It’s a new year and a new day in the mobile economy. In 2022, rising costs and inflation led to a slowdown of in-app purchases as users recalibrated their spending habits to fit their financial needs. In 2023, mobile ad spending growth will also slow as budgets tighten to align with the slowdown in mobile spending.

While Q1 has already started, there’s still time to optimize your 2023 growth strategy. Furthermore, with average cost per impression (CPM) decreasing in Q1 following the busy Q4 shopping season and dropping even further from January to March, it’s a good time to make adjustments.  

What can marketers do to drive ROAS and meet their Q1 2023 goals in the current economy? Below, we cover top strategies for app developers and performance marketing agencies looking to plan a Q1 mobile growth strategy for maximum success.

As budgets tighten, ROAS is more important than ever

With rising costs and privacy restrictions like the deprecation of the IDFA, acquiring new users has gotten more expensive. It’s more important than ever to keep track of your return on ad spend (ROAS). In 2023, app developers and performance marketing agencies should prioritize proven channels and strategies that drive a positive return.

Ways to drive ROAS in 2023

From testing new conversion flows to diversifying your ad spend, here are five ways to increase your ROAS in the new year.

Update your LTV models

“The times they are a-changin’!” As inflation shifts the way individuals save and spend their money, customers’ lifetime value (LTV) potential has become harder to predict. To keep up with economic changes, marketers should update their LTV models based on current market trends. As you build your models, be conservative in your assessment of users’ buying potential to craft realistic KPIs.

Diversify your ad spend

At LifeStreet, we recommend that our partners operate in a kind of “safe mode” in 2023. In other words, with LTV curves harder to predict during these uncertain economic times, it might not be the right time to over-invest in one channel or strategy. It’s important to spread your budget across a variety of proven channels and platforms. This limits the risk of a major loss if one channel underperforms.

Moreover, if your agency or brand hasn’t explored programmatic media buying yet, 2023 is the time to do so. Why? In today’s multi channel, privacy-focused mobile landscape, programmatic buying is the most efficient way to target quality users across the mobile marketplace. Not only does it unlock high-quality, scalable inventory, but if you work with the right programmatic DSP, they can help you build ROAS-positive bidding models optimized to acquire your specific audience cost effectively.

Work with a DSP partner that can scale

Finding supportive and trusted partners is key in today’s economic climate. Make sure to work with DSP partners that can access in-app inventory to engage your target audience. Consider working with a specialized DSP that not only has industry-specific data about your audience but also programmatic experience, historical machine learning models and custom model testing capabilities to maximize the potential of your campaigns.

As the economy fluctuates and privacy restrictions continue to evolve, you should be even more demanding of your partner to provide you with a transparent understanding of where your budget is driving results.

Try app-to-web conversion flows

At LifeStreet, we’ve helped many of our partners take advantage of app and gaming traffic and drive ROAS, regardless of whether they have their own app, with app-to-web conversion flows. In contrast to a typical in-app advertising conversion experience in which a player sees an in-app ad, taps it and downloads an app, an app-to-web conversion flow takes a user to a mobile web page to convert. App-to-web conversion flows can be a great way to boost ROAS for performance marketing agencies that don’t have their own app but still want to leverage app inventory to drive performance for clients.

Invest in your creative strategy

It’s important to build out a creative strategy that produces new ads efficiently in 2023. Why? With Apple’s restriction of the IDFA, ad creatives have become a key lever available to marketers to control the performance of their campaigns. With that said, in the new year, you should invest in building a creative strategy that efficiently produces highly-engaging creatives and drills down on the details of their performance.

One ad format to consider in 2023 are playable ads. Playables generate high-converting leads by offering an interactive, gamified snapshot of an app in an ad. This “try before you buy” type interaction drives high engagement and unlocks opportunities to run ads on rewarded traffic. In fact, playables have the lowest cost-per-install (CPI) across ad types (an average $1.98 CPI versus $3.79 for other gaming ad formats).

‘Tis the season to scale your growth

If the brand you’re growing is in the position to scale, the beginning of the new year is a good time to do so. As mentioned above, in Q1, CPM rates are much lower than in Q4; and they continue to dip from January to March. To capitalize on these trends, focus on testing your budget in Q1. This testing might include trying programmatic media buying if your agency or brand has not done so yet.

Programmatic advertising is faster, more efficient, and cheaper than traditional media buying methods. Because of its use of data and algorithmic technology, programmatic enables marketers to target audiences at the right time and the right cost. Advertisers can make enhancements to their campaigns in real-time, and review their performance on an ongoing basis. In the current economic climate of tightening budgets and inflation, programmatic advertising can help your brand or agency cut costs while also enhancing the quality of your campaigns.

Even if you can’t scale, you can still drive ROAS in 2023

Even if you’re not in a position to scale, you should stabilize your strategy and maintain your performance at your current spend level. At LifeStreet, we help our partners do this through our suite of optimization tools including our A/B bidder and model testing features, and CoPilot, a rule-based optimization tool that automates model predictions and conversion valuation.

Takeaways

How should brands craft their Q1 growth strategy as inflation slows economic growth in the new year? As costs rise, it’s more important than ever to prioritize proven channels and strategies that drive ROAS.

• Update your LTV models
• Diversify your ad spend
• Work with a DSP partner that can scale
• Try app-to-web conversion flows
• Refresh your creative strategy

While Q1 has already started, it’s still a good time for agencies and brands to optimize their 2023 growth strategy especially as the average CPM is lower in Q1 than Q4. It’s also a good time to consider programmatic advertising which is faster, more efficient, and cheaper than traditional media buying methods.

Unlock scale and drive ROAS in 2023

As mentioned above, building relationships with trusted partners is a key way to weather the current economic uncertainty and meet your goals in 2023. Reach out to our team of growth and UA experts to work with a DSP that can help you identify new users, unlock scale and drive ROAS in the new year.