Apps are looking for marketing cloud-like capabilities. But they’re not going, or can’t afford, to spend the kind of money marketers have historically dropped on a traditional marketing cloud integration.
Leanplum, which on Tuesday announced its $29 million Series C led by Canaan Partners with participation from Kleiner Perkins and Shasta Ventures, is positioning itself as a mobile marketing cloud – something mobile-centric companies like TextNow can use to orchestrate their cross-channel marketing efforts with mobile at the core.
“The traditional marketing clouds are billion-dollar companies in this space, but they’re focused on traditional, more desktop interactions,” said Leanplum CEO and co-founder Momchil Kyurkchiev. “For them, mobile is just another channel, but for us it’s foundational.”
Unlike other freemium apps, every user Leanplum client TextNow acquires costs the messaging app money, because each lapsed or disengaged user is an immediate financial drain on the company.
“We really need to be diligent about how we manage our user engagement, both for organic users and for users that we pay to acquire,” said Mark Braatz, TextNow’s GM and VP of growth.
TextNow is a free mobile messaging and calling app with more than 6 million monthly active users cut from a similar conceptual cloth as WhatsApp, Viber and Skype, et al. But unlike other messaging apps in the space, users are automatically assigned a dedicated phone number when they sign up for the service, numbers that TextNow has to subsidize.
“So we really need to make sure that we’re ROI positive on every one of our users,” Braatz said.
It’s why TextNow is in the process of transitioning away from using multiple vendors for analytics, testing and marketing, including Flurry, Mixpanel and Optimizely, in favor of a single marketing suite from Leanplum.
“Bringing it together in a centralized platform is a huge efficiency for us because we can get a single view of the customer across iOS, Android and the web, and we don’t have to guess about a test or run multiple tests across different platforms,” Braatz said.
Between 85% and 95% of TextNow’s revenue is ad-generated – in-app purchases like international call credit comprise most of the rest – which makes it critical for TextNow to acquire users who stick around.
TextNow uses Leanplum to run its A/B testing program in real time so it doesn’t have to push out a software update every time it wants to do an experiment, a process that used to be time-consuming and manual, Braatz said. TextNow also uses the platform to segment users, send email and push notifications, keep track of the results, rinse and repeat.
For example, TextNow noticed that a group of users that was abusing the service and using data in excess of whatever their plan type allowed.
“After identifying them, we were able to message them and migrate them to a higher data cap plan,” Braatz said. “There was no mechanism to systematically message and interact with these people before – it used to be a one-off communication. But now it can be part of a life cycle campaign and we can use analytics to see what happens post-click and post-engagement.”
Messaging, analytics and testing should happen under one roof for apps, which need CRM capabilities as much as any larger or more conventional brands.
“Marketing platforms require a two-layer approach – the foundational layer is data, but on top on that marketers need robust platforms around messaging, including push, in-app messaging and email,” said Leanplum’s Kyurkchiev. “We’re trying to reframe what a marketing cloud means, but with mobile at the center.”
In addition to mobile-first customers like TextNow, Tinder and Lyft, Leanplum’s client roster also includes a number of traditional players like Tesco that are doubling down on their apps, but their needs are essentially the same: user growth, engagement and revenue, Kyurkchiev said.
Leanplum intends to use its new round, which brings the company’s total funding to just over $46 million since 2012, to focus on engineering and product development, with plans to double its headcount of 80 by the end of next year.
VCs are definitely paying attention to the mobile marketing automation space. In May, Appboy brought in $20 million, while last year alone Leanplum raised its $11.6 million Series B, Kahuna raised $45 million, Swrve raised $30 million, Localytics raised $35 million and Urban Airship raised $21 million.
