- AppTrackingTransparency (ATT) changed how the mobile ad industry approaches monetization and measurement.
- Here’s a look at how ATT has affected mobile app publishers and advertisers’ monetization models, budget allocations, and measurement strategies.
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The rollout of AppTrackingTransparency (ATT) in iOS 14.5 effectively deprecated the primary way mobile app publishers and advertisers track users on iOS and changed how the mobile ad industry approaches monetization and measurement.
Insider Intelligence takes a look at how ATT has affected mobile app publishers and advertisers’ monetization models, budget allocations, and measurement strategies, and an exploration of changes driving the best results.
Mobile apps’ slow shift away from third-party data
Third-party data is still the bulk of many smaller platforms’ and mobile app publishers’ business—as well as Big Tech platforms with audience networks like Meta, Snap, and LinkedIn. Some players are looking for ways to replicate pre-ATT results.
LinkedIn is testing the use of artificial intelligence (AI) to measure conversions. Other platforms like Meta, alongside some adtech firms, already use similar probabilistic models. These generally use machine learning to approximate the connection between seeing an ad and downloading an app, rather than using data to definitively link the two. In the meantime, LinkedIn has also released group targeting tools for B2B marketers.
Snapchat’s Advanced Conversions tool collects aggregated data. Because the tool doesn’t link identifiable information to specific users, it doesn’t need to ask for permission, effectively circumventing ATT. However, some critics have opposed this practice, calling it a privacy-unfriendly workaround.
Fingerprinting is still in use, despite Apple’s warnings. This tactic involves collecting information about a mobile app user’s device, such as its make and model, to create a “fingerprint” of the device rather than using an approved identifier like the IDFA. Unlike aggregated data solutions, however, fingerprinting can link data to an individual device. Apple has spoken out against the practice, but enforcement has been slow.
First-party data for mobile app publishers is more important than ever
Gathering data directly from the consumer has become critical. Growing email lists with newsletters is the most popular option for gathering first-party data: 63% of US marketers and agencies were already doing so as of June 2021, per LiveIntent in partnership with Advertiser Perceptions. However, marketers are using a range of strategies, from content marketing to sweepstakes promotions.
If collecting first-party data isn’t an option, shifting ad spending to walled gardens is another alternative. The popularity of this option is evident in the massive increase in the cost of advertising on platforms like Facebook or Google. In addition to the previously mentioned increase in Facebook CPMs, the cost per click for Google Search ads increased 41% between Q3 2020 and Q3 2021, per Merkle.
Android’s more lenient privacy policies have greatly increased mobile app install spending on the platform. Android 12 rolled out October 2021 with several new features, including a new Privacy Dashboard that allows users to easily change permissions. But its changes are far less disruptive than ATT, namely because tracking permissions will remain opt-out instead of opt-in.
The mismatch in tracking ability has resulted in Apple’s share of mobile app install spending dropping nearly 15 percentage points in just a few months, according to mobile analytics firm Singular.
At its 2021 peak in the week of February 2 to 7, iOS claimed 43.8% of app install spending worldwide. (Importantly, Singular notes that iOS spending may have been inflated in the months leading up to April, as advertisers tried to squeeze in last-minute campaigns before ATT went into effect.)
By the week of June 14 to 20, about a month and a half after iOS 14.5 debuted, Apple’s share had dropped to just 29.7%, as Android claimed the remaining 70.3%.
In mid-February 2022, Google announced plans to bring its Privacy Sandbox initiative to Android and eventually replace its Advertiser ID with privacy-friendly alternatives. Over time, this could make Android less of a clear-cut alternative to allocate spend—but again, the changes will take time and likely be less drastic than Apple’s, given Google’s stake in the digital ad market is far higher.
Contextual advertising has also seen a big bump. Contextual ads don’t use data for targeting, instead basing ads on the content of a site or app—a food blog may show ads for kitchen appliances, for example. More than 6 in 10 (61%) mobile app publishers worldwide said they saw at least a slight increase in spend on contextual campaigns, according to an August 2021 report by Digiday and Connatix.
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Some mobile app publishers are leaning into alternative revenue streams
Alternative monetization models are gaining traction with mobile app publishers of all sizes. Big Tech platforms and small game developers alike are trying strategies like ecommerce, subscriptions, and in-app purchases to bolster revenues in the face of waning ad effectiveness.
Meta is aggressively pursuing ecommerce. “As Apple’s changes make ecommerce and customer acquisition less effective on the web, solutions that allow businesses to set up shop right inside our apps will become increasingly attractive,” CEO Mark Zuckerberg said during the company’s Q3 2021 earnings—likely a play to boost retailers’ adoption of Facebook and Instagram Shops.
Twitter has debuted several subscription options. Twitter Blue, its platform-wide subscription option, gives users access to features like an undo button and an ad-free reader mode. Super Follow lets users subscribe to individual creators in exchange for premium content, with Twitter taking a cut.
Gaming app publishers are more likely to experiment with alternative monetization routes. According to an October 2021 survey by AdColony and Fyber, 39% of gaming app publishers worldwide monetized via in-app purchases, compared with just 6% of nongaming apps. That was the most common method of diversifying revenue streams, but gaming apps are also far more likely than nongaming apps to monetize via subscriptions, rewarded ads (or offerwalls), and affiliates, for example.