I used to have a problem with pancake makeup looking too dry and not going on smoothly. I asked my best friend about it who is very good at makeup and she told me to wet the sponge before applying. I run the sponge under the faucet, squeeze out excess water and then pat it on the makeup and apply it.
It makes such a difference! It goes on very smoothly, covers perfectly and looks great now. I also make sure to moisturize my face properly beforehand. Pancake makeup is very good when applied this way!