Scenario Planning for UA Budgets (2025 Framework)

Most UA budgets fail the moment market conditions shift.

Teams build a single forecast based on current performance and hope it holds. When CPIs spike, conversion rates drop, or platform policies change, the plan collapses.

The problem isn't inaccurate forecasting. It's planning for a single outcome in an environment defined by volatility.

Effective UA budget planning requires multiple scenarios that prepare for different futures. You need frameworks that anticipate change, not just extrapolate the present.

Here's how to build resilient budget scenarios that keep your growth on track regardless of market conditions.

Why Single-Point Forecasts Fail

Traditional budgets are built on fixed assumptions:

• CPI will average $3.50 across channels
• Conversion rates will hold at 5%
• We'll scale spend 15% per quarter
• LTV will remain stable at $180

The instant any assumption breaks, the entire budget becomes obsolete.

Recent examples of forecast-breaking events:

• iOS 14.5 privacy changes increased CPIs 20-30% overnight
• Q4 2024 holiday competition drove CPIs up 35% year-over-year
• TikTok algorithm updates shifted conversion rates 15-25% within weeks
• Economic uncertainty reduced consumer spending, lowering LTV 10-20%

Single-point forecasts create a false sense of precision while leaving teams unprepared for likely outcomes.

The Three-Scenario Framework

Scenario planning models multiple possible futures with different probability weights.

The standard framework uses three scenarios:

Conservative Scenario (70% confidence)

Models adverse conditions where performance deteriorates from baseline.

Typical assumptions:

• CPI increases 20-30%
• Conversion rates decline 10-15%
• LTV decreases 5-10%
• Channel capacity constraints tighten
• Competition intensifies

Use case: Budget planning, cash flow management, board reporting

This is the scenario you should be able to execute without crisis intervention. If the conservative case delivers acceptable outcomes, your budget is resilient.

Base Scenario (50% confidence)

Reflects current performance and assumes conditions remain stable.

Typical assumptions:

• CPI matches recent 30-60 day averages
• Conversion rates hold steady
• LTV remains consistent
• Channel capacity remains available
• Competitive dynamics stable

Use case: Operational planning, monthly targets, team goals

This is your working forecast for day-to-day execution.

Aggressive Scenario (30% confidence)

Models favorable conditions where optimization and market opportunities improve performance.

Typical assumptions:

• CPI improves 15-25% through optimization
• Conversion rates increase 10-15% from product improvements
• LTV increases 10-20% from better retention
• New channels unlock additional capacity
• Market conditions favor growth

Use case: Upside planning, fundraising, stretch goals

This scenario helps you capture opportunities when markets shift in your favor. It's not the plan, but it defines what's possible.

Building Your Scenarios: Step-by-Step

Here's how to construct budget scenarios for your specific app.

Step 1: Document Baseline Assumptions

Start with current performance metrics across your conversion funnel.

Required baseline data:

Metric	Current Performance
Average CPI (iOS)	$3.80
Average CPI (Android)	$1.40
Blended CPI	$2.85
Install-to-activation rate	62%
Activation-to-paid conversion	5.2%
30-day LTV	$48
90-day LTV	$165
LTV:CAC ratio	3.2:1
Monthly budget	$75,000
Monthly installs	26,315

This establishes your base scenario foundation.

Step 2: Identify Key Variable Drivers

List the factors that could significantly impact each metric.

Common drivers:

CPI variables:

• Seasonal competition (Q4 spike, January recovery)
• Platform policy changes (privacy updates, algorithm shifts)
• Competitor spend increases/decreases
• Creative fatigue and refresh cycles
• Targeting expansion or contraction

Conversion rate variables:

• Product improvements or bugs
• Onboarding flow changes
• Pricing or offer modifications
• User quality shifts by channel
• Market demand fluctuations

LTV variables:

• Retention improvements or degradation
• Monetization changes (pricing, IAP, ads)
• Feature releases that drive engagement
• Competitive alternatives
• Economic conditions affecting spending

Document which variables have the highest impact and the widest probable range.

Step 3: Build Conservative Scenario

Model what happens when multiple variables move against you simultaneously.

Conservative assumptions (vs. base):

Metric	Base	Conservative	Change
iOS CPI	$3.80	$4.75	+25%
Android CPI	$1.40	$1.75	+25%
Blended CPI	$2.85	$3.56	+25%
Install-to-activation	62%	54%	-13%
Activation-to-paid	5.2%	4.4%	-15%
30-day LTV	$48	$43	-10%
90-day LTV	$165	$150	-9%
LTV:CAC ratio	3.2:1	2.3:1	-28%

Budget implications:

To maintain 26,315 installs/month at $3.56 CPI:

• Required budget: $93,680 (+25% vs. base $75K)

To maintain $75K budget at $3.56 CPI:

• Achievable installs: 21,067 (-20% vs. base)

The conservative scenario forces a decision: increase budget or accept lower volume.

Step 4: Build Aggressive Scenario

Model what happens when optimization and market conditions align favorably.

Aggressive assumptions (vs. base):

Metric	Base	Aggressive	Change
iOS CPI	$3.80	$3.00	-21%
Android CPI	$1.40	$1.10	-21%
Blended CPI	$2.85	$2.25	-21%
Install-to-activation	62%	70%	+13%
Activation-to-paid	5.2%	6.0%	+15%
30-day LTV	$48	$55	+15%
90-day LTV	$165	$190	+15%
LTV:CAC ratio	3.2:1	4.7:1	+47%

Budget implications:

At $75K budget and $2.25 CPI:

• Achievable installs: 33,333 (+27% vs. base)

At improved conversion (70% × 6.0% = 4.2% overall):

• Paying customers: 1,400 vs. 847 in base (+65%)
• Revenue impact: $77K vs. $47K (+64%)

The aggressive scenario reveals upside potential if you can execute optimization successfully.

Step 5: Model Budget Requirements Across Scenarios

Calculate required budget to hit growth targets under each scenario.

Example: Target of 30,000 installs/month

Scenario	CPI	Required Budget	vs. Base
Conservative	$3.56	$106,800	+42%
Base	$2.85	$85,500	baseline
Aggressive	$2.25	$67,500	-21%

Example: Target of $100K MRR

Assuming $30 ARPU requires 3,333 paying customers monthly.

Scenario	Conversion	Required Installs	CPI	Budget
Conservative	2.38%	140,000	$3.56	$498,400
Base	3.22%	103,500	$2.85	$295,000
Aggressive	4.20%	79,350	$2.25	$178,540

This reveals the budget range you need to plan for based on probable outcomes.

Defining Scenario Trigger Points

Scenarios aren't static. You need clear signals that indicate when to shift from one scenario to another.

Trigger Metrics and Thresholds

Shift to Conservative scenario when:

• Blended CPI increases 15%+ for 2 consecutive weeks
• Conversion rates drop 10%+ month-over-month
• LTV:CAC ratio falls below 2.5:1 for 3 weeks
• 30-day ROAS drops below 0.8 across primary channels
• Channel CPMs increase 20%+ (competition surge signal)

Shift to Aggressive scenario when:

• Blended CPI decreases 15%+ for 2 consecutive weeks
• Conversion rates increase 12%+ month-over-month
• LTV:CAC ratio exceeds 4:1 for 3 weeks
• 30-day ROAS exceeds 1.3 across primary channels
• New channel tests show 40%+ better economics than incumbents

Return to Base scenario when:

• Metrics stabilize within 10% of baseline for 3+ weeks
• Temporary market volatility resolves (post-holiday normalization)
• Optimization efforts return performance to expected ranges

Operational Response Plans

For each trigger, define operational responses:

Conservative scenario activation:

• Reduce daily budgets 15-25% across underperforming channels
• Shift budget to highest-performing channel
• Pause experimentation budget and reallocate to proven channels
• Tighten targeting to highest-LTV segments
• Accelerate creative refresh cycles
• Implement stricter fraud detection

Aggressive scenario activation:

• Increase daily budgets 20-30% on top-performing channels
• Expand targeting to broader audiences
• Accelerate testing of new channels
• Increase experimentation budget from 10% to 15%
• Launch additional campaigns in secondary markets
• Test premium placements and higher bids

Scenario Planning by Time Horizon

The appropriate scenarios vary by planning timeframe.

Monthly Scenarios (Tactical)

Focus on operational execution under current market conditions.

Key variables:

• Weekly CPI fluctuations
• Creative performance decay
• Channel-specific algorithm changes
• Immediate competitive moves

Variance range: ±10-15% from base

Quarterly Scenarios (Strategic)

Balance sustained performance trends with strategic initiatives.

Key variables:

• Seasonal patterns (Q4 spike, Q1 recovery)
• Product roadmap impact on conversion
• New channel ramp-up timelines
• Market expansion plans

Variance range: ±20-25% from base

Annual Scenarios (Long-term)

Model fundamental shifts in market structure and business model.

Key variables:

• Platform policy changes (privacy, attribution)
• Category maturation and saturation
• Business model evolution (pricing changes)
• Major product pivots or launches

Variance range: ±30-40% from base

Real-World Scenario Example

Context: Productivity app, $150K monthly UA budget, targeting $500K MRR by Q4

Base Scenario

Current state:

• Blended CPI: $2.95
• Install-to-paid: 4.8%
• 90-day LTV: $175
• Monthly installs: 50,850
• Paying customers: 2,440
• MRR: $73,200

Q4 projection (base):

• Monthly budget: $150K
• CPI: $2.95
• Installs: 50,850
• Conversion: 4.8%
• New customers: 2,440/month × 4 months = 9,760
• Total customer base: 12,200
• Projected MRR: $366,000

Gap to goal: $134K MRR shortfall

Conservative Scenario

Assumptions:

• Q4 CPI increases to $3.75 (+27%)
• Conversion drops to 4.1% (-15%)
• LTV declines to $160 (-9%)

Q4 projection (conservative):

• Monthly budget: $150K
• CPI: $3.75
• Installs: 40,000
• Conversion: 4.1%
• New customers: 1,640/month × 4 months = 6,560
• Total customer base: 9,060
• Projected MRR: $271,800

Gap to goal: $228K MRR shortfall

Strategic response:

• Increase budget to $195K/month to maintain volume
• Or accept lower growth target of $320K MRR
• Shift 20% of budget from Facebook to ASA (lower CPI)
• Pause market expansion, focus on core geographies

Aggressive Scenario

Assumptions:

• New creative tests reduce CPI to $2.40 (-19%)
• Product improvements lift conversion to 5.5% (+15%)
• LTV increases to $200 (+14%)

Q4 projection (aggressive):

• Monthly budget: $150K
• CPI: $2.40
• Installs: 62,500
• Conversion: 5.5%
• New customers: 3,437/month × 4 months = 13,750
• Total customer base: 16,250
• Projected MRR: $487,500

Gap to goal: $12.5K shortfall (97.5% of goal)

Strategic response:

• Increase budget to $155K in final month to close gap
• Accelerate product improvements that drove conversion lift
• Scale winning creative formats aggressively
• Expand testing budget to discover additional efficiency gains

Common Scenario Planning Mistakes

Too many scenarios: Three is optimal. More creates analysis paralysis.

Scenarios too similar: If conservative and base differ by less than 15%, you're not planning for meaningful variance.

No trigger metrics: Scenarios without activation thresholds become theoretical exercises.

Static scenarios: Update assumptions monthly as actuals reveal which scenario is materializing.

Over-optimizing for best case: Plan and budget for conservative scenario, capture upside when aggressive scenario plays out.

Ignoring black swan events: Build a fourth "crisis" scenario for extreme events (platform bans, major bugs, PR disasters).

Tools and Templates

Scenario modeling tools:

• Google Sheets with scenario tabs and formula-linked assumptions
• Excel with scenario manager and data tables
• Financial planning platforms (Mosaic, Drivetrain, Pigment)
• BI tools (Looker, Tableau) with parameter-based scenario switching

Template structure:

• Tab 1: Assumptions dashboard (adjust variables, see all scenarios update)
• Tab 2: Conservative scenario with monthly breakdown
• Tab 3: Base scenario with monthly breakdown
• Tab 4: Aggressive scenario with monthly breakdown
• Tab 5: Comparison dashboard across scenarios
• Tab 6: Trigger metrics tracking

Final Framework

Use this process to build UA budget scenarios:

1. Document current baseline across all key metrics
2. Identify variable drivers with highest impact potential
3. Build conservative scenario assuming 20-30% deterioration
4. Build aggressive scenario assuming 15-25% improvement
5. Calculate budget ranges required to hit targets across scenarios
6. Define trigger metrics that signal scenario shifts
7. Create response plans for each scenario activation
8. Review monthly and update assumptions based on actuals
9. Report to stakeholders using scenario ranges, not single forecasts

Scenario planning transforms budget forecasting from a precision exercise into a preparedness framework.

FAQs

What scenarios should I plan for in UA budgets?

Build three core scenarios: Conservative (70% confidence), Base (50% confidence), and Aggressive (30% confidence). Conservative prepares for adverse market conditions, Base reflects current performance, and Aggressive captures potential upside from optimization.

How much variance should I model between scenarios?

Typical variance ranges: Conservative scenarios assume 20-30% worse performance than baseline, while Aggressive scenarios model 15-25% improvement. Larger variance may be appropriate for new apps or volatile markets.

How often should I update budget scenarios?

Review scenarios monthly and update assumptions quarterly. If actual performance triggers predefined thresholds (e.g., CPI increases 20%+ or conversion drops 15%+), activate alternative scenarios immediately.

Should I budget for conservative or base scenario?

Budget for conservative scenario to ensure cash flow resilience. If base or aggressive scenarios materialize, you have upside capacity to scale spend. Budgeting for aggressive scenarios creates risk if markets don't cooperate.

What if actual performance falls outside all scenarios?

This signals your assumptions were fundamentally wrong. Pause and reassess: What changed? Is this temporary volatility or structural shift? Update scenarios with new baseline and validate assumptions before resuming scaled spend.

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UA budget scenarios transform static plans into adaptive frameworks. Build multiple futures, define what triggers them, and create response playbooks that let you execute confidently regardless of market conditions.