📗 Acquiring 23 million users with Facebook ads

📗 How Blinkist profitably acquired 23 million users with Facebook ads

What is Blinkist?

A subscription service that summarizes books into 15-minute "Blinks.”

Company figures

• Used by more than 23 million people^[3]

• Raised more than $35 million in VC funding^[3]

• Estimated annual revenue of $40 million^[4]

Pricing strategy

• $15.99 USD per month with no trial^[5]

• $99.99 USD per year with 7-day free trial^[5]

A few advertising insights

• Lookalike audiences (LALs) worked once Blinkist had 100-500+ paying customers^[1]

• Most people use FB on the go and on mobile, which matches Blinkist’s value proposition of quick book summaries^[1]

• Took them 9 months to crack Taboola & Outbrain, which demonstrates their commitment to “crack” new growth channels^[1]

The key to Blinkist’s Facebook ad growth

Sustainable customer growth came down to a key metric, which for them was CAC:LTV ratio^[2] . They determined that 1:3 was the target.

In other words, they could be profitable and continue dumping money into Facebook ads as long as their customer acquisition cost (CAC) was 1/3 the price of their customer lifetime value (LTV).

Blinkist’s unit economics*

*We don’t have all the facts so we’re making assumptions for edcuational purposes.

• $333.30-$499.95 LTV

• 20-30% churn rate (annual plan)

• 5-10% churn rate (monthly plan)

• $100-$170 CAC

Why annual plans are so important

Annual plans give you 12-months of revenue up front, which reduces cashflow constraints. For example, a $99.99 annual plan provides an instant payback period if the CAC is $100.

In other words, you could spend $100, earn that $100 back when a new customer signs up, then reinvest that $100 again to acquire another customer.

The payback period increases to 6 months with a $15.99 monthly plan. This means a business must invest new money if it wants to continue acquiring customers before the initial $100 is paid back.

Let’s look at their ads 👇