Our Mobile Influencers weigh in for the third installment. We'll let their insightful answers speak for themselves.
Given some UA budget, how do you determine which chunks to use for experimentation (i.e. new vendors, new ideas with existing vendors)? How do you balance experimentation vs. return on ad spending?
"If you get additional budget, you should invest in what you know already works. However, to stay competitive you should test 1-2 new channels a month if you have the team size to support that. Tests with existing vendors are very reactionary, and you should test immediately if they are aligned with your business goals."
"We like to allocate 10-20% for experimentation, and this number depends on ROI and goals for the month. Experimentation is important as this industry is ever-changing and without it, we wouldn't be able to stay competitive over the long run. However, the results of experimentation are often 'hit-or-miss' which is why most of our focus is on tactics that are proven to work."
"Depends on goals, and this is something that will vary from team to team. High level ROAS (total spend / total revenue) will take this into account so it's something that can be driven by where the product is in it's life cycle. Work backwards from your goals with well known sources that you can leverage to meet KPIs, and you'll be left over with budget that you can either double down or put to testing new channels."
"In a perfect world, if you found a UA strategy that worked, you'd just continue investing in that strategy ad infinitum. Unfortunately (and fortunately), our industry is extremely dynamic. For better or worse, the ad ecosystem is becoming increasingly more sophisticated and transparent. Bids are becoming more expensive in mobile as a result of many factors, including big brand buys, more savvy user acquisition teams in the market, more games and apps overall, and an increasing shift towards programmatic. As a result, casting a wide net with traditional UA methods is tough. In order to compete, advertisers must constantly be testing new strategies. New vendors pop up all the time, and it's important to know when to be a first mover in a space or strategy, and when to follow suit.
Generally, we know that experimentation is essential for our continued success, and strategies we learn from experimentation often become the new status quo. This is why we like to allocate a certain percentage of budget towards experimentation. We like to assess what our needs are, for example growth in ROW countries, greater access to MRAID inventory, higher quality from real-time bidding, stronger post-install event optimization for particular segments, etc. and see what new vendors or strategies are aligned with these goals.
New vendors and strategies are risky, and budget should be set in accordance with your risk tolerance and KPIs. But bear in mind that by not pursuing new technology and ideas, and by not continuing to innovate, you're potentially exposing your business to even more risk in the long-run. "
Did you miss the first and second interviews in our series? Check them out!