Mobile Channel Diversification: Driving Incremental User Growth with DSPs and Ad Networks

When it comes to growing a customer base, most mobile apps rely solely on paid social and paid search. But what happens when you reach an inflection point and you’ve maxed out your efficiencies or headroom with those channels? It’s time to try diversifying your mobile channel mix to include demand-side platform (DSP) and ad network partnerships.

DSP and ad network partners can provide tremendous scale, but they can sometimes feel like a black box when you’re trying to test and evaluate performance. And most marketers today don’t have the tools, frameworks, or experience needed to test effectively. This has led to an entire ecosystem of DSPs, ad networks, and affiliate partners that marketers overlook, don’t tap into (due to pre-existing biases), or don’t have the time or knowledge to understand.

This guide will help pull back the curtain and offer practical information for understanding these channels, including the criteria for evaluating partners, ways to mitigate risk, and how to find a path to scale. With this knowledge on your side, you’ll be ready to drive growth by utilizing more levers within your portfolio mix.

Are You Ready to Test DSPs and Affiliates for Growth?

Before we dive into how to find success with these channels, it’s important to understand what they are and determine whether you’re actually ready to diversify your mobile channels to include DSP and affiliate partnerships. 

The basics of DSPs

DSPs have been around for 10–15 years and use programmatic advertising, or automated real-time ad buying and selling, to allow marketers to access a wide range of ad inventory. This lets us buy ad placements across several hundred sites at the same time, without the clunky back-and-forth of individual negotiations, IOs, trafficking, etc. that’s common in traditional media buying. DSPs also offer helpful benefits like fraud prevention tools, sophisticated audience targeting and optimization capabilities, real-time campaign performance data, and budget flexibility.

Unlike Facebook and Google, onboarding in this channel is typically straightforward thanks to the help of dedicated account managers. Even conservative budgets still get great service—your budget rarely determines what level of service you receive.

“Most advertisers are the smallest fish in the pond on Facebook and Google’s ad platforms,” said Matt Knutson. “But with many DSPs and ad networks, even modest budgets can get you great support and service.”

The one main drawback of DSPs is that they’re not always as intuitive as paid search and paid social platforms, so it can be intimidating for marketers that have never worked in this channel to get started.

During the earlier days of DSPs and ad networks, there were many partners to choose from, but in recent years, they’ve consolidated and merged with one another. With fewer options to choose from, it's easier to research your options and decide which one is best for your needs.

Prerequisites for testing into DSP and ad network partnerships

Many marketers are feeling the brunt of higher CPMs on Facebook, especially in a post-iOS 14 world, and are eager to dive into something new, but don’t know when to take the plunge. In general, we recommend you have the following in place before getting started with diversifying your channels:

• Large install volume (including organic). You should have customer acquisition figured out for search and social first, which is a strong indication that adding additional channels will yield additional scale. Some partners will want to see 500–1,000 installs per day to be sure that you’re already driving conversions (organic or otherwise) that they can exclude and possibly run lookalike audiences on to drive performance.
• Willingness to spend money learning. It could take a few cycles of testing and significant budget allocation to find your footing in a new channel.
• A solid attribution strategy. Your attribution methodology needs to be able to accurately assess your test results and you need cross-functional buy-in up front to assure your team that the results haven’t been manipulated in favor of your desired outcome.
• Creative capacity. Testing often involves frequent creative iterations and you’ll need the right design and production resources to keep up. Usually that team will be a strong performance marketer and a designer, and (ideally) a technical person who can help with a one-time pixel implementation.
• Access to experts in these channels. DSPs are quite different from paid social and paid search platforms, so testing them won’t be the same. Having someone with deep expertise in these channels will help you test more effectively and more efficiently.

“There’s no definitive point where you can say, ‘I’ve spent $XX, I’m ready,’ and it’s more the realization that you’ve tapped Facebook and Google as much as possible, you’ve done all the tests, tried all the products, used all the best practices, and don’t have the scale or performance that you used to,” said Matt Knutson. “At that point, it might seem easy to just jump to different social platforms, but when it comes to efficiency, scale, and reach, DSPs and ad networks are often a better avenue.”

Evaluating New Partners 

Within this ecosystem, most partners allow you to reach the same audiences. While there are a few niche networks that cater to specific sectors, like gaming, most are vertically agnostic, which means you should pick a partner based on whether they meet your needs, not necessarily your vertical. 

The most important things to consider when choosing a partner are:

• Ad inventory
• Transparency
• Technology
• Bid and optimization models

“You want to look at unique or exclusive inventory sources of media that you can’t buy anywhere else,” said Matt Knutson. “Transparency, in terms of cost and placement, is also vital. You want to make sure you can see and evaluate their entire supply chain, technology and data onboarding, and partner or tech integrations.”

Budgeting and Measuring for DSP Tests

If you’ve already scaled paid search and paid social, use what you’ve learned about your test budgets for those channels to determine your budget for testing a DSP partner. You may run into spend minimums depending on the partner, but these can be negotiated (especially for initial tests) so you’re free to base your budget on what feels comfortable to you. Just be sure to allocate enough money to get the amount of data needed to prove, in a statistically significant way, whether the channel is right for you.

And again, just like paid search and social, your KPIs are ultimately up to you—define what’s most important for your company to measure against. You can run campaigns geared toward general awareness, but you’ll probably find it more useful to focus on more specific performance metrics like cost per lead (CPL) and cost per acquisition (CPA) while optimizing for clicks, installs, signups, etc.

Testing Your Creative

The lift for testing creative in this channel is a bit heavier than what you might be used to seeing in paid social. This is because unlike paid social ads, which have multiple components you can update independently (e.g. visuals and captions), most DSP ad inventory is comprised of standard banner ads—meaning if you want to change a variable, you’ll need to update the entire creative asset.

However, the specs for DSP and ad networks are generally the same as Google display ads, so if you’ve used those before it should feel familiar. (Note: Some DSPs have Facebook-style ad inventory tools, but that’s not the norm in this channel.)

Static display should be tested and optimized before jumping into video, and your creative should be organized by theme, format, and size to best understand what your data is telling you.

Understanding DSP Attribution Windows

Like other channels, nailing your attribution is key for accurately assessing your performance. The two methods of attributing actions or events to partners are click-through (user physically clicks on your ad) and view-through (user is served your ad, but doesn’t click). This alone is no different than Google, FB, Snapchat, etc., however, those partners are classified as ‘self-attributing networks’ (SANs) as they are the ones determining if/when they should get attribution credit. SANs also tend to have broad default attribution windows that help them catch gray-area conversions in their net. 

With DSPs and ad networks on the other hand, it is more standard practice to leverage a third party mobile measurement partner (MMP) to determine attribution credit, leading to a more accurate and 1:1 attribution system. 

Additionally, this channel gives you more control over your attribution methodology; you are the one who gets to determine how large or small your windows are. If you’ve done testing on Facebook (remember: you should have already done this!), you can evaluate past performance at different window settings which can help you determine how aggressively you’d like to set your windows for DSP and ad network partners.

All major MMPs, like AppLovin, Digital Turbine, AppsFlyer, and ironSource offer suggested default settings when you start out, but you can also customize them based on your needs.

“When you’re running ads with more than one partner, attribution can get a bit tricky,” said Max Mackey. “But by the time you’re diversifying into this channel you should have enough of an understanding of attribution and incrementality to sort through the data and draw accurate insights.”

Keep in mind that you should have different windows for clicks, installs, and events. As long as you know what those windows are, you can have a more accurate idea of where your conversions are coming from and when your partners deserve credit. This resource from AppsFlyer offers helpful information on attribution windows.

In my opinion, AppsFlyer approaches the best of both worlds when it comes to lookback windows and other customizable attribution settings. Some advertisers are very intentional about their approach to measurement strategy, and get a lot of value from the flexibility in the controls AppsFlyer provides. Others prefer to simplify workflows with ad partner programs - those teams get a lot of benefit from the default settings stored for each integration, managed by ad partners themselves in accordance with ecosystem best practices.—Kristin-Leigh (KL) Brezinski, Client Services Director, AppsFlyer.

Avoiding Ad Fraud with DSPs

When we think about fraud in the marketing world, our minds often jump to scammers using fake credit cards or bots posing as fake people. But what we’re talking about here is ad fraud—when a partner (either knowingly or not, and through a variety of different ways) gains attribution credit in order to get paid out on cost per install or cost per signup. Avoiding this type of fraud starts with understanding your attribution windows and having a clear agreement with partners regarding when they should get credit.

“A lot of partners will say that they have their own fraud suite, but we recommend using your MMP’s fraud tools because they’re the mediation platform,” said Max Mackey. “If an MMP spots fraud, they’ll reject install credit”

Most MMPs require a higher service tier to get access to their fraud suite, but it’s often worth it if you’re having continued trouble with ad fraud. Our preferred product is Singular’s fraud prevention suite. They offer the best mix of standard and custom fraud rules, and are industry leading with the signals they’re capturing to make fraud decisions. 

Like all digital channels, there’s a threshold for when you should be legitimately concerned about questionable traffic. If you start to see an increase in potentially fraudulent traffic or if 10%+ of your traffic is getting flagged, it’s probably time to reconsider doing business with that partner because the type of traffic they’re sending to you is not aligned with your goals.

Expanding Within the Channel

Once you’ve found success with DSP partners and are seeing the scale and performance you want, there are several ways you can dig deeper into the channel and unlock even more growth by:

• Expanding to direct partners/networks
• Testing out-of-the-box (OOTB) device placements
• Exploring country-specific networks

DSPs are a one-stop shop that allow you to advertise in many different places, but if you’re seeing the majority of your spend go to one app, it’s probably worth discussing a direct relationship with that app. This is a rare situation and requires an experienced person to handle the negotiation and setup. And keep in mind that the benefit of DSPs is that you only have to manage one platform; if you set up multiple direct partners, you’ll have to manage each of those individual relationships.

OOTB placements offer exclusive inventory, like on the launchers/setup wizards on Android phones. Historically, this type of inventory was only available through the device or carrier, but there are now several DSPs offering these placements.

And finally, if you’re having trouble with iOS SKAN performance and want to see your ad spend used more efficiently, try expanding into international markets where there’s higher Android adoption. 

Conclusion

Now that we’ve outlined the basics of DSPs and ad networks, how to know when it’s time to test into this space, ways to evaluate partners, and how to set up attribution to avoid ad fraud, you’re ready to diversify your mobile channels. Expanding into DSPs can help you jumpstart your growth, ramp up your ability to scale, and avoid stagnating your entire budget in paid search and social. As this space continues to grow and mature, there will undoubtedly be even greater opportunities to make the most of DSPs.

Are you interested in chatting about mobile app marketing channel diversification? The experts at Right Side Up—like Matt and Max!—can help. Drop us a note at growth@rightsideup.co to chat with our team about the right strategy for your goals.