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Is Your Campaign Budget Strategy Hurting Your ROAS?

Hyemin Kim

November 4, 2022

Now more than ever, performance marketers want to see tangible business outcomes for their ad spend. How many new app installations did an ad generate? How many users took a desired action?

There’s an easy but often overlooked way to help drive your return on ad spend (ROAS): reconsider your pacing schedule. Let’s dive into how you can do just that.

Reconsider How You Allocate Your Ad Budget

Marketers are keen to ensure that their budgets are spent completely, and for good reasons: you need consumers to download your apps and interact with your brand. The sooner those new installations occur, the faster you can grow your business.

Most marketers allocate their ad spend on a daily or hourly schedule. But is this a smart move?

Since we introduced Moloco Cloud DSP, our data scientists have monitored the results of every campaign and our analysis shows that this approach is unnecessarily rigid. When one looks at the data, we see that the daily budget requires the entire allocation to be spent, often paying higher CPMs to meet pacing requirements, even when the business outcomes are lower.

What would happen if a DSP could meet your pacing requirements and eliminate that rigidity simultaneously? It’s a leading question because we know the answer: you’d get more installations and better ROAS. We’ve seen the data. 

Users Explore Brands and Install Apps on their Own Schedule

Predicting when users are most likely to install apps is not magic, it’s data science. And it comes as no great surprise that the highest number of installations occur when people have more time on their hands, namely evenings and weekends. For instance, installs on iOS jump 25% on weekends over weekdays and 6% on Android.

Most marketers miss this opportunity because too much of their budget is tied up in daily spend requirements. By the time the weekend comes along, there’s less budget for targeting consumers when they’re most active and open to new apps.

Of course, media agency account teams prefer to spend their clients’ budgets during business hours so that they can monitor it, but with modern machine learning, it’s not necessary to “babysit” budgets anymore.

We wanted to address this age-old disconnect between app engagement and advertising spend, as driving ROAS for performance marketers has been a top priority ever since we began our journey to reinvent advertising by leveraging deep machine learning.

The Case for Letting Machine Learning Decide

It’s difficult for marketers or their media agencies to predict when users will be most active. But that’s the kind of challenge that machine learning is perfectly suited to address.

Machine learning looks at real-time data and incorporates it into the algorithms on a continuous basis. Moloco’s ML engine, for instance, is updated every hour in order to optimize campaign success. That means if there is a spike in performance at a different day, day part, or channel, Moloco’s DSP will focus your ad spend there.

Another benefit to this approach is that it allows your budget allocation to benefit from the myriad events that prompt users to take an interest in an app — seasonality, current events, weather, mass transit snafus, breaking news stories, or social media trends. The most sophisticated machine learning can pick up on the microtrends, and adapt ad spend accordingly.

Weekly Budget Optimizer Boosts Campaign Performance

Earlier this year, we introduced our Weekly Budget Optimizer, which optimizes spend toward the best performing days and hours of the week automatically.

Weekly Budget Optimizer absolutely ensures that your budget is exhausted, only it lets our sophisticated ML choose the best times to spend it, rather than constricting it to rigid and – let's face it – arbitrary allocations.

The chart below shows how we shifted ad spend from Monday to Sunday, dispelling any preconceived notions that the Weekly Budget Mode might spend too much at the start of the week and not spend enough on weekends. 

Weekly Budget Optimizer chart

In practical terms, we eschew daily spending requirements. Moloco learns from your app’s historical data to identify when users are most active and inclined to convert, and the Weekly Budget Optimizer ensures your budget is always oriented towards ROI.

As a result, performance marketers reap two benefits. First, you won’t pay unnecessarily high CPMs just to spend down your budget on a day where user activity is low. Second, your ad spend will focus on the times when users are most active: the weekends. Which happens to be a time when you face less competition from other advertisers for the user’s attention.

The results are stunning. On average we’ve seen performance marketers enjoy 10% better campaign performance, without increasing their budget at all.

Want to learn how to drive ROAS from your campaigns? Contact us today!

Hyemin Kim

Product Marketer

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