Organic vs. Paid Traffic Apps: What Investors Need to Know

The source of an app's user base is perhaps the single most important factor in determining its value and risk profile. There is a fundamental difference between apps that acquire users through organic discovery and those that rely on paid advertising.

Organic Traffic Apps ("Digital Rent")

Apps that derive their users primarily from App Store search (ASO), word of mouth, editorial features, or viral content represent what some investors call "digital rent" — a recurring income stream from an asset that has proven its viability over time without ongoing marketing spend.

Key characteristics:

• Revenue continues even with all marketing turned off
• Subscriber decay is gradual and highly predictable
• Minimal ongoing costs (no ad spend)
• Higher valuations (18–24x monthly revenue)
• Attractive to institutional buyers and U.S.-based funds

Paid Traffic Apps

Apps where the current MRR is driven primarily by active advertising campaigns (Facebook Ads, TikTok, Google UAC) are fundamentally different investments. The revenue is real, but it's dependent on continued ad spend.

Key characteristics:

• Revenue drops significantly when marketing stops
• Requires ongoing expertise in paid user acquisition
• Subscriber cohorts from paid campaigns typically churn faster
• Lower valuations (6–14x monthly revenue)
• Better suited for experienced marketers than passive investors

The Hold-and-Resell Strategy

One sophisticated approach involves purchasing apps that recently ran marketing at a lower multiplier (e.g., 12 months of revenue), then "holding" them without additional marketing for 12–18 months. As time passes without marketing and the subscriber base proves stable, the app becomes increasingly attractive to premium buyers. It can then be resold at a higher multiplier (e.g., 18–24 months of revenue) to institutional funds that require longer no-marketing windows.