The RAAS business model is on the rise, and many businesses use it today. However, recently, many app owners have moved towards this model to avoid possible internal backlash and show short-term growth. Today’s KPIs are no longer limited to easy goals like installs and events (as per attribution platforms) but have now moved on to hard events that match backend numbers. With the high volume of fraud, advertisers are using KPI-based payout structures to safeguard themselves. RAAS gives the advertisers some sense of control that puts their minds at ease. That said, RAAS also comes with its unique challenges.
RAAS does have a lot of benefits and can bring quick, short-term success for clients. For performance driven brands, RAAS can be a quick way to deliver tangible results. If scaling in the short term is the most important criterion, RAAS is the model to go with.
However, RAAS can also throw some challenges that the majority of people do not like to discuss.
The blackbox problem
Where did my conversion come from? I have seen many companies struggle to answer this simple question. RaaS providers often use proprietary algorithms and strategies, making it difficult for brand owners to understand how their campaigns are being optimised. This lack of transparency can lead to a sense of uncertainty and reduced control over the marketing process. Marketers may have limited access to granular data on campaign performance, hindering their ability to conduct in-depth analysis and make informed decisions.
When brand owners fail to understand the customer journeys, they fail to scale on their own. This leads to over dependency on delivery channels with no long term planning on acquisition. This also overlooks the long term usage pattern of users. A banking client might want to get a large number of account open events in the short term but in the long term they would want these users to continuously use their services. The app owner in this case will be unable to understand the source of a good or bad user from the data available. Justifying ROI over the long term becomes problematic.
While RAAS does protect from ad frauds like bot devices and fake events, it doesn’t necessarily protect from click spamming, organic stealing, or fake attribution. This leads to misattribution and skewed ROAS numbers.
Worth a moment of caution as we step into 2025.
By Debsena Chakraborty, Vice President – Growth EMEA, mFilterIt.
