The app developer community might have breathed a sigh of relief after Apple delayed the launch of its IDFA privacy updates to 2021, but with the New Year fast approaching, strategies on how to thrive in the post-IDFA world need to be put in place now.
Apple devices provide the capability to monitor ad interaction, control personalization, and track app analytics. The device, not the user, is tracked by default using an identifier called IDFA (Identifier for App Advertisers). Next year a privacy update to iOS will mean users have to opt in to allow each app to track information. Allowing people to opt out will affect how app marketers monitor and run their re-targeting campaigns.
Bango held a webinar, bringing together a panel of UA experts to discuss the impact of these changes – and uncover the opportunities for app developers. We were joined by Hannah Parvaz from audio content app Curio, Mack Grenfell from Babylon Health, Jason Yim from media agency PHD Media and Jin Soo Lee from Korean giant, NHN ACE.
Opportunities for In-App Purchase revenues
Even before the IDFA update takes place, the way app developers monetize has already changed in 2020. Research shows app marketers are spending 10% less on In-App Advertising (IAA). However, revenues from In-App Purchases (IAP) have gone up by 15%. The IDFA update will significantly impact an app developer’s ability to target advertising, with a concern that more users will opt out, than opt in. Our webinar attendees expect a further decrease in IAA revenues by between 40-80% post IDFA update. With this uncertainty, the question is how can app developers increase their revenues with such a massive change to their ability to track app users? A key thread from the expert panel is how, with IAA revenues set to decline, marketing budgets will need to be apportioned differently and focused towards IAPs. While you can tweak and change your focus in other areas, such as website attribution and messaging, greatest success will be found by targeting users who spend.
Jin Soo Lee said NHN ACE are looking at new ways to increase In-App Payments, including marketing directly to audiences of new paying users. NHN ACE use Bango Audiences which are filled with users proven to pay in similar apps. As a subscription app, Hannah, Curio’s Head of Growth, said Android hasn’t traditionally performed as well as iOS or web for IAPs, but increasing focus on Android users is something to consider.
Offsetting your advertising revenue is one way to soften the blow of the IDFA update. Jason Yim, Platform Specialist at PHD, told the webinar that gathering first party data – an email and phone number – will be more important than ever. From there you can do secondary marketing with lookalike audiences and identify your high value users. He described it as a proxy method of identifying who your users are.
A strategy which combines advertising with marketing, using both first and third-party data, will be vital. Jin Soo Lee from NHN ACE says advertising will be the main driver of audiences to leads, so encouraging users to visit your website landing page or app is important. This can then be collected as a first-party data, which will drive conversions to paying users.
Opportunities for In-App Advertising revenues
Re-targeting campaigns will be dramatically affected if users don’t opt in to being tracked. But there is hope. Gather third-party data from your website and then target those users through your app. Hannah Parvaz sees a future of cross-device functionality between web and mobile apps which will open up re-targeting options. Use your website to really optimize the flow, create a seamless experience for users so they’ll engage on web and then transition to the app.
Equally, Babylon Health has shifted their focus to online and web journeys. Mack explained that developing an understanding of user behavior is made easier by getting users to register via the website. The user’s email is captured and then stored inside the app, where they can be tracked and re-targeted.
There was debate amongst panelists on whether offering incentives to encourage users to opt in will work. With very limited customization options at the bottom of the opt in message, the chances of drawing a user in from incentives was slim. You only get one shot, said Jason. However, Hannah felt it was a good idea to experiment with messaging to let users know what they would gain by opting in. Communicate with users in the same way as you would for other permissions, like push notifications and location requests.
What about the data you already have on your users? The panelists agreed that it is likely most platforms will follow Facebook’s lead in not allowing existing IDFA information to be used. While marketers want to use relevant data to optimize the user experience, Hannah said they will look at other ways to do this if users don’t grant access to their details being used.
Mack, Biddable Lead at Babylon Health, said the question is by how much ad prices will shift. With Google advertising an inherently competitive activity, where you’re competing with other advertisers for the same users. Mack recommended being smart in how you find high value users by monitoring how CPM changes after IDFA changes are introduced.
Monetize intelligently, connect to your users – and stay positive
Build connections with your users right from the start. People will pay a fair price and opt-in to make the most of a product they love. “If you can become that product, then you’re going to win,” said Hannah.
Mack urged marketers not to worry. “Know that the performance you see immediately after the update goes live in 2021 isn’t going to be reflective of what it’ll be like in the long term. If you can stick it out, monetize and acquire users in a more intelligent way than your competitors, there’s definitely an opportunity to be had.”
If you missed the webinar, watch the recording The end of IDFA = new opportunities for app monetization