Much was written about iOS 14 and the inevitable demise of the IDFA and user-level tracking. Instead of writing more of the same, this note will explore an angle that the mobile marketing and growth industry is not widely discussing.
There are three major implications of the deprecation of the IDFA (when enforced by Apple early next year):
- Loss of user-level mobile advertising measurement – without the IDFA, it’ll be near impossible to tie a user to the ad they tapped on prior to installing, as well as tying the resulting revenues generated by that user to the cost of the ad. Without it, calculating return-on-ad-spend (ROAS) won’t be possible in an accurate way.
- Loss of ability to run highly targeted ads – without using the IDFA to identify specific users/devices that performed certain actions within an app, and report those IDFAs back to an ad network so it can create an ad audience that closely resembles those users (Lookalike audiences), it’ll be extremely hard to reach a very high quality audience with ads. Without the IDFA, ads will be served to a much broader audience.
- Loss of ability to retarget – as a consequence of point #2, it’ll also be an impossible request from an ad network to reach a specific list of users/devices using the IDFA, which means the ability to retarget will be lost.
In my view, what’s missing in today’s conversations among mobile growth experts is a thriving discussion about point #2. So let’s try to break down what it means, and what you can do about it to minimize the disturbance to your mobile growth curve.
Do ads create or accelerate demand?
Imagine a user that’s quietly looking at shoes online. They’re not ready to buy just yet, and they’re in a pretty early stage in their buyer’s journey. They check out a pair of shoes on a certain website, add it to the cart, and then abandon it. They go on with their day, but keep seeing ads for the same shoe store, for those same exact pair of shoes. After seeing it five times across the internet and social media, the user responds to the ad, and purchases the shoes.
The fact that the user was exposed to an ad didn’t necessarily create the demand for that pair of shoes, after all, something caused the user to look at shows in the first place. But, without the ad, they would likely:
- Take much longer to finish the buyer’s journey. Meaning the ad significantly shortened that time.
- Evaluate other products (more shoes). The fact the user was exposed to an ad about a specific pair of shoes, directed demand in a particular direction.
So in this case, an ad had two values. It accelerated demand, as well as shifting that demand towards a particular product.
But not all products are like shoes, a necessity as well as a fashion item.
Take mobile games. Now imagine a second user who’s bored. To alleviate that boredom, the user logs into Facebook, as this is the user’s main habit for curing boredom. The user watches videos, reads posts, and interacts with other people through comments. Suddenly, the user views an ad for a mobile game. As they’re bored and are looking for entertainment, they respond to the ad, install the game and try it out.
What happened in this case? A user didn’t have initial demand for a game necessarily, just for entertainment. And because the ad existed, the ad shifted the demand for entertainment towards a particular product (a mobile game). If the ad didn’t exist, it’s unlikely that the user would’ve ever discovered that specific game.
So the presence of ads is likely to drive demand for mobile games, not by creating the initial trigger for that demand, but by shifting that demand for entertainment towards mobile games.
What happens when ads can’t be specifically targeted?
Now let’s take this case one step further. Let’s say that this mobile games user is not just any user. They’re a user that a social media company knows (having collected data on that specific user) that’s likely to play mobile games, and also make in-app purchases.
They know that the user is one who, when presented by a mobile game ad, will likely agree to fulfill their need for entertainment by installing it and probably investing some money into it. This is the kind of user every company wants.
Without Facebook, or any other ad network’s ability to construct an audience of people that share their characteristics with this user, the advertiser will serve the ad to a much broader audience.
That might include:
- People that don’t have the initial demand for entertainment.
- People that are likely to fulfill their demand for entertainment in other ways (let’s say watching other people play, watching a show on Netflix, reading a new book on Kindle, or listening to a podcast).
App Store and ad creatives as a quality qualifier
So what’s going to happen next? What’s the implication of serving an ad to a broader audience?
In most cases, a broader audience will also include the target audience. But for most companies and teams it’s not feasible to reach each and every person in that broad audience, which will require significantly larger budgets and push the average cost per install much higher.
So what can influence the type of users that respond to the ad? What can make some people respond and some people continue scrolling through?
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With this new era of broader targeting, the ad creatives will assume an old/new role of qualifying the audience. As with any ad in the world, different marketing messages will attract different people. As ad networks will optimize mostly towards installs (and some very limited downstream metrics coming in through the conversionValue field in SKAdNetwork) both the ad and the app store page creatives can be crafted in a way that appeals to the high-quality, targeted audience you’re after.
By doing so, paid user acquisition efforts will have to include more extensive experimentation with ad creatives and app store creatives, to ensure ads do in fact attract the high-quality audience that these efforts are aimed at.
Without this experimentation, broad campaigns and ads have the potential to consume most of the budget on low-quality users that will not translate to driving crucial KPI growth such as DAU/MAU, revenues, retention and more.
Instead of converting users from a very high-quality pool (a good LAL audience), these ads will convert a high percentage of low-quality users which will harm the UA budget profile from an ROI perspective.
How to win a competitive edge in this new landscape
If, in the past, the ad network itself took over the role of understanding which creatives will work best to attract a high-quality audience (based on your definition of quality, reported back to the ad network as in-app events), in the future they’ll lack most of that functionality.
Any user acquisition and growth team will need to focus on making sure the marketing message conveyed through your ad and app store page creatives does attract high-quality users.
In other words, the qualification step of the UA process, ensuring that UA results in growth of high-quality users falls one step below. Instead of the ad network ensuring that by making sure only a high-quality audience is exposed to the ad, you as an app/game UA manager need to assume that role by making sure that mostly high-quality users go through the entire funnel which will result in the continuous growth of high-quality users.
This qualification will happen both on the ad creative level, as well as on the app store page creative level. Both can act as “filters” that’ll attract the audience you care about.
We have a few more months before Apple enforces the new privacy framework that will prevent access to IDFA without an, informed, opt-in, user consent.
Among the many preparation tasks you have in front of you, it’s crucial that you gather as many learnings as possible about which creatives and marketing messages result in high-quality installs and users.
Moreover, plan for extensive experimentation in the near future, and ensure you have plenty of room for it as a component within your UA budget.
Only by doing so, can you mitigate as much as possible any potential hit to your growth trajectory.
In the next article in this series, we’ll discuss the methodologies and tech that you need to embrace to have a world-class experimentation process, one which will always lead you to the most impactful creatives to deploy through ads and in the app store.