In the eye of the hurricane, to quote Lin-Manuel Miranda channeling Alexander Hamilton, there is quiet. Four weeks have elapsed since the launch of iOS 14.5* and with it, the ATT (AppTrackingTransparency). And so far, the reaction of the marketing industry seems subdued.
Contrasting the amount of pre-launch noise to what’s happening now, a bystander might assume that there was much ado about nothing. Yet, there’s no panic, no hair pulling, and many advertisers don’t even present their tracking prompts to significant parts of their audience yet.
One of the likeliest explanations for the seemingly low angst around ATT is that its adoption rate is still very low. As of late last week, Branch Metrics saw ~25% adoption for iOS 14.5+. That can explain why the alarm bells aren’t ringing, even though Flurry Analytics sees a measly 15% worldwide opt-in rate, with only 6% for the US.
Don’t be fooled by the relative quiet. As a whole, the industry is indeed in a holding pattern. It will be a while before we can fully judge the impact of ATT. But below the surface, budgets are moving, and new strategies are tested. Marketers are cautiously exploring iOS 14.5 marketing, as well as alternatives.
Here are some of the things we at Bidalgo are seeing:
- Advertiser budgets have shifted to Android at the expense of iOS, leading to an increase in CPMs on Android
- Budgets are shifting to ad networks and Apple Search Ads
- CTR decreasing on iOS
- Overall budget spend is stable and aligned with previous years’ seasonality
- Advertisers are focusing more on specific country targeting, possibly targeting more iOS 14.4 and down users, while the iOS 14.5 rollout has been slow on adoption
But what does all of this mean for marketers? Seeing numbers change is one thing; extracting meaningful and actionable insights from those numbers is an entirely different matter altogether. Here are some of our insights.
*Applies to iPadOS as well.
Insight 1: New to Ad Networks? Want to Experiment? Act Fast
The data: Budget allocation to ad networks increased by six percentage points in the past month, driven by 24% of the apps we track increasing their ad network budgets. The numbers are similar for worldwide and US activity. Budget allocation to Apple Search Ads increased as well.
Why it matters: Some of the competitive advantage social platforms had over ad networks is gone on SKAdNetwork campaigns. With no optimization based on the lower-funnel activity available, advertisers are reconsidering the budget split. This process isn’t immediate, but it’s bound to accelerate.
As with everything, ad network activity begins with a learning period. The experimentation is bound to become more expensive in the coming weeks and months.
Insight 2: The CTR Impact Is Real. Look at Creative.
The data: CTRs are decreasing across the majority of iOS campaigns we track. Changes like these, which happen across the board, are significant enough to indicate platform-related shifts, rather than strategy adjustments by one or several clients.
Why it matters: Before the launch of iOS 14.5, the common wisdom was that the click-through rates would drop. With no retargeting available for iOS 14.5 users, and fewer ties between upper and lower funnel data, targeting optimization is less efficient than a month ago.
Will the CTRs climb back? To a degree, yes. Marketers and publishers will find proxy metrics to base their optimization on, and more relevant ads will be delivered to audiences. Another thing that will happen is the reliance on creative assets to drive CTRs up when the targeting is automated and broad. The best marketers will use it as a segmentation tool to attract the right audiences while purposefully trying to seem less attractive for everyone else to avoid waste.
Insight 3: Expanding to Android? Be Prepared for Increased Costs
The data: The budgets, the CPMs, the CPIs on Android are growing across the board. While some digital publishers are affected more than others, each case still represents a double-digit growth.
Why it matters: Hardly surprising, but Android is suddenly much more appealing for marketers. While historically Android users are less profitable than iOS users, on Android, you can still connect upper and lower funnel data, retarget and do everything that requires user identifiers — without explicit consent.
Will this last? For now, yes. In the long run, though, probably not. Google is planning to talk about its version of ad privacy tools for Android this year, even though it refrained from announcing anything concrete during its yearly developer conference, Google I/O. Regulatory scrutiny and shifting public sentiment are bound to reduce the reliance on user-level data across the entire industry.
Insight 4: Advertisers are shifting budgets away from iOS. Don’t forget that the users are still the same as they were a month ago.
The data: On each of the major channels, we see over 50% of our clients decreasing their iOS budgets, while the overall amount of tracked budget data follows the standard yearly trend.
Why it matters: At Bidalgo, we see no meaningful changes in overall marketing budgets outside of the week after iOS 14.5 launched. Even a week later, the budgets rebounded. And year-over-year, aside from that dip, there are no statistically significant changes in marketing activity level.
That said, when looking at iOS marketing budgets, a statistically significant dip is visible across all major publishers: Facebook, Snapchat, Google, Apple, and Tiktok. Among all these, ad networks are the least impacted, and Google had the highest impact.
But while the ability to target is diminished, the users are the same as before — still willing to pay more than their Android counterparts. So if you do have efficient upper-funnel proxy metrics for lower-funnel success, now is the time to utilize them.
Insight 5: Want to Scale iOS Testing? The CPMs Are Dropping Across The Board
The data: On major channels, such as Facebook and Google, more than 60% of our clients saw their iOS CPMs decrease. It’s cheaper than it was a month ago to show ads to iOS users.
Why it matters: Drops in CPMs for iOS users were among the more predictable consequences of the ATT. With a decrease in the ability to target the right user, the value of each ad view is diminishing. And as expected, the drop is far more pronounced when looking at Facebook, Google, and TikTok.
One interesting byproduct of this drop is that creative testing, especially when the tests are related to segmentation hypotheses, is cheaper than before. Want to see which assets bring you the right users without wasting too much money? Now’s the time to do it.