Mitigating Marketing Risk when Scaling

 

Intro: Welcome to Apptivate, a podcast for mobile marketers brought to you by Remerge. Take a short break from your screen and listen to what’s working in mobile marketing, and what’s not straight from the people who are doing it now. Are you ready? Let’s get started.

Tommy: Hey everyone, you’re tuned in to another episode of the Apptivate podcast. I’m Tommy as always your host. Today I have a very special guest in the line. Someone who I’ve actually just had the pleasure of meeting today as well, but someone with quite a bit of experience in the space, in the mobile space specifically. Today we have Andre Kempe Kempe, who is the founder at Admiral Media on the line with us. Andre Kempe, thank you so much for joining. How are you?

Andre Kempe: Great, fantastic. Thanks for having me Tommy.

Tommy: How’s your Monday going so far?

Andre Kempe: Well, stressful as always, but as Mondays are, you’ve gotta pull up a lot of reporting and answer a lot of emails and questions and applications. There’s a lot to do on Mondays. 

Tommy: Yes. I hear that. And you’re calling in from Barcelona or near Barcelona area?

Andre Kempe: Near Barcelona. Yeah, I’m here in Spain. I’m living since two years now and I moved out of Barcelona after just eight months or something. Reason why it was extremely noisy. And I actually wanted to move into some more, let’s say beachy, natural place. I’m living in a small town outside of Barcelona now, like one hour outside.

Tommy: And do you work remote there? 

Andre Kempe: Well, I have an office here. So when you say remote, I started the company here, basically.

Tommy: I guess my term of remote is, is there anyone else there with you or you’re running a one man show in your office?

Andre Kempe: No, it’s more team, I mean, I founded Admiral Media just in June, so we are now three people, four, the fourth just joined and fifth is on hiring.

Tommy: In June you founded it. So this is very recent. Can you tell me, is this your first foray into kind of starting your own business?

Andre Kempe: Hard to explain. So let’s say I was working as a freelancer for a long time. Long ago, then I became a regular employee for a long time again and later on, I became a freelancer again. And then I launched this company basically.

Tommy: So you went from company to freelance, company to freelance?

Andre Kempe: Yeah, exactly. Since freelance is only scalable so much, you only have like a few hours a day. I thought, okay, maybe it makes sense to start real company and start hiring people who can support me and scale the business that I’m already having to the next level. This was basically the reason why I launched the company.

Tommy: Was it scary and daunting to start your own company? Or did you feel like you knew what you had to do?

Andre Kempe: No. Scary. Not at all because I just continued doing what I did. I just added another pair of hands. So this wasn’t really scary. As an agency, you don’t really have a big investment to do or something like that. So there was no reason to be scared actually. 

Tommy: But now the difference is where you’re freelancing. You’re kind of like your own business. You Andre Kempe own the business of being Andre Kempe the freelancer. Now it’s Andre Kempe, but you are also now responsible, not responsible, but you have some degree of responsibility for those people you bring on, correct?

Andre Kempe: Yes, absolutely. I mean, this is a big burden actually, and I’m glad that I had a chance to learn how this works and hiring people, firing people, managing people. This was quite something to learn back in the days when I was working for other companies. And I’m happy that I have this experience already instead of just making it now, that’s definitely an advantage. 

Tommy: It sounds like obviously you did some freelancing work, but in terms of the companies you worked at and your experience in the app space prior to starting Admiral Media, what does that kind of look like?

Andre Kempe: You mean the work that I did before? Like how I started in the business?

Tommy: Yeah, yeah. Like what are some brands you maybe worked for? What were you doing there, et cetera?

Andre Kempe: I started when ringtones were a thing, so that’s already some time ago, but when I started in the app industry, this was when in Berlin, there was a company called TradeMob, they got acquired later on. I started in that company when they were four people. And this was my first experience with app marketing itself. I was trying to sell app development before that, but this never worked out. And then I had the chance to get into this early-stage startup. And they scaled to, I don’t know, it was 120 people or something within just one or two years. So this was an insane growth that they had. And I was part of that luckily, and I definitely learned a lot from that. And many people did in that company in those days. Then I went to a big dating app called Lovoo for example, after Lovoo I switched over to an eCommerce business. It’s a famous brand Zalando. 

They launched a small app inside Zalando. So I was responsible for that smaller app, that never succeeded, unfortunately. And then I became the CMO of a car sharing in Berlin, Free-to-move, which was acquired by PSA, which is the Peugeot-Citroen conglomerate. And then I always wanted to work abroad and get a little bit more sunshine. And this actually brought me to Cape Town and I signed up for the leading e-commerce business down there and got the job. And this went out like applying for the visa for one year, but never succeeded.

Tommy: Sorry to hear that.

Andre Kempe: I mean, they took one year to find this out, but the reason was this skillset is available in that country. Apparently this wasn’t really true because the company was already looking for that skillset for half a year and didn’t succeed. But anyways, I stopped in Barcelona then to get the sunshine that I deserved. And yeah, this is how it all went basically.

Tommy: Awesome. You must be a good friend of a guest we had on our podcast, Lorenzo Rossi, right?

Andre Kempe: Yes, definitely. Who doesn’t know Lorenzo? Who’s not a friend of Lorenzo?

Tommy: Well, here’s the thing. I was listening to your history. And I was like, man, this sounds so familiar because you said, you were at Zalando working on a smaller app within it. You were at Lavu free to move. And I was like, man, I feel like I was starting to question, have I met Andre Kempe before? And then I was like, no, no, this is Lorenzo. Like you guys. So you guys work together at all these companies, it sounds like.

Andre Kempe:  Absolutely. Yes.

Tommy: That’s hilarious. Oh man partners in crime. I love it.

Andre Kempe: Absolutely. Was a good time.

Tommy: Yeah, it sounds like it was awesome, man. Well, thanks for the background. That’s super interesting. And it sounds like you worked for a good variety of brands. You worked in the dating space, you worked in the shopping space, you worked in the transportation, I guess you could say space, you worked in the ringtone space and now you can take all of that and use that with the partners that you represent, Admiral Media. Now, do you guys at Admiral focus on a particular vertical, a particular kind of brand or is it really just working with performance app marketers wherever they might come from?

Andre Kempe: We have a very broad setup. What we clearly do not focus on is games. There are agencies out there that are much smarter and much more experience in the gaming space, for example. But otherwise we basically take everything we can get. So that’s the only limitation that I set myself at the moment and I really don’t want to touch that space.

Tommy: You don’t want to at all, is it because you don’t like it or because you don’t have the expertise?

Andre Kempe: I clearly do not have the expertise. So maybe in the future, if I hire someone who’s coming from that space maybe and so great in selling this tool to potential clients and helping them to grow, then never say no, but the current setup is not supporting to conquer that space.

Tommy: It totally makes sense. And Admiral Media, I believe I saw somewhere, you guys were nominated as best app marketing agency in 2020, right at APS in Berlin?

Andre Kempe: Yes, that’s true. 

Tommy: Congratulations.

Andre Kempe: Yeah. Thank you very much. Well, I mean just the nomination. So unfortunately we couldn’t win but let’s say, found it in June and then getting the nomination was a big win already, that’s very clear. 

Tommy: No, that’s fantastic. What would you attribute to being recognized like that? Do you think it’s just, you guys have done awesome work with some specific brands?

Andre Kempe: Of course, I mean what else could I say? To be fair, it was a really great growth campaign for a very famous soccer news app. And they were coming to me and asking like, “Hey, can you help us setting up campaigns? And how does it all work? Can we improve what we’re doing already? We’re spending quite decent amount of money on all the channels already, but don’t feel comfortable with it.” And this was a very great situation for us and Admiral Media to take over and show them how it really works. And we were able to scale that really quickly. And luckily we were allowed to use this as a case study, which we could present to the jury of promotion summit Berlin. Yeah. It’s got us the nomination.

Tommy: It’s pretty fantastic. And I hope next year you’re not only nominated, but you actually win it. It seems like you’re on the path to do that. It seems like if you’re already getting nominated within six months of starting the business or whatever, six, nine months of starting the business, that’s quite the accolade in and of itself. So you spoke about this soccer news app that started to scale some of their campaigns and you presented it to APS in Berlin and everything. But you guys are a three person team, right. And you’re working with, I’d imagine more than one advertiser, even if it was just two or three, you’re working with probably about as many advertisers, if not more advertisers than you are people within your business itself. And each of these advertisers has the aspiration and hope of scaling a campaign. 

So the question naturally comes up. It sounds like you might have limited resources. And how do you go about managing those resources? So the question at the end of the day is, if someone comes and wants to scale campaign with you, how do you go about mitigating the risk that might be associated with scaling a campaign in general? And then how do you further go about mitigating the risk when you don’t have a team of 20, 30 people looking at accounts every day, you have a more limited resource? How do you kinda make sure that you’re not blowing through budgets really quick and honestly just presenting bad results to your partners?

Andre Kempe: I think the first mistake many companies are doing is having in their mind very often. And then just execute on that, is that as soon as they discover, Hey, there’s a new requisition channel and we put like $20,000 in there, we need another pair of doing that. And then if we double that budget because it works, we need another pair of hands because it’s three more countries or something like that, but that’s simply not true. You do not need a team of 25 people to run advertising campaigns that exceeds a million per month or something like that. You don’t need that. For example, scaling budget on Facebook, as long as the business itself works out, that doesn’t require 10 people if you just want to increase the daily spend or something. It doesn’t matter if you spend $200 or $2000 a day on a campaign, you do not need two more people to manage that.

Otherwise you’re doing something entirely wrong. It’s a little bit different if you have a client that for example, we are currently in exactly that situation that has such great numbers, such great economics of the app itself. Like the product just works. I haven’t seen this very often and they cannot stop scaling. It’s really insane. It’s like doubling the budget every day because the revenue just pours in as we scale. So for that particular client, it really works out. And we are in exactly that situation that we need more helping hands to manage all this, but not only because we are spending more and more on Facebook and have more and more countries to manage, it’s also because this particular product requires so much creative testing and creative changes, but also the client wants to scale on every possible channel that is out there and they are pushing us in every corner, like on every possible channel that we can find from, the classics like Facebook, Google, Apple Search, but also we are running now on everything else, Pinterest, Outbrain, Tabula, TikTok, the next one is Reddit, there’s probably some programmatic being tested. 

Podcast is something in the discussion. Now it’s getting crazy. Luckily for us, we are so far able to manage this in some way, but it definitely requires a pair of helping hands at some point to what you mentioned, like mitigate risk. Because at some point you lose control over all those channels. And then all of a sudden you don’t look at a particular channel for three days because if you’re comfortable, but within those three days, something went wrong and then obviously you spend way too much money on something that you shouldn’t.

Tommy: I want to back up for a second. So you talked about Facebook. And it sounds like Facebook as built a tool that is so intuitive to use in some regards that it doesn’t require more and more hands on deck as you scale. Is there a point in which looking at Facebook for example, where you’re spending so much where it would require another set of hands, or do you think that Facebook by itself, one pair of hands is all you’ll ever need?

This really depends. Depends on the app itself, depends on the creative requirements that you have. For example, I’m not an expert in games, but in games you need to test a lot with playable, for example, and test a lot with video ads for example. So that’s all good. And you can upload that and test and analyze that. But if you have an app that advertises something that is, let’s say gray area of going into the direction of gambling, as an example, then it becomes difficult because the channels and not only Facebook, but Google and everyone else is blocking those ads very quickly. And it happens that you have to upload the same creative and different variations six times a day to get the approval so the ad can run. And only doing that requires another pair of helping hands just because you get blocked so often that you have to reupload the same over and over again, this is just a stupid example.

Tommy: It’s a good example.

Andre Kempe: You cannot automatize this. You need to test a different wording, take out the emoji here, take another headline. It’s really difficult with some apps.

Tommy: Would it be safe to say, potentially like a summation for a lot of what you said, so it’s all great content, that part of how you mitigate risk is just by asserting the fact that you actually don’t need as many people as a lot of companies might hire to manage user acquisition campaigns, at least along traditional channels. But once you start scaling up to a certain degree and more importantly, once you start testing new creative formats, new creative iterations, and then new networks and channels and social platforms and podcasts and whatever, then you might need to start hiring more people to mitigate that risk. But as far as managing the traditional platforms, you don’t need a ton of hands.

Andre Kempe: That’s absolutely right. I mean, look at Google, for example. I mean app campaigns, how many hands do you really need to manage that? That’s not so difficult. Everything runs from its own. It gets a little bit more complicated. It still is a little bit more complicated with Facebook, but they also announce automated app ads, which goes in the same direction as Google. Let’s see how this really turns out. But what is getting really difficult, where we really need another pair of helping hands is something which has terrible dashboards. I’m not sure if it’s good to name them, but there are the other channels that have terrible dashboards.

Tommy: You can if you want. I don’t care. I can’t tell you what to say or what not to say.

Andre Kempe: I don’t want my accounts blocked again. And then you cannot bulk edit on some platforms. That’s so terrible. Like you have like hundreds of campaigns live and you cannot edit bits in bulk on them. You have to find ways within excel, download the excels, are terrible. You have to reupload. It’s insane what process they create just to manage a few campaigns that are not even on a million dollar spent or something like that.

Tommy: I’m getting anxiety, just hearing you talk about it. So yeah, I can imagine. That sort of stuff would take up a ton of time and it’s not necessarily worth it.

Andre Kempe: Yeah, exactly. Yeah.

Tommy: One of the things that you brought up was around the automation, with something like Google. And the question for you, do you prefer a world in which you have less control, like a Google world where you basically say, Hey, here’s a goal and here’s money and obviously simplifying it. But here’s a goal that I have, a CPA target, a CPI target, whatever the case may be. Here’s some money, please go hit my goal and they go and hit it however they can. Do you prefer that world or a world in which you can go in and manage your campaign yourself in more of a self-service style?

Andre Kempe: Well, I think every growth marketer is on my page. When I say I hate being black-boxed. I think the entire industry is on my side. Nobody likes that. And we are currently in a situation where it’s getting worse and worse. And the result is that we have absolutely no clue where our money is going and we just have to take what they give us. And that’s something that cannot be healthy for the industry at the end of the day. That’s what I believe at least.

Tommy: But at some point there’s a give and take. Because you guys want to scale campaigns really high. And if Google says, Hey, I can do that, but we’re not going to share that much with you. Then it’s potentially worthwhile to have that black box or maybe not.

Andre Kempe: I would say no. I mean, with Google, it’s a very specific case because they have the monopole about inventory that nobody else has. And they leverage that. So for example Admiral Media we are very experienced in launching new apps, for example. So the clients that we get are less of already multimillion downloaded apps. I mean, we have a few of them, but the general case is that it’s very fresh apps. And with Google, we very often see, for example the more we grow advertising in general with the app, the more successful the Google app campaigns get. And obviously they’re selling pitch is, Hey because we collect so much more data and we’re able to do the machine learning thing here, but I actually believe it’s just because the brand just gets more and more popular, gets into the higher ranking suggestions in the play store. More people are searching for the particular brand and this gets them the results. But you can’t see that. 

This is something that I in particular hate about Google and how they use their monopoly. I believe it goes in the same direction when all the others try to sell us exactly that situation. When Apple Search Ads would take out all the bidding on keywords and just do the automated ads for example, but you would quickly spend all your money on brand terms and you wouldn’t see that and just pay for what you would get anyways.

Tommy: Yeah. It would become non-incremental. So do you think that’s what some of these tools are doing ultimately, is taking away control in order to take, or in order to run less incremental campaigns that are easy for them to show success in a black box scenario?

Andre Kempe: I think the current situation supports that yes, they will do that, but the more competition grows out there, maybe they’re coming back with more controls. At least that’s what I’m hoping for. And look at TikTok, for example, and they’ve launched a new advertising opportunity here and grow massively in every country and their dashboard offers the full flexibility still. And the more flexibility you have, the more agencies and the more growth marketers will try to spend their money on those channels rather than the fully automated stuff where they have no control about what’s happening.

Tommy: I’m happy you brought up TikTok. No one has spoken about that platform actually, or at least in any extensive way on this channel yet. So do you have experience testing on that platform?

Andre Kempe: It’s still a very new channel. So experience is very limited, but yeah, we are running a few things there.

Tommy: Are you bullish about its future or do you think it’s going to be successful?

Andre Kempe: Yes, absolutely. I don’t see another competitor having a product that looks the same, feels the same, creates the same content. I mean, there was a bite launched just recently, but I don’t see them getting the traction yet. Let’s see what next year is. But right now I think TikTok is a very clear leader and I see myself, I mean, I’m always almost 40, but I see myself scrolling through TikTok more often than through Reddit nowadays or through, I don’t use Instagram at all, for example, because it’s just not funny. It’s not entertaining for me. I really don’t like it. And TikTok is like a comedy show and I really like this bite size snacks of content that I get there. And it’s actually funny. I really like dog and cat content. The more you like this kind of content on TikTok, the more you get. And it’s amazing. I love it.

Tommy: It sounds like you’re a brand ambassador of a TikTok now.

Andre Kempe: They should pay me. 

Tommy: I know exactly. Well, let me ask you this. You brought up a point there, as these emerging channels grow, it forces channels like Facebook and Google to potentially give back some more controlled view. I guess then in your opinion, what happens first or what’s more likely to happen? Is it more likely that TikTok creates a scenario where there is that competition and these other people have to give you more control? Or is it more likely that TikTok as they grow, takes more control away from you and becomes more of an automated platform like a Google or a Facebook? 

Andre Kempe: Unfortunately I think it will be the last one. They would take away the control from us. 

Tommy: And the trade off at the end of the day is you as the founder of an agency and maybe I’m wrong. But it sounds like it does save you the ability to put less time into managing campaigns, which means in turn that you don’t have to hire as many people perhaps. So it does give you some efficiencies that you wouldn’t otherwise have, but the trade-off then is you on behalf of a brand are putting a lot of money somewhere where you don’t have a ton of sense of clarity as to where it’s going, right?

Andre Kempe: Yeah, absolutely. But that’s managed expectations with clients. You’ve gotta tell them, Hey, this is the potential, but here’s also some risk it’s like when you go to dentist.

Tommy: It can be painful, but it looks good at the end. At least you hope so. Otherwise you might have to get a new dentist. In any case that’s super interesting. Outside of TikTok. Are there any other channels that you see as cool emerging sources for you guys?

Andre Kempe: I mean, at the moment, I’m quite surprised how good Pinterest works for us on some apps. So this was kind of interesting to see and to scale to some extent. So it certainly depends on which countries you target and which kind of app you promote. But at the moment, I was a little bit surprised by that channel actually.

Tommy: Are there certain kinds of apps that work better on Pinterest?

Andre Kempe: My feeling is that everything that is more female-oriented works on Pinterest, but I might be wrong with that. I haven’t tested too many apps yet because many clients believe, Hey, this is not our audience. It’s too young. It’s too old, whatever. There’s always a reason why some clients do not want to test channels, Snapchat, for example, is one of those very specific channels where our clients are rather hesitant because they very young audience. I mean, it takes time to find the right clients where the apps fit.

Tommy: Awesome Pinterest. And would you argue that these channels are doing a good job? These emerging channels are doing a good job of building out dashboards that give you a lot of control. You don’t have to answer specific.

Andre Kempe: Some of them.

Tommy: OK, cool we’ll leave it at that. I mean, honestly, it’s super enlightening for me to hear. I’ve never spoken about TikTok before. I think the relationship that, as you point out the emerging channels might have on some of the more established traditional channels will be really interesting. Especially as money shifts from one to another. And you made a really interesting point that for a lot of people, TikTok is more valuable in their mobile experiences than Instagram is. And if that continues, then Facebook could potentially have to make some changes, which would be interesting to say. But the very least Andre Kempe it’s been really awesome having you today. It’s been great learning about Admiral Media. Again for our listeners. This is Andre Kempe Kempe, his agency Admiral Media got nominated as a top app marketing agency in 2020 at APS Berlin. This is within nine months of having launched the company. So it’s an amazing accolade and Andre Kempe it’s been an absolute pleasure having you online today.

Andre Kempe: Thanks for having me. I wanted to mention that I’m not only running Admiral Media, but the name says it. I’m also the Admiral of the GrowBoat, which is a small event, which I started here in Barcelona, but we set sail in San Francisco last year as well. Let’s see if another city comes up this year, but we’re sailing at the 21st of May this year again, just one day before the famous Applause event. And I’m happy to say that we actually got Remerge as a sponsor. I’m really happy to see you there. And that’s all I wanted to say.

Tommy: It’s GrowBoat and can you tell us really quick, what is the event focused on? And what’s the nature of it?

Andre Kempe: I started GrowBoat when I moved to Barcelona, I didn’t know anyone in that city from the local community in the app marketing space or app development space. And I was living in Berlin before. But in Berlin I was going an event every week. It’s like insane how many events you can go and grow your network in that space. And Barcelona had nothing, just the Applause event, which happens once a year and that’s it. The MWC, I don’t count as an event per se. So I thought I’d create my own one and what is cool sailing on a boat. So I launched this event, which is three hours sailing on a Catamaran and I invite 25 people to sail with me. And it’s a plane social networking event, no presentations, no pitches, no sales people. And yeah, three hours of sailing. After that, we have dinner and that’s it.

Tommy: That sounds awesome.

Andre Kempe: It’s awesome.

Tommy: No sales people means I can’t step foot on board. Otherwise you’ll cast me out to sea, which would suck. For those who are interested in learning more, what’s the website where they can find more information? 

Andre Kempe: growboat.io

Tommy: growboat.io, Awesome Andre Kempe. Well, thank you again so much for joining us today. We appreciate it. And I hope to have you on again in your future. And we can talk about some of your continuous success at Admiral Media and the events at GrowBoat.

Andre Kempe: Cool. Thank you very much, Tommy. 

Outro: Thanks for taking a break with us on listening to our weekly episode of Apptivate by Remerge. If you enjoyed what you heard, leave us a five star review on iTunes and tell your friends about the podcast. The more people you tell, the further we can spread these awesome mobile marketing insights. See you next week.

 

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