AdTech 101: Balancing Budgets and Bids for Maximum ROI
Simply launching an ad campaign is no longer enough in today’s competitive digital landscape. To drive impactful results, you need a solid understanding of how to allocate your ad budget effectively, and choose the right bidding strategies that align with your specific goals.
With numerous options like daily budgets, automated bidding, and cost-per-click (CPC) models, it can be overwhelming to decide where to begin. In fact, a study from Frequence found that 78% of advertising professionals view campaign management challenges as the most difficult part of their job. Additionally, a survey from Rakuten Marketing found about a third of US marketer’s thought their budgets would be lost as a result of poor strategic planning and / or incorrect channel focus.
It’s clear managing ad spend allocations and optimizing campaign strategies is an essential capability for brands and advertisers today – especially as every dollar needs to go as far as possible. Let’s explore some tips and strategies to help you balance budgets and maximize ROI.
What Is an Ad Budget?
An ad budget is the amount of money you allocate to your online advertising efforts over a defined period of time. It determines how often your ads will be shown, how many impressions or clicks you can expect, and the volume of traffic you can generate. Setting an appropriate budget is critical to ensuring your ads are visible to the right audience at the right frequency.
What Are Bidding Strategies?
Your bidding strategy dictates how much you're willing to pay for clicks, impressions, or conversions. It directly influences how your ads rank in the auction process, determining how often and where your ads are displayed to users.
Here are some common bidding strategies:
- Manual Bidding: You set the maximum cost you're willing to pay per click. This offers full control but requires regular monitoring and adjustments.
- Automated Bidding: This strategy automatically adjusts your bids to maximize clicks or conversions based on your budget, minimizing manual intervention.
- Smart Bidding: Powered by machine learning, this strategy optimizes bids in real time to achieve specific outcomes like conversions or return on ad spend (ROAS).
To choose the right bidding strategy, it is important to align it with your campaign objectives. For instance, CPC (Cost Per Click) is ideal for driving traffic, while CPM (Cost Per Thousand Impressions) works well for increasing brand visibility. For conversion-focused campaigns, CPA (Cost Per Acquisition) ensures you only pay when a conversion occurs, maximizing ROI.
For real-world examples of different bidding strategies in action, and the results they lead to, check out some of our case studies.
Differences Between Ad Budgets and Bidding Strategies
While ad budgets and bidding strategies are both essential to a successful campaign, they serve distinct purposes:
- Ad Budgets: Control how often your ads appear and determine the overall reach of your campaigns.
- Bidding Strategies: Affect how much you're willing to pay for each interaction, influencing ad placement and ranking.
Understanding how ad budgets and bidding strategies work together helps you create a cohesive, effective advertising strategy that maximizes your spend.
There’s no one-size-fits-all solution when it comes to digital advertising. Success relies on finding the right balance between your ad budget and bidding strategy. It’s an ongoing process that demands constant monitoring, analysis, and optimization to achieve the best results. While it’s essential to explore a variety of digital advertising efforts, focusing your budget on high-engagement platforms — can significantly enhance your campaign's effectiveness. AdTech solutions provide unique opportunities to reach audiences in the spaces where they are most active.
At MobileFuse, we specialize in helping brands optimize their ad budgets by targeting high-engagement platforms like mobile in-app and CTV. As the digital landscape continues to evolve, our expertise ensures your ad spend is allocated where it delivers the most impact, driving meaningful results while maximizing your budget’s efficiency.
Ready to learn more? Connect with us today to start optimizing your advertising strategy.
