Trim Ad Budgets Without Sacrificing Quality Customer Growth

Tumultuous markets, supply-chain bottlenecks, and global instability are causing economic headaches for the industry’s biggest and smallest companies. Despite global advertising spend being predicted to exceed one trillion US dollars by 2026, marketers around the globe are facing an unprecedented challenge: trim ad spend, in some cases by as much as 50%, across the board. Doing this without decimating quality customer acquisition may seem impossible; in fact, the IAB’s 2023 Outlook Survey says that 13% of marketers are no longer budgeting for the long term, and 63% are approaching media planning with a higher frequency of evaluations and re-forecasting due to downward budget pressure and market dynamism. But what if it wasn’t an impossible scenario? What if you could cut user acquisition budgets without losing quality customer growth at an equal magnitude?

Our team of expert analysts has helped marketing teams at the largest Fortune 500 companies take a scalpel to their omni-channel media mix. By applying our proprietary data and incrementality analysis, we help identify and eliminate areas of excess spending while retaining quality customer growth during a period of high inflation. 

The impossible is now possible with Incremental Intent – a Kochava Foundry™ Insights Pack.

Incremental Intent provides an additional layer of visibility into performance and cost, measuring the likeliness a user would have become a customer if the winning attribution had not occurred. It suggests budget allocation improvements that increase your reach for every advertising dollar. 

As a marketer, you know that not every install or customer claimed by a network was impacted by their advertising. With this Insight Pack, you can calculate the offset and optimize your spend toward maximal advertising impact. 

Let’s further explore this concept below. You can also watch Grant Simmons, VP of Kochava Foundry, unpack the power of incremental intent in this video.

Historically, budget cuts are determined by comparing customer acquisition cost (CAC) between networks. Brands may choose to cut the costs associated with the highest CAC, eliminating that source(s) entirely. Considering this, let’s play out a scenario.

You’ve just been told your ad budget is getting cut, so you compare Network A, and Network B. Network A has a lower CAC of $20, while Network B has a higher CAC of $25. Following simple logic, you would cut Network B and move on with your life. But that decision is not fully informed.

What about the customers from Network B? How much loss of potential revenue are you facing because of your decision? Without that information, your networks with lower CACs in actuality may be costing you more than you think.

Incremental Intent’s sophisticated approach involves three main concepts; proximity, intent, and causality. This makes it possible to determine between users that engage with your ad and are likely to become customers versus users that trigger a non-causal conversion.

Audiences are grouped into two categories: proximity and intent.

By calculating these dimensions, incremental intent can determine the responsiveness of a user to your ad. Depending on your brand’s markers for success, you can adjust your budget, strategies, etc., accordingly with recommended actions from the Kochava Foundry Insight Pack.

Knowing the user’s responsiveness to your ads is only important if your brand has defined its quality. Quality should be unique to the services and skills your brand provides. For example, if your brand is a streaming service, your quality might be “episodes watched.” 

Once your quality is defined, spend can be modified to target more or less of the customers that meet those criteria for quality.

The combination of incrementality, quality, proximity and intent produces a range of customer cohorts, helping you clearly see the type of customers your different media partners deliver. Using these cohorts, marketers can identify with what partners and channels they should decrease, maintain, or increase their marketing budget.