How should mobile advertisers react to the impact of increasing iOS 14.5+ adoption?

iOS 14.5 iOS 14.5+ adoption has moved past the 60% mark and with it, the demise of Apple’s IDFA – the identifier that in-app advertisers use to measure and tweak their campaigns. The impact of the loss of IDFAs is beginning to be felt. How should app advertisers adjust? Shumel Lais, Founder & CEO of unified analytics and performance marketing firm, Appsumer, explains the options…

iOS 14.5+ adoption has reached a critical mass in recent weeks and the not-so-good news for advertisers is that only around 20% of all app users are allowing advertisers access to their data.

As a result we are seeing mobile app advertisers increasingly shift budgets from iOS to Android. And perhaps interestingly, research has shown that smaller advertisers are switching budgets at a faster rate than larger advertisers.

Delving into the data further, we’ve also seen that more budgets are switching to Android on major Self Attributing Networks (SANs) like Facebook, Google, TikTok and Snapchat. These channels rely on user-level IDs like the IDFA to power their algorithms and target high-value users. Therefore, with the IDFA increasingly disappearing, advertising on these networks on iOS is becoming less effective. That said, our research also shows that the overall Share of Wallet is remaining steady with budgets mostly moving between Android and iOS on the same channels.

So, what does this mean for mobile app advertisers?

Invest energy in setting up SKAdNetwork (SKAN) as best as possible

With IDFAs disappearing, traditional attribution is also now struggling. Currently, only around 10% of app installs in iOS 14.5+ have dual opt-in on the advertiser and publisher side. This means that only 10% of installs are attributable in iOS 14.5+ using Mobile Measurement Partners (MMPs).

Ultimately, whilst ad spend movements are still marginal, mobile app advertisers are starting to react to iOS 14.5+ adoption increasing and can now feel the impact of the loss of IDFAs.

SKAN is Apple’s privacy-friendly attribution solution. Whilst it has some shortcomings, Apple is gradually upgrading functionality and it’s a solution mobile app advertisers will have to get to grips with to continue effective measurement in iOS 14.5+. Indeed, it will become particularly prominent in iOS 15 as many advertisers who have naively thought they can rely on fingerprinting will be hit hard at this point.

With that in mind, there are a couple of important things to understand when building a measurement solution for iOS around SKAN:

1. SKAN numbers in reporting interfaces from the likes of Facebook and Google won’t match an MMP because of modelling and opinionated logic across them. Luckily Apple will share the raw numbers directly with advertisers when they release iOS 15, however, it’s important to think about how to translate this data into something useful whether that’s in a MMP, proprietary tech or another third-party tool.

2. An important component of SKAN is the Conversion Value logic. This gives advertisers signals of the value of users driven by campaigns. There are many ways to set this up, but early lessons suggest that the simpler approach is the best for now. For example, many are simply starting out by tracking six events early in the onboarding flow that give a good signal of long-term value of a user.

3. SKAN on its own is proving not to be enough for mobile app advertisers. As a result, there are a couple of areas to consider investing in to make it more effective. For example, predictive modelling of SKAN data gives better metrics to understand the longer-term value of users coming from different campaigns. That said, getting a single performance view of the SKAN data alongside data from Android and older versions of iOS is hard. Most MMPs have these separated and with so many signals coming from different sources there is no longer such a thing as a single source of truth. This is why many mobile app advertisers are investing heavily in business intelligence solutions to create this single performance view. Whether they build this in-house or buy a third-party mobile app advertising intelligence solution off-the-shelf varies depending on their size and the resources they have available.

Further diversify media spend

The likely reason why larger advertisers haven’t had to shift budget from iOS to Android is that they had a much more diversified media mix. Whilst the duopoly of Facebook and Google have seen spend move to Android as the lack of user-level IDs has a negative impact on performance, other channels have been less impacted. On the flip side, smaller spenders largely put all their eggs in the duopoly basket and as a result they have been harder hit.

Mobile app advertisers, no matter the size, should therefore be looking to further diversify their media mix to limit exposure to market volatility. Broader mobile ad networks appear to be less impacted due to a lesser reliance on user IDs, as has Apple’s own Search Ads solution. From an advertising perspective, also investing in more contextual and audience-based ad formats will likely pay dividends as privacy enforcement increases. Similarly, advertisers should explore more organic options like App Store Optimisation (ASO) and influencer marketing.

Ultimately, whilst ad spend movements are still marginal, mobile app advertisers are starting to react to iOS 14.5+ adoption increasing and can now feel the impact of the loss of IDFAs. Those that fall back on fingerprinting in the short-term risk falling behind long-term. It’s time to adjust to this new normal and get the right measurement tools in place. Only then will you reap the rewards.

iOS 14.5Shumel Lais, Founder & CEO, Appsumer