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5 questions you haven't asked your DSP (and need to)
October 13, 2021
Much has changed in mobile, but many of the top questions you should be asking your demand-side platforms (DSPs) remain the same. The key is asking questions that assess whether adding a DSP to your stack will fulfill a specific need. This might be access to a specific audience segment, geo or capability, like retargeting.
Odds are, you work with multiple DSPs for your user acquisition needs. In an ideal world, you would also work with multiple DSPs for your retargeting needs. If you don’t, then consider adding more retargeting partners to your mix or partners that can do both. Why? Because investing in proactive retargeting in line with your user acquisition is the key to a fully optimized marketing funnel. Just look at how game apps have seen no dip in downloads or revenue since Apple restricted the IDFA.
To help you evaluate prospective DSP partners, here is your checklist of questions to ask. Instead of including the usual ho-hum inventory and technology questions, we aimed to provide questions that get to the heart of the value a DSP would provide to your current growth stack.
1. Can we transition to a CPA cost model?
This basic, all-important question should be the first in your arsenal when assessing a DSP, is that DSP taking into account the overarching performance? CPA stands for 'cost-per-action' and is a type of KPI goal structure where the marketer takes into account their return on their investment (ROI), with ROI-generating actions ranging from an account registration to an in-app purchase. Essentially, it measures campaign performance by taking into account the actions beyond the install (in other words, driving actions on a CPA and/or ROI goal-basis).
This model ensures campaign efficiency, in contrast to other types of models such as CPI ('cost-per-install') or CPC ('cost-per-click'). While a CPA optimization structure ensures you are only paying for high-quality, ROI-generating user actions, a CPI/CPC structure does not ensure your investment is going to engage high quality users who will drive revenue.
To start, DSPs will often set you up on a dynamic CPM campaign model that charges a fluctuating fee for impressions based on bid amount. Then, the DSP will ensure your campaign backs into your CPA/ROI goals.
A blended CPA-based strategy initiated by a CPM campaign is a smart way to begin as a CPA cost model can restrict your bidding capabilities. A CPM model, on the other hand, allows for more flexibility across channel, geo, creative format and segment. It’s also a more realistic and practical approach, as achieving a cost-effective CPA requires learnings and data.
Be wary of DSPs that don’t offer the ability to transition to CPA/ROI cost model options and, instead, focus on CPM, CPI and CPC-based goals and payment structures. A DSP that is high-performing and can manage your budget efficiently at scale will utilize a CPA/ROI optimization methodology and offer the ability to transition to a CPA/ROI tier cost model.
2. Have you worked successfully with other apps in our category?
This is a great question to ask in order to understand whether a DSP has the expertise you’re looking for. A DSP with a heavy focus on game app inventory might not be the best fit for a retail app with a mostly female, under 25 user base. On the flip side, if you’re an app that caters to young women in their mid-30s to 40s, perhaps working with a DSP with extensive in-app inventory in the casual and hyper-casual games category will unlock new segments of your target user base.
A great follow-up question to add here is asking, ‘What’s the average length of time you work with an app?” This gauges whether the DSP has long-term, sustained partnerships with other apps. Such relationships indicate consistent performance and technological agility. Any DSP might be able to access high-growth, untapped audience segments, but a DSP with constantly evolving technology and expertise will have longer relationships with apps.
Finally, while it’s unlikely that this question would invite a direct (or, even accurate) response, one you might also consider is asking what a DSP's client churn rate is. If a DSP averages a 3-to-6-month relationship with an app, then you’re better able to tell if it delivers long-term value.
3. Can you help us optimize ad creatives?
A DSP that can help you fine tune creatives and test a range of designs indicates a DSP that is well-rounded. It also appreciates the importance of design in influencing a user’s actions. Editing a CTA to be more specific, adding a pop of color to make a button stand out - these are all design changes that make a world of difference to increasing your CTR.
A good DSP will either have an in-house creative team or a steady, cohesive partnership with an external creative team that can support your design needs. It’s especially important to find a DSP with access to creative teams that specialize in designing for mobile. Creative agencies are not all created equal and the ones that don’t have experience with the specific formats and design needs of mobile devices need not apply.
4. Are you growing as a company?
This question evaluates a DSP’s success and whether they have the resources to continue investing in their technology. A successful mobile DSP will have the resources to build out their product, inventory and integrations as your app evolves. This is important so you can continue testing and accessing new audience segments.
A DSP that’s growing will also be better equipped to weather the constant fluctuations of the mobile ecosystem. If the DSP has done particularly well throughout the pandemic, take note. This indicates they are technically agile and able to pivot in the face of industry changes like recent data privacy trends.
5. We already have DSPs for our UA and retargeting needs. Why do we need another one?
This is a great question and any solid DSP provider will take pleasure in answering it. Essentially, what this question is asking is how the DSP is different from the rest. Many DSPs have the same basic inventory, integrations and technological capabilities. Which begs the question: what’s the competitive advantage of one versus another and why would a marketer invest the time and resources in switching unless it’s clear?
While most DSPs have similar technology and inventory, what can set them apart is their ability to help you at multiple points in your user lifecycle. Also, their length of experience in mobile (read: historical, first-party data).
A DSP that can help you with UA and retargeting is better than having a different DSP for each. Why? Because it’s more efficient and these activities are better done in tandem with each other from the start.
Additionally, a DSP with a history of UA that has translated that UA experience into building out retargeting capabilities will have an understanding of how to optimize a lot of different types of mobile ad campaigns across different app categories and use cases. They will also have proprietary, first-party data on what ad placements, formats and targeting strategies do and don’t engage users; which has become ever more important in a post-IDFA world.
These evergreen questions can help you assess a prospective DSP regardless of the current changes in the mobile industry. Consider using these questions to evaluate (and onboard) DSPs with both user acquisition and retargeting capabilities.
Investing in proactive and steady retargeting efforts at the awareness stage, before your users become inactive, not only increases user loyalty and brand recognition, but also helps your UA targeting efforts by supplying you with valuable re-engagement data about your users (for example, what offers keep them interested) that you can use in your initial UA targeting efforts. This, in turn, creates a leaner, more efficient marketing pipeline that targets power users from the start.