked to so many people on the podcast about, and been beating the drum for a while now, is marketing is marketing. Find creative ways to find those top percent of the people that are going to spend in your app. But so few people venture beyond those standard practices. I know Babbel is a master of just trying whatever works.

First off, tell me, what's the philosophy behind the expansive marketing that Babbel does?

Steven Meyers:

Yeah. I think it starts there, where we're open to anything that works. It's interesting. We're generally known as an app, but I think we've really made on our name on the offline marketing side of things. A little bit the reason behind that is we don't really view ourselves as just being an app. We don't behold ourselves to the traditional app marketing channels. Our users are everywhere, so we feel like our marketing should be everywhere.

I think we found pretty early on, as we were experimenting with different marketing channels, that we had struck a chord on some offline channels. We're talking traditional TV, radio, podcasts. Our competition wasn't really there.

David Barnard:

Yeah.

Steven Meyers:

We were able to carve out a little space for ourselves in that area.

David Barnard:

One of the things you told me that really struck me is that too many apps think of themselves as just an app. But really, you're providing a service to users. People don't think of you just as an app, they think of you as, "I want to learn a language." Yes, one of the ways you facilitate that is through the app. But you're just providing a service in their life. And thinking about your business more broadly in that way, helped you to then think about marketing in a more broad way.

Steven Meyers:

Yeah. Yeah, absolutely. I think probably most subscription companies, even if you have just an app, are hopefully trying to do a little bit more than just get the download. That's a little bit of the way we think about it. We have metrics much beyond the download.

For offline channels, since we're talking about that, it's a little bit of a different audience than you might on some of your traditional app-based marketing channels. The audience tends to skew a little bit older. They actually tend to be a little bit non-technical, when you're talking linear TV, radio. For us, it worked really well. These people are usually high income and they buy. It's a little bit of a different audience, if you're trying to monetize a subscription app. It works pretty well. It's always surprising me that a lot of apps ignore this category of things.

David Barnard:

Yeah. We talk about that a lot on the podcast. For a lot of apps, they really struggle to monetize in that under 30 age. If you know that about your app, "We're struggling to monetize those younger users," those are easier to find on Snapchat, TikTok, and stuff like that. But if your high monetization users are older, there's so many channels to meet them at.

One of the cool things y'all do is a ton of radio spots. What does that look like, advertising on radio? Are there minimum buys? What would an app thinking ... I talked to an app yesterday. They know their audience is moms in the Midwest. That's probably a good buy a spot when you know moms are going to be in the car, dropping the kids off at school or picking up the kids from school. Looking for opportunities like that, how would an app go about that? Are there minimum spends? How do you approach radio as a channel?

Steven Meyers:

You just started with probably the hardest channel that you could have, when it comes to offline marketing. As far as targeting on radio, much more difficult to do. You have a few options when it comes to radio. You can do direct, host-specific buys, where you contact a host and you get them to do a very personalized read for you. Generally, if you do it that way, you are going to hone in on a particular audience, the type of people that listen to that particular host. The downside of that is it comes at a much higher cost. The way we tend to buy radio is pretty broad. We buy it nationally and we scatter the entire country. It comes at a much, much cheaper cost.

As far as targeting, you have to balance the idea of am I willing to pay more for a highly targeted audience?

David Barnard:

Right.

Steven Meyers:

Or am I willing to go a little bit broader and get power of numbers that way?

David Barnard:

Yeah.

Steven Meyers:

We tend to go the latter, where we're buying much, much broader. Our audience is quite broad. I think if you feel like you have a pretty broad audience, an offline channel's a pretty good option for you in that regard. That's where the efficiencies get, is when you can buy a little bit broader.

David Barnard:

Right.

Steven Meyers:

And not as expensive. It's actually pretty surprising. I think most people would view offline channels as the more expensive channels to go after. When you buy a certain way, you can actually achieve CPMs that are probably much, much cheaper than Facebook, for example.

David Barnard:

Right. Then, linear TV, another thing y'all experiment with a lot. What does that look like?

Steven Meyers:

Yeah. Linear is a little bit different. For those that don't know linear, that's your traditional cable TV watchers. But what's interesting about TV is it is highly measurable. At least, a lot more than it used to be. It's not the same type of measurement as you might have with a traditional digital channel. I'm sure we can dive into that topic at some point, in terms of how you measure all this stuff. But it is pretty similar how we're buying TV. It's pretty broad. It's the cheaper CPMs. We're buying a ton of spots at very, very low costs and it plays out really well for us.

David Barnard:

Yeah. What are some of the other crazy things? Billboards, or direct mail, or any other crazy things you've experimented with that you think apps should try, it's worth an experiment?

Steven Meyers:

Yeah. I've done it all. We've found a really good place with linear TV, radio, and podcasts.

David Barnard:

Right.

Steven Meyers:

The other places you can go, there's out of home. If you're talking billboards, subway ads, that kind of thing. You can also go direct mail. In my experience, those things tend to be more costly and have much lower reach. They work pretty well if you're a geo-specific type of business. Where it's like, I need to only target people in particular geo.

David Barnard:

Right.

Steven Meyers:

I've found it gets pretty inefficient for companies that are just more broad. It doesn't matter where you are, you're much better off sinking into those larger scale channels, like TV, and radio, and podcasts.

David Barnard:

Yeah. I think the next question everybody would be asking, and you alluded to it already, is I think the scariest part for an app marketer thinking about offline ads is how do I measure? How do I know this is actually going to be effective? What are your top strategies for understanding the effectiveness of this?

Steven Meyers:

Yeah. I can give a quick rundown of how we're measuring it. I will say we're not big brand marketers.

David Barnard:

Yeah.

Steven Meyers:

We're not coming at this, just throwing money at the wall, we don't care how it performs, we're trying to grow our brand. Which is how most people probably view the offline marketing channels. In this day and age, I don't think it's like that. I think a lot of startups, a lot of app-based businesses that are doing this, they're looking at it pretty similarly to how they measure digital. We go about it in a different way.

For digital, you're generally measuring an ad click. In offline, we're leveraging how did you hear responses. It's just another data point that we get to better tell the story of what is happening and where everyone's coming from. That's a super effective way to understand how the offline channels are working. We combine all of these elements. We have click-based things coming in. We have a whole bunch of people that are coming into our site or our app organically. Some of those people are saying that they heard about us through TV or radio, and that's a way that we get to fill in the blanks.

It helps to have that extra data point. I'm not quite sure you can really offline marketing if you're not open to collecting that information.

David Barnard:

There's a ton of ambiguity in measurement anyway. Now's probably a good time to embrace that ambiguity because you're not getting the kind of signals you used to, with the IDFA, and Google's making big changes, and everything else like that. Babbel's had to embrace that ambiguity for years, and probably came into this post-ATT world a little more prepared.

What are some of the specific ... I know with TV, you could potentially do some temporal you know when the ad drops. Do you look at those kind of signals? Media mixed modeling, incrementality, those kind of things. What's the mix of how you try and model what is actually working?

Steven Meyers:

The reality is, even before all of the new regulations and data privacy laws, attribution was always messy.

David Barnard:

Yeah.

Steven Meyers:

Despite what people think. There's no perfect solution, and there actually probably never will be. We never really changed our model after those events. There was always a number of different signals that we look for. That's, I think, the number one thing to think about, is you can't just rely on one source of data or one model. We combine a number of different things, just to get closer to reality. That's all we're really trying to do, is we're trying to get slightly better than having nothing.

We are looking at, again, web clicks and where they're coming from, like your traditional digital marketing attribution. We do run incrementality tests. We do have some MMM models. We are looking at the how did you hear responses that all of our users are telling us where they came from. And then for channels like TV, you can look at what's called spike attribution, when you actually look at when all of your spots, your TV spots ran, and how much that drove up traffic or downloads to your website. You can actually measure the incrementality on that for every single TV spot that you run. You can start optimizing for different channels, and different networks, and different times of day. A lot of the same things that you would do with digital marketing channels.

Yeah. When it comes to attribution, I think the number one thing is look at different models and different sources of data, and try to find the best truth within that.

David Barnard:

Right. What does that look like on the back end, as far as MMP and data modeling? How do you make sense of it on a tactical level?

Steven Meyers:

Yeah. You do need some level of data sophistication, but there are a lot of platforms out there that help you. At Babbel, we have both an app and a website, so we're getting web traffic. You could use Google Analytics to track web events. We use Adjust on the mobile side. And all that stuff comes with click data, attribution data, campaign data, everything associated with that. Yeah. We aggregate all that data together.

We do have a wonderful data team that will help make sense of a lot of this. We've come up with our proprietary model that we feel like is the closest thing.

David Barnard:

Yeah.

Steven Meyers:

One of the hardest parts is bringing all the data together. The fortunate thing is, yeah, there's a bunch of tools out there that can help you do that.

David Barnard:

Yeah. Then for apps that don't have a whole data team and a sophisticated model, looking at blended stats can be a really powerful thing. How much should we spend last week? And then track that cohort over time. As you grow, you can become more and more sophisticated. But you can see in the data how much should we spend that week, and then how did that cohort perform. The model doesn't have to always be super sophisticated, especially as you're ramping up spend. As you're spending less, you don't have to be as sophisticated. Once you get to the size of a Babbel, spending quite a bit of money on advertising, then you do want to be more and more sophisticated about it. But you typically would have the resources to do that.

Steven Meyers:

Yeah. I think that it's a good point. One of the amazing things that Google brought to the table when it came about is that it made advertising more accessible. You didn't need a massive budget to get going. I have found that offline is headed in that direction a lot more over the last couple years, where it doesn't take a massive upfront investment to get started. You can start small.

David Barnard:

Yeah.

Steven Meyers:

Babbel started small, and our model has gotten much, much better over the years.

David Barnard:

Yeah.

Steven Meyers:

Yeah. You can really start anywhere, I think.

David Barnard:

Cool. A couple of other things I wanted to talk to you about. One was this idea of customer-centric metrics. Babbel is a hard paywall app. As you and I have talked about, that being a hard paywall forces a different reality on the business. I wanted to start with I thought you had some really insightful ideas around things to watch out for for freemium. Subscription is almost synonymous at this point with the freemium model, but that comes with a lot of drawbacks.

From the outside in, and not everybody here in the room will have the opportunity to switch your app to a hard paywall, and that's maybe not the right answer for most apps. But understanding, from the other side of the table, somebody who does have a hard paywall, understanding some of the pitfalls that you see in the freemium model I think would be really helpful for folks. Then for some folks, maybe a hard paywall is the right answer.

Steven Meyers:

I think that's a really interesting question. I do love this topic because we have gone the non-traditional way of having a hard paywall. We do offer a free lesson in our app, so you can experience it a little bit, but there's really not that much you can do. There's a different way that we've approached it. But I will start off by saying freemium is not the only option for an app. It really might not work for everyone. You look at a few companies that have done it really well and you think that that applies for all apps.

David Barnard:

Yeah.

Steven Meyers:

I really don't think it does.

David Barnard:

Yeah.

Steven Meyers:

For me, personally, I don't know if I've ever purchased an app through a free experience that I wasn't already going to purchase anyway. It's really difficult to get someone in and help them make a decision that they wouldn't have otherwise done. Especially when you just dropped them into a product, into a less optimized product, the suboptimal version of what that product's going to be.

Maybe we can do a quick metaphor right now. Okay, we're at the App Promotion Summit. Maybe you're deciding if you want to come to this event. Is it worth it for you? You're an app developer, you have a new app, and you want to learn about the app marketplace. How would you decide whether you want to come to the App Promotion Summit? Let's say you went and you Googled, "app promotion conferences." App Summit came up. You came to the website. They were like, "Hey, come on in for free. You can watch via video the last conference that we have." You sit there, and you go around, and you maybe don't have your watch and you can't hear that well. You don't know which talk to listen to. You're like, "Okay, that was cool. I didn't get much value out of that," and you leave.

The first thing is app promotion has no way of understanding why that didn't really work for that experience. I find that that's the experience that a lot of people get with freemium. The way that we've taken it with Babbel ... And I think with any sales process, what's the number one thing that a salesperson, or sales advice that someone gives to other salespeople? It's focus on the discovery stage when you're selling something to someone. What does the customer need? Find out what their needs are, where their gaps are, and figure out how you can fill them.

That's the approach that we've taken at Babbel, where instead of just dumping into our product and letting you figure it out, we try to discover as much as we possibly can upfront. That's through a registration and signup experience that ask you a bunch of questions, and tries to figure out as much as we possibly can about you upfront. In that process, we're able to talk about ourselves, and tell you how we fit into what your needs are. Then by the time you get to the end of that experience, you feel already compelled to buy. You don't need to actually test the app on your own.

That's the approach we've taken. I think there's maybe two trains of thought on this topic. It's worth experimenting with your app to figure out what works best for you guys.

David Barnard:

I think one of the most impactful things for freemium apps is to understand what the freemium base is doing for you. Are they seeing ads? Are they sharing the app? Is there a reason for them to exist that provides business value? If not, that's maybe when you explore a hard paywall.

One of the things you were talking about too, was how freemium can lead to this delusion, looking at vanity metrics, versus really understanding the business. That some of these metrics that you were talking about, customer-centric metrics, like really understanding the customer and the value they're deriving from the app, versus these big MAU numbers but they're never going to pay. A certain number of people are never going to pay. Babbel only deals with the people who are actually paying, so you understand your customer-base in a really different way. Can you talk to that for a second?

Steven Meyers:

It's probably pretty funny, but I couldn't tell you what our daily active user number is. Or our monthly active user number. Because it's not what drives our growth model.

David Barnard:

No.

Steven Meyers:

We are a mission-driven company. We are here to help people learning languages, and that's what our customers' goals are, too. They customer's goal is not to open an app every single day.

David Barnard:

Right.

Steven Meyers:

Or every single money. Maybe that's what helps them get to their goal. But we are very focused on helping our users achieve their goal, which is to learn a language. At Babbel, we do have a proprietary metric that we optimize for. It's called Learner's Success. We've invented it. I think it's worth every app and every company coming up with their own metrics. It's something that aligns with what your customers' actual objective is. If you're a company that's optimizing for a metric that's not in your customers' best interest, you're probably not going to end up in a really good place at the end of the day.

I found that a little bit with many apps, which is you just immediately assume it's daily active users, and monthly active users, and that's the number we need to optimize for. It's very easy to fall into that trap. But it might not be in the best interest of your customer, if you're looking at that. That's how we think about it.

David Barnard:

Yeah. How do you think about the impact of that on retention, and having money on the line, and the investment people make?

Steven Meyers:

Well, I think if you are meeting your customers' goals, then you're in a pretty good place to keep them around for a lot longer. Having those checkpoints with the customers so that they know that they're actually on track, that helps us. We're not sharing how many daily active users or how many times you've used the app with our users, because again, it's not what their objective is.

You mentioned having money on the line. Yeah. There is something to that when you're paying for an app already, that you're going to stick with it a little bit more because you're paying for it. There is a little bit of difference between a free app and a paid app. We see that a little bit. I think we definitely see the people that are committing to our most premium subscription offerings. They're sticking around for a lot longer, mostly because there's money on the line.

David Barnard:

Yeah.

Steven Meyers:

It drives that motivation. Money is a good driver of motivation. Yeah, that's a little bit of what we've seen.

David Barnard:

Awesome. Last topic, as we're wrapping up. I know Babbel's had the web product for a long time, and optimized for web for a long time. It's a really hot topic in the industry right now, of web to app, driving people to the web. I know a lot of your advertising goes web first. People really struggle to crack that flow. Any top tips for apps struggling to make web to app work?

Steven Meyers:

Yeah. I think this gets back into the original conversation around offline channels, and where they are, and where they come from. We've designed both in-app flow for our users, as well as a web flow, because we've found that different people go to different places. With our offline channels, it's interesting. If someone sees a TV ad, it's a 50/50 chance that they're going to visit you on your app or on the web. We can't figure out how to change that. It's hit or miss.

Yeah. We've optimized both for the app stores and the app experiences, as well for our web experience. There's honestly not a lot of difference between them. Most of the time, people are coming on their phones anyway. There's only a very slight difference between being on your phone and going through a website, and being on the phone and going through an app. I think the difference we have and why we optimize a lot for the web is you don't have that upfront download.

David Barnard:

Black box.

Steven Meyers:

Exactly. We have a lot better data on web. Just getting someone to download is a big step. To not have any touchpoints with your customer, I talked about the discovery stage. We do the discovery stage on web immediately. There's no commitment from the user at that point. All they've done is visited the website, and now we're talking to them through this quiz-like survey experience, and understanding what their needs are, collecting data on them as well. Whereas on the app experience, it takes a big hurdle for them to download the app, but they haven't had a conversation with you yet.

There's a few reasons why we want to optimize for web. It's we get better data, and we can have a deeper conversation and a better discoverability stage with them. But also, just because they're going there and we can't control that. Yeah, there is. If you are going to get into the offline space, you're going to want to design a web experience.

David Barnard:

Yeah, yeah. All right. Well, thank you so much for sharing all these great insights. If you're an app and haven't considered offline ads, or just being more creative about your marketing strategies, there's just so many ways to get people's attention. Think beyond those standard channels that everybody's talking about, because there just are so many opportunities to be more creative with marketing. Babbel's been making it work for a long time and doing some really creative stuff to get out of that little box.

Steven Meyers:

I will add, I'm not a traditional offline marketer. I think five years ago if you asked me that I'd be talking about offline marketing on a podcast or on stage, I would have laughed at you. I'm a digital marketer background.

David Barnard:

Right.

Steven Meyers:

It's not too late to get into this, you can learn. Yeah, it's definitely something I think every company should explore.

David Barnard:

Yeah. Anything else you wanted to share as we wrap up?

Steven Meyers:

Not too much. It's great to be here. Thanks for having me. If you guys are interested in learning a language, go download Babbel or go to our website. Or even just follow us, in terms of all the marketing and growth-related things that we're doing. Thanks.

David Barnard:

Thanks so much for listening. If you have a minute, please leave a review in your favorite podcast player. You can also stop by chat.subclub.com to join our private community.