Effective budget management is crucial for advertisers seeking to minimize costs while maximizing efficiency. TrafficStars provides a range of budget allocation models that enable hypothesis testing and enhance campaign return on investment (ROI). This article will cover strategies for setting up and distributing budgets with a focus on testing and optimization.
Setting up the Budget
Our platform allows advertisers to easily manage both the daily budget and the overall budget of their ad campaigns. This functionality provides flexible control over spending, tailored to campaign objectives and testing preferences. Setting a daily budget helps prevent overspending within a single day, which is particularly valuable for campaigns that do not use postback data for lead tracking (we recommend using postback data, as it enhances ROI monitoring and, when paired with the optimizer, delivers more effective results). The overall budget sets the maximum expenditure for the entire campaign. These options enable advertisers to accurately control costs and adjust strategies in real-time, ensuring maximum efficiency in traffic management. Let’s examine each method in detail with examples.
1. Total budget
Pros:
Full control over expenses: By setting a total campaign budget, you know exactly how much you're willing to spend for the entire campaign, helping you keep overall expenses under control.
Long-term strategy: This approach is useful for established and proven campaigns planned for an extended period, where it’s important to have a complete view of the spending. For example, when launching a campaign lasting several weeks or months, you can ensure the budget won’t be exceeded.
Quick testing: It’s convenient when you need to assess the effectiveness of a new combination without exceeding the budget. We recommend setting the test budget to 5-10 times the CPA for each combination of spot + geo. For instance, if the CPA is 5 USD and the target includes 2 spots and 3 countries, the recommended budget for the campaign would be 5x2x3x10 = 300 USD.
Cons:
Slow response: If a campaign underperforms at some stage, the overall budget cap might prevent you from quickly reallocating funds to more productive parts of the campaign. This can lead to underutilisation of potential if automatic optimizers aren’t enabled.
Lack of flexibility: Without daily budget limits, you risk spending a large portion of the budget in the initial days of the campaign, leaving insufficient funds for later stages when performance could improve.
When to use a Total Budget:
For long-term campaigns where spending needs to be distributed over time.
For campaigns with clear goals and a sufficient data history, where you are confident the budget will be spent effectively.
When it’s crucial to control overall advertising expenditure and avoid overspending.
For short-term test campaigns where it’s important to assess the effectiveness of different ad combinations.
PROFESSIONAL TIP: We highly recommend activating the optimizer, which automatically adjusts budget allocation in real time based on the performance of each combination. This helps save costs and achieve better results. Learn more about enabling the optimizer.
2. Daily budget
Pros:
Flexibility and control: Setting a daily budget allows you to manage expenses on a day-to-day basis, which is especially useful in preventing overspending during the early stages of a campaign. It helps reduce the risk of quickly depleting the overall budget.
Risk minimisation: A daily budget helps protect against traffic spikes and auction fluctuations. It prevents sudden large expenses during peak periods when competition may be higher than expected.
Real-time adjustment: Daily limits enable quick responses to campaign changes, allowing budget adjustments based on performance (e.g., if conversions increase significantly on a given day, you can adjust the daily limit accordingly).
Cons:
Potential reach limitation: If the daily budget is too low, you may miss out on traffic, particularly on days when user activity is high. For instance, you could miss peak weekend traffic if the daily limit is reached too quickly.
Inefficient budget use: On days with low user activity, the budget might not be fully spent, leading to underutilized funds that could have been reallocated to more active days.
When to use a Daily Budget:
For campaigns where it’s important to minimize risks and manage spending on a daily basis.
When traffic is unpredictable, and the advertiser prefers to gradually adjust the strategy based on real-time results.
In cases where leads or conversions are generated in real time, and the advertiser can quickly respond to changes in the campaign’s performance.
PROFESSIONAL TIPS: The daily budget is primarily used to mitigate risks, especially for advertisers who do not send us leads and analyze campaign results retrospectively. Setting a daily budget cap helps control expenses and prevent overspending. However, we recommend sending leads in real time, as this enhances the efficiency of advertising campaigns and allows for quicker adjustments. Read our article on postbacks for more details.
In general, most advertisers are willing to set "unlimited" daily budgets, provided the eCPA (effective CPA) remains below a certain threshold and the ROI stays positive.
Total vs Daily Budget
Conclusion
The Total Budget approach is best suited for long-term or test campaigns where managing overall costs is crucial, and there is automation in budget allocation.
The Daily Budget is ideal for campaigns that require flexibility and risk control, where it is necessary to regularly adjust the strategy based on real-time performance.
To optimize results, it is often beneficial to combine both methods by setting an overall budget for the campaign while applying daily limits. This allows for maximum reach while minimizing the risk of overspending in the early days. Additionally, it is recommended to use platform tools (optimizer, postback) for the best possible outcomes.
Budget Distribution Models
Our platform offers two budget allocation options for advertising campaigns: EVEN and ASAP. As the names suggest, EVEN distributes the budget evenly over time, while ASAP spends the budget as quickly as possible. Let's explore each model in detail.
EVEN Model: Pros and Cons
Pros:
Even budget distribution: The EVEN model spreads the daily campaign budget evenly throughout the day, allowing you to reach users at different times rather than concentrating on a single peak hour. This is particularly useful for testing to determine which hours yield the best conversion rates.
Control over ad frequency: With an even spending approach, this model helps prevent ad overload for users. It can also be beneficial in addressing browser issues that erase cookies, which may disrupt the frequency capping feature (limiting the number of ad impressions).
Traffic optimization: EVEN allows advertisers to test different time slots and identify the most effective hours for running major campaigns. You can gather data and optimize future ad scheduling accordingly.
Cons:
Loss of traffic during peak hours: EVEN might underperform if most of the target traffic is available during certain hours (e.g., evening), when your budget has already been evenly distributed. This could result in underutilized budget during low-traffic hours and insufficient funds for peak-hour auctions.
Inefficiency in high-competition periods: Since EVEN distributes the budget equally, it may be difficult to win auctions during competitive hours when there are more participants, potentially limiting the reach and impact of your ads.
Underutilized daily budget: If traffic is low during some hours, there is a risk that your budget will not be fully spent.
When to use EVEN:
When you need to test which times yield the most effective conversions.
When your target audience is consistently engaged with your ads throughout the day.
When it’s important not to overwhelm users with ad frequency.
In situations where the advertiser aims for balanced ad impressions across different time periods.
ASAP Model: Pros and Cons
Pros:
Maximization of reach: ASAP aims to spend the daily budget as quickly as possible, allowing you to reach the maximum number of users in a short time. This is especially useful for short campaigns or time-sensitive promotions.
Increased chances of winning auctions: With ASAP, the entire bid is spent during peak hours when traffic is most active. This increases the likelihood of winning bids during these moments, leading to a larger volume of traffic.
Suitable for specific goals: ASAP is ideal for product owners or companies that need quick results, especially if there is clear data on performance within certain geographic areas or time frames.
Cons:
Excessive traffic in a short period: The campaign may quickly exhaust its budget, resulting in high spending during peak hours. If this traffic doesn’t lead to sufficient conversions, it could negatively impact profitability.
Risk of audience overload: Since ASAP aims to purchase all available traffic as fast as possible, the same audience may see your ads multiple times in a short period, potentially reducing effectiveness and irritating users. We recommend setting frequency capping to limit the number of ad impressions per user.
No time-based testing: Unlike EVEN, ASAP doesn’t allow for testing across different time intervals, as the budget is primarily spent during peak traffic hours.
When to use ASAP:
When you need to quickly capture maximum traffic (e.g., for time-sensitive promotions or limited-time offers).
When you have clear data on the time and geographic areas where your ads convert best.
For product owners looking to aggressively utilize traffic for short-term goals.
When gaining an advantage in auctions during competitive hours is crucial.
Conclusion
The EVEN model is best used for testing and evenly distributing the budget throughout the day. It is ideal for campaigns where gathering data on the most effective time slots is important and where it’s necessary to avoid overwhelming users with frequent ad impressions. This model works best in environments with moderate competition and steady demand for traffic.
The ASAP model is suited for fast, aggressive campaigns focused on capturing maximum traffic in the shortest time. It is effective when the advertiser is confident in their data regarding time and geography or for short-term promotions that require a rapid increase in reach.
Key Takeaway
Selecting the right budget allocation model and optimizing it through automated systems helps improve the efficiency of advertising campaigns and minimize testing costs.
