How to improve ROAS with a little help from your partners
Posted Apr 4, 2019
App marketers can’t afford to drive their businesses while blind, spending on ads without identifying the most cost-effective channels. With the right data, marketers can learn what delivers the best value for money and how to allocate budgets for optimal results. This is why most app marketers are sharply focused on increasing their return on advertising spend (ROAS), widely regarded as a marketer’s North Star metric.
ROAS is the KPI that answers a simple but essential question: is my ad spend generating sufficient revenue? That means dividing the revenue produced by the amount it cost you. If you spend $5,000 on advertising and earn $10,000 from the users you convert, your ROAS is 200%, or 2:1. It’s a positive ratio, but this isn’t enough data to optimize your ad spend – for that, you need a precise measurement for how much each user cost to acquire, and the revenue they’ve generated over time.
Granular ad spend data is essential to ROAS optimization
Drilling down into the data to determine precisely what is boosting your ROAS to 200% is the most effective way to optimize your ad spend for an even better ROAS. The only way to achieve this is by gaining granular visibility into campaign performance.
This allows you to compare networks based on the performance of the essential cost KPIs that impact ROAS, from the sum of install costs to effective cost per mille (eCPM) and effective cost per click (eCPC). But even this is not enough.
Going deeper, you need user-level data for ad revenue and ad spend to identify which users are significantly boosting ROAS. It could be that a small segment of your user base is contributing the most value by viewing ads (audience attention you can monetize) or simply engaging with your app. However, without data to help you understand who your most valuable users are you can’t be sure – preventing you from netting similar users for your app.
This is a critical transparency issue that stands between you and your ability to optimize for ROAS. It’s also an obstacle that IsCool Entertainment, a leading publisher of social games for web and mobile, has cleared. The company, which has numerous award-winning titles including Wordox, Is Cool, Belote Multiplayer, Crazy 8 and Super Kiwi Castle Run, leverages Adjust’s Ad Spend API to get an accurate measurement of how their ad spend performs across each network. This allows them to allocate budget more effectively, with confidence they will acquire high-value users in the process.
Hadrien des Rotours, CEO of IsCool Entertainment, says his team is "happy to use the Adjust Ad Spend feature as it allows us to measure a precise return on investment for all networks with the same accuracy and the same granularity.” With the API his team can gain this essential data because, in addition to measuring in-app revenue, Adjust works with networks to track mobile advertising spend at granular campaign sublevels. “Thanks to that we're now able to make the right tradeoffs between sources and make positive decisions,” he says.
Adjust’s Ad Spend API allows app marketers to identify the most cost-effective channels and allocate budget towards the highest performing campaigns. More recently, we’ve integrated with some of the most popular and high-performing ad networks in the industry to dynamically receive and display detailed spend data in the Adjust dashboard (you can also receive raw ad spend data through real-time callbacks to your BI system via placeholders).
Transparency leads to stronger partnerships and greater return on advertising spend
By pushing for greater transparency throughout the industry, these networks are also pleased to provide clients with data that helps them achieve greater success. For example, Vikas Gulati, Head of Performance at AdColony, states that "one of our ongoing initiatives at AdColony is to be one of the most transparent companies in ad tech, and using Adjust's Ad Spend API is another excellent tool from a company we view as a true partner to help us on that mission.” He added that “by giving our mutual clients access to more data and a better overview of ROAS in the Adjust dashboard, it can help them make more effective decisions in their day to day campaign optimizations, making the entire process more transparent for our clients."
With AdColony’s reach of more than 1.5 billion global users, this is a giant leap for transparency throughout the industry. Giving access to better data also builds greater trust between partners, allowing marketers to confidently increase ad spend with those networks.
Ad spend data is so useful to marketers that sharing it needs to become an industry standard – so there’s still more work to be done. It’s up to marketers to let their partners know the immense value of receiving ad spend data via API or engagement, and that it’s essential to developing the success of those partnerships further. Moving forward, it’s important that this necessity is made clear so that marketers can measure a precise ROAS for all networks with equal granularity.