Case Study Guaranteeing ROAS through Dynamic, Data-Driven Cash Back

To further their growth, a leading Home & Garden brand sought a solution to enhance performance and drive sales while balancing a healthy return on ad spend (ROAS). Recognizing the potential of its Rakuten program, the brand partnered with Rakuten in July 2024 to implement Programmatic Loyalty — a new, industry-first ad solution that delivers performance-driven outcomes by leveraging AI technology and Rakuten’s extensive first-party data from millions of shoppers, guaranteeing a return on ad spend (ROAS).

To address their growth needs, the brand needed to achieve both ROAS and Gross Merchandise Value (GMV) targets. To do this, they focused on leveraging data to better anticipate changes in consumer behavior and more accurately adjust Cash Back rates and media placements to target the right audiences.

Programmatic Loyalty guarantees that brands meet their ROAS target each month by dynamically adjusting Cash Back rates, media exposure, and promotional participation, all based on audience behavior and engagement.

Rather than elevating the brand’s Cash Back rate for all Rakuten members, Programmatic Loyalty uses Rakuten’s first-party data—such as member behavior and current sales trends—to dynamically adjust Cash Back rates for audience segments. These tailored rates are deployed to specific audience segments, ensuring each shopper is targeted with the most effective Cash Back rate. This approach allows Rakuten to manage the brand’s budget and meet their ROAS goal.

The brand kicked off its first Programmatic Loyalty campaign during the July 2024 pilot, with Rakuten deploying multiple Cash Back rates and dynamically adjusting media to meet their monthly campaign goal. Following a successful pilot, they participated in Programmatic Loyalty campaigns from July through December 2024.

To build the campaigns, Rakuten and the brand aligned on estimated GMV targets and guaranteed ROAS goals for each month. Rakuten developed customized forecasts to show different spending scenarios and their corresponding outcomes:

• A smaller budget with a lower cost per activation drives a high ROAS but lower estimated sales volume.
• A higher budget with a higher cost per activation drives a lower ROAS but higher estimated sales volume.

Throughout each monthly campaign, the Programmatic Loyalty tool dynamically optimized the budget to guarantee the brand’s ROAS goal by adjusting Cash Back rates. This optimization typically involved several strategic adjustments, such as:

• When performance data indicated the need to accelerate sales to meet the guaranteed ROAS goal, the average Cash Back rate would automatically increase. This adjustment exposed a larger segment of Rakuten members to elevated Cash Back offers, driving conversions and ensuring the campaign stayed on track to meet its target.
• When the campaign was pacing above the guaranteed ROAS and budget, the Programmatic Loyalty tool would proactively lower the average Cash Back rate. This adjustment optimized efficiency by serving a broader audience at a lower but still effective rate, while upholding the ROAS commitment.

Throughout the campaigns, the brand was prominently featured in Programmatic Loyalty placements across Rakuten’s app, website, and emails to drive visibility and engagement with audiences.