Based in Bucharest, Wave Studio is a rapidly expanding mobile app developer. In 2022, the Financial Times recognized it as the fastest growing tech company in Romania. Since 2016, more than 185 million users have downloaded the company’s personalization apps, including its popular Wave Live Wallpaper 3D app.
With the growing popularity of its newest app, the company turned its attention to optimizing the monetization side of the business. It wanted to keep user acquisition costs in check while attracting users who were more likely to engage with their apps and ads. The final goal was to increase the lifetime value (LTV) for the average user.
Using Google products — Firebase Remote Config, AdMob Native Advanced ads, and target Return on Ad Spend (tROAS) for ad revenue — Wave Studio was about to achieve all its goals, and then some.
Balancing user acquisition costs and user lifetime value
Launched in 2014, Wave Studio is a mobile app developer and publisher on both Android and iOS. Focusing on the tools and personalization categories, its primary goal is to give consumers various options to customize and personalize the user interface of their mobile devices.
Founders Vlad Andries and Tiberiu Avramiuc started by releasing some simple theme apps for keyboard apps released by other studios. Realizing that their whole business model depended on other developers’ products, they launched Wave Keyboard, the first animated keyboard app on Android, in 2016. The following year they released Wave Live Wallpapers. By 2021, the studio was one of the top developers in Android’s personalization category.
“Moving from keyboards to wallpapers gave us new possibilities to create interesting and interactive user acquisition campaigns,” said Andries. Having a good acquisition strategy, we’ve realized that the only way to scale further was to optimize and improve monetization.”
Wave Studio’s business model is based on publishing apps and promoting them on paid media. It’s a hybrid model that’s heavily weighted toward ad revenue. About 90% of earnings are in-app ads (IAA), while the other 10% are in-app purchases (IAP).
Andries said the company was searching for a more cost effective and scalable approach to acquiring new users. On top of this goal, they worked to attract those users likely to contribute to higher ad revenue in the apps and help increase average user lifetime value.
Firebase Remote Config A/B testing to optimize ads monetization
Wave Studio’s first step was using Google Firebase Remote Config to run hundreds of A/B tests on everything from ad format to in-app placement to the number of impressions per user. Using Firebase, AdMob , and tROAS for ad revenue, the company was able to create a new model to scale user acquisition and maintain a healthy ad revenue income based on user LTV.
After running hundreds of A/B tests, we’ve managed to increase our apps’ users’ LTV by more than 250%,” said Andries.
The studio’s success came after testing different monetization scenarios and combining all types of ads formats. The introduction of Admob Native Advanced ads has been a game changer for Wave Studio. Andries said that more than 50% of the studio’s revenue currently comes from this format.
tROAS for ad revenue gives visibility to acquired users' LTV
Andries acknowledged that the biggest challenge app developers face is accurately calculating the LTV of users monetized with ads. Without visibility into how much a user spends on in-app purchases or generates by engaging with ads, Wave Studios lacked the data to optimize its CPI (cost per install) bids to acquire new users.
The Google team let him know that it was possible to track impression level revenue with Google tROAS. Andries said he’d been looking forward to that innovation for a long time.
With tROAS, you can treat IAA revenue as you treat IAP revenue,” he said. “You can attribute the revenue to an exact user over their lifetime in the app.”
Before implementing tROAS, Andries said that the studio’s user acquisition strategy was based on quantitative data, setting the same CPI for all users in the same geo, which significantly limited volume. But tROAS bidding turned out to be a game changer. Andries explained that because some individual users generate more revenue than the average user, they are worth paying more for. With tROAS, Wave Studio could target high-value users that previously were out of reach.
All of a sudden, you can concentrate less on the CPI that you are willing to pay and more on the ROI that the user can give you,” he said. “A user might cost $1.50 to acquire, but if that user generates $2, then you’re more than willing to pay for it.”
A good part of our success is related to Google products like AdMob and Firebase. Over the years they have constantly helped us steadily increase our revenue
Co-Founder, Wave Studio,
2 million new monthly installs and 30% increase in ad revenue
After Wave Studio implemented tROAS in September 2021, the results were immediately clear. By the first quarter of 2022, Andries said the company saw an increase of more than 30% in total ad revenue.
With tROAS, we’ve managed to acquire an additional 1.5 to 2 million new users while maintaining a healthy profitability,” he said.
He added that user acquisition campaigns based on a flat CPI are limited in terms of scalability. With tROAS, Wave Studio is scaling more quickly and generating more total ad revenue.
The Company’s current focus is on improving the in-app experience to boost user retention. For example, the company has created a new tool for users to design their own wallpapers. It’s also trying to attract well-known artists to create new designs.
“We want to increase long-term engagement in the app,” said Andries. “We’re looking into creating a small-scale social network around wallpapers. We don’t want to be just a directory for live wallpapers, but more of an integrated way for users to consume and share digital art.”