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How to Diversify Your User Acquisition Strategy to Scale a 7-Digit Budget

By Agustin Ochoa | September 20, 2022

Agustin Ochoa is Senior Performance Manager at Winclap. His beginnings in digital marketing started at IMS Internet Media Services, where he worked on the programmatic team until 2017. Agustin later moved to Google to help the DoubleClick team – now known as Google Marketing Platform. From 2017 to 2022, Agustin worked in Google’s gTech, Sales and Tech. More recently, Agustin leads Media Buying at Winclap with a team of 30+ performance specialists.

Learn more about Mobile Hero Agustin.

Properly scaling a 7-digit budget for user acquisition includes various components, one of which is designing and optimizing the channel mix.

With so many channels, an advertiser growing and scaling paid media campaigns is probably wondering: “Where do I start? How should I design the media mix as the budget grows monthly from 6 digits to 7?

You need to first understand how channel diversification can contribute to a mobile marketing strategy. In this blog, learn how a diversified user acquisition portfolio helps scale growth and what standards to look for when evaluating and selecting reliable media partners.

Diversification is key

Most app advertisers use only Facebook and Google for user acquisition to scale spending for profitable growth. But to scale your ad spend further, diversification is needed. Not only to maximize results but also to minimize risks. I don’t recommend relying on one high-performing media entirely because different traffic sources help reduce the impact caused by unexpected changes. This rings even more true with current policies and measurement technologies evolving constantly.

To maximize budget return, diversify your strategy across multiple channels. Each media presents different LTV curves and different performances on Android and iOS. While Google Ads performs very well on Android, it tends not to serve as well on iOS. On the other hand, Meta can sometimes perform well on iOS, not Android. Simply put, do not depend only on a limited number of media planners.

Seek to first understand where your target users are and what technology each partner offers. When we talk about big budgets, we can’t leave out TikTok, Twitter, Snap, or programmatic networks. Working with mobile phone manufacturers is also interesting and new media sources are constantly appearing with unique value propositions.

Get Comfortable with Different Budget Allocation Methods

There are two types. First is waterfall planning. You allocate budget according to each channel’s efficiency, maximizing investments in the channel that produces the best result in metrics such as CPA or ROAS. Once this channel is saturated and metrics exceed the target values, move to the next channel. Continue this cascade until there is no more budget. This method ensures prioritizing the top-performing channels for budget allocation.

There is also the distributed budgetmethod where advertisers divide their budget into as many channels as possible, maximizing results and allocating the budget between multiple channels. You achieve better ROI from each channel than in waterfall planning because the saturation is lower. Both diversification strategies will help us obtain a better total portfolio ROI.

The distributed budget method may yield better results, but it is more expensive to implement. The method involves a large team monitoring and optimizing all channels constantly and a lot of testing & measurement methodology to find the best combinations of media, tech & creatives. Due to its complexity, distributed budgets make more sense for large spend volumes or if you have a reliable partner who is an expert in planning, execution and media measurement.

Web and Measurement

Diversification is also essential between web and app to remove dependencies and increase the reach of user acquisition strategies. Websites can be a great source of app installs, but the perceived complexity of cross-environment measurement often keeps app advertisers on the sidelines. Looking at the top exchanges, more than 35% of smartphone inventory is web globally. At certain spending levels, websites present themselves as a media channel worth considering.

If we opt for a diversified UA strategy across channels to maximize return, another key aspect is measurement. As mobile identifiers disappear and UA measurement becomes more challenging, the importance of incrementality and media mix modeling grows. It is necessary to adopt these frameworks to ensure that there is real value in each channel or campaign that we activate, and avoid fraud or strategies that don’t add value, or cannibalize other channels.

Teams must carefully design their media mix and choose traffic sources. More importantly, reconsider your media portfolio regularly. To do this, you need to know what to measure. The true success of performance campaigns is in the LTV / CAC ratio, so it is necessary to go beyond metrics such as CPA or ROAS.

Tips to Testing New Channels:

  1. Do the research

When it comes to your research, referrals among colleagues, MMP representatives or friends are valuable. The industry is not big and your network can help provide reliable feedback for media partners you are considering. The performance indexes provided by the MPPs are a great source of information on where to start.  Contacting the media partner directly to learn about their inventory, placements, technology and audiences is another great way to learn. Remember to ask for transparency regarding clicks, impressions and publishers.

  1. Set realistic times

Sometimes setup times are longer than we expect. Doing the paperwork, integrating into analytics tools and preparing for release takes time. Plan accordingly. Also consider the learning phase to obtain representative results, which may be higher or lower depending on the type of media.

  1. Set success metrics

From the beginning, think about how to evaluate partners and what are the expectations. With expectations, you need to set realistic goals.

  1. Measure and evaluate results

Should a media partner stay in your portfolio? Measuring and evaluating a media partner’s results is crucial to deciding if they stay in your portfolio. Look at efficiency metrics, the potential volume and the quality of the traffic.

  1. Give feedback

Talk to your media partner. Discuss the results, any anomalies and check if there are improvement opportunities that have not been taken. If there is a paused campaign, a feedback discussion will help you realize there is no opportunity left. In general, optimize the campaign as much as possible until your budget caps out.