The Faster, Better, Cheaper Mandate in Extraordinary Times

We live in extraordinary times. In just the last few decades, we may have thought we had already seen it all. Like the rise of new business models. Business models ahead of their time. Stock market bubbles. Economic downturns. Economic recessions. The rise of Google. The rise of Facebook. However, now we are experiencing something entirely new. It starts with a simple concept that we preach all the time at Consumer Acquisition, which is Faster, Better, Cheaper. This is what we believe is the mandate for marketers in this era of change.

However, this is the first time we have seen this industry take massive steps backward. Even beyond the external pressures of a pandemic, economic slowing, and division running rampant. As a result, the challenges of privacy regulation and privacy as a feature in hardware and software are shaking up the industry. An accelerated path to media buying automation, driven by Facebook AAA and Google AC, will disrupt workflows and human capital. But we have never been more excited. Wait, what? That is right. Even though this is the first real step backward for our industry, we feel like it represents two steps forward. We will stumble in those two steps and we may fall, but we will rise.

 

Faster, Better, Cheaper

It sounds simple and is intentionally devoid of jargon. But Faster, Better, Cheaper is key during this accelerated rate of change in the industry. Every business model will have a variation of Faster, Better, Cheaper, so let me explain what it means to our industry and social advertisers.

Faster

Accelerated learning to identify which creative will win the day and increase media return on investment.

Better

Enable our clients to avoid their own creative limitations and breakthrough into “new stories”. Essentially, creating new and immersive stories that create action in the 15-30 seconds allowed by social media user behavior.

Cheaper

A new working model that is powered by our 100% remote and globally diverse workforce. Which is also paired with proprietary technology to ensure high quality creative. Plus, a high velocity of output and the pairing of creative assignments to the right individual. An individual based on their bandwidth and unique skills.

Faster, Better, Cheaper is all about balance. You cannot lean into one and forsake the other two. “Cheaper” can make some cringe, especially when speaking about creativity. However, “Cheaper” does not mean lower quality or less creativity. It is about improved costs and economies of scale. This is balanced by the concept of Better. Always be in a state of Kaizen and continuous improvement. Increasing quality, paired with increasing efficiency and speed. This is the formula for success.

Two Steps Forward

Back to the “two steps forward” mentioned at the very beginning of this blog post. For both privacy and automation, winning creative, paired with innovative use of quantitative analysis, will be the determinant of success. The industry has become commoditized in terms of achieving success. The same metrics and the same general approaches. The same general approach and accepted limitations of deterministic measurement.

As measurement becomes opaquer and media buying automation increases, marketers will have to look internally to gain market share. This relies on a deeper and more actionable understanding of their customers and their motivations. A deeper ability to connect media investments to positive customer experiences and revenue-generating behavior. Most importantly, marketers will have to tell an authentic and compelling story. More so than their competitors. We are moving from a world of marginal gains to something more like The Red Queen Effect. An arms race of insights activated in storytelling and compelling creative.

Are you prepared to take two steps forward? Are your organization, mindset, and processes aligned to operate in a Faster, Better, Cheaper model?  If not, let us talk about getting your organization ready to succeed. Not despite the changes coming in the months and years ahead. But built to capitalize on this exciting time of rapid evolution in the industry.

Our Business Model

As a quick primer, our business is made up of three necessary parts for marketing success for brands and developers. Which are in the business model of discovery. Discovery of new audiences for the brand and discovery of the brand by existing audiences looking for a change.

  • A Creative Studio that creates compelling, story-enhanced digital ads that compel users to stop scrolling, engage with the ad, and take action towards a business outcome.
  • Experienced user acquisition and performance marketing services team that executes creative testing through a combination of art and science to ensure that impressions are weighted to “winning creative”  In addition, every impression allocated to lower-performing creative is lost money in our minds. This team supports clients on an outsourced model. Or provides consulting and coaching to internal teams to improve efficiency and modernize strategies and tactics.
  • Lastly, we create unparalleled efficiency and analysis capabilities through our proprietary software platform, AdRules. Essentially, creative workflow, testing activation, reporting, and analysis are automated. They are also supported by machine learning. Therefore, this is to get to business outcomes faster and across a geographically dispersed and diverse creative team.

We have proved our mettle in the high-velocity and highly visual world of gaming and entertainment. Also, we have evolved and sharpened our model in the world of eCommerce, digital services, and fintech. As a result, we believe our unique business model is the right model for these extraordinary times.

better faster cheaper

UA Is Dead – Long Live Automation

Full-scale automation is here for mobile apps. Google’s AC (App Campaigns) is now a necessary and substantial part of most paid acquisition strategies. Therefore, is this the long-heralded end of active user acquisition (UA) management? Is it the beginning of a low-touch portfolio management model?

Well no, not exactly. The full rollout of Facebook’s Automated App Ads (AAA) product actually represents an opportunity for buyers savvy enough to develop a successful strategy early in its life. Unlike Google’s AC, for now, Facebook’s standard auction buying still exists and can thrive alongside AAA campaigns. Formulating a tandem strategy for automation (AAA) and standard “business as usual” campaigns is key for 2020 and 2021. In addition, there are several important layers to consider.

Building a focused campaign structure within your Facebook non-AAA traffic alongside evergreen AAA campaigns will ensure maximum scalability soon of fewer allowable ads and IDFA obsolescence. So think of AAA as a “helper” – a second UA manager running light-touch campaigns to your top identified geos and creative. There are three considerations to building a successful tandem strategy: high-confidence geo bundles, a data-driven creative testing process, and a future-proofed approach to ad/campaign limits with multiple regional Facebook pages* for your app.

Geo-Strategy

AAA is unique in that only one campaign may be used for each optimization type and geo. However, this means that if you have a AAA Value campaign running to the UK, Canada, and Australia, you cannot also have a Value campaign running to Canada only.

Instead, utilize the flexibility of standard campaigns to test optimization/geo combinations with small budgets. For instance, does Brazil monetize best with App Event Optimization (AEO) purchase or Level Achieved? Or, is Brazil better suited as a cluster with other Portuguese countries or combined with a South American group? Either way, identifying the best path to monetization requires having your tiered geo framework known in advance of AAA launch.

Most developers will have already identified high-LTV countries. Including some geos like the US and Canada warranting their own dedicated AAA campaigns for each platform. Because of this, we suggest you test AAA in these dedicated country campaigns first with multiple optimization types being prioritized in a down funnel sequenced test.

As an example, your first six weeks of AAA might be:

 

  • Week 1: AAA US Install + AEO purchase
  • Week 2: AAA US AEO Registration
  • Weeks 3-4: AAA US AEO purchase
  • Weeks 5-6: AAA US Value (only applicable with iOS 14 + IDFA)

Based on the data below, for some apps, Facebook’s Ads Manager algorithm (normal algo) currently outperforms AAA. As such, we recommend a dual approach of using both algorithms as they continue to evolve. But also bear in mind that AAA campaigns typically have a learning phase period in the first week. Therefore, you will want to be patient while moving down the funnel when killing the previous campaign.

UA is Dead Long Live Automation

The separation point for geo-bundles comes with tier 2 and ‘rest of world’. So, while AAA in the US/tier 1 is being tested, consider aggressively testing tier 2 geo groups organized by top languages with Dynamic Language Optimization (DLO). Now you are ready for AAA expansion. Post-AAA activation, standard campaigns will continue to exist as a sandbox for creative testing. Because of this, scale AAA to the top tier ‘rest of world’ and allow for your mature standard campaigns to complement AAA. Then, graduating creative winners emerging into the AAA mix.

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Creative Testing

Unlike Google’s AC, the text/video/image inclusion cannot be broken into separate ad groups to measure and organize the effectiveness of creative concept types. The method is to fill and pray. This means 50 videos/images with 10 text assets are set loose to give the Facebook AAA algorithm full control to determine to spend allocation. Facebook’s initial recommendation is to load up your campaign with the max number of assets. However, using your standard campaigns to isolate creative winners first will avoid wasted spend against concepts that fall flat. Identify 20 resonant videos and a handful of images before moving headlong into AAA.

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Time To Prepare for Automation

We also want to be planning for the long-term with our tandem approach. Other waves are on the horizon in the tide of consolidation:

iOS14 Automation will impose Facebook ad limits soon.

advertiser size

  • Perhaps the most curious workaround we’ve found so far for ad limits is Facebook page proliferation. The limit lives at the page level. So, set up separate pages for each key geo group. (App Main – US, App Main – Japan, etc.) This is a clever way to expand your ad limit number. It also avoids running into the platform limitations. You will also want the additional flexibility the page hack provides to maintain the creative testing pace in standard campaigns. Consider breaking your Facebook page into multiple pages where the traffic is unique and will not compete:
    • Primary post-iOS 14 traffic
      • 1a: post-iOS14 + US only
      • 1b: post-iOS14 + CA, UK, NZ only —etc
  • Pre-iOS 14
    • Primary Android Page
      • Android + the US only
      • Android + (CA, UK, NZ only) —etc
  • We still have work to do, too.
    • Global Market Pages – we are still unclear on the impact of global market pages and it needs more research.
    • Develop a strategy for DCO/DLO

Facebook Advertisers Should Prepare for iOS 14 Automation

  • Estimated iOS14 Adoption Rates: assuming Feb 1, 2021 launch
    • 50% 30 days post-launch
    • 70% 120 days post-launch
    • 90% 180 days post-launch > Assume August 2021 nearly 100%
  • Facebook Suggested Actions To Take Now:
    • Update to the latest Facebook SDK. Advertisers are not required to run app ads on iOS 14.0. However, we recommend as a best practice to update to the newest version of the Facebook SDK. This will integrate the latest features and performance improvements. Version 8.0 will be released in the coming weeks.
    • Update to the latest Audience Network SDK (v 6.1) when it is released in October. This update is not required for advertisers to run app ads on iOS 14.0. But, updating will ensure they have the latest SDK features and performance improvements.
    • Do you work with a Mobile Measurement Partner (MMP)? If so, we recommend you check specific requirements you may have to run app ads on iOS 14.0.

Final Thoughts about Automation

Plan now, with lean testing through standard campaigns. This will also build a stable of winning videos, images, and copy messaging, tied to a wide variety of geo bundles. In addition, grouping countries by LTV and behavior remains best practice. Prepare for limited campaign count on iOS by giving preference to larger country sets.

As always, the two rules of app marketing remain unchanged. Know your product and Know your users. Tailor a tandem AAA/standard campaign strategy. Base it on existing user data from live campaigns and chart the unknowns with extensive testing. Thus, the time for thoughtful AAA/human campaign integration is now.

Please reach out to sales@ConsumerAcquisition.com. We can help with fresh creative for video ads or media buying on Facebook and Google.

Game Over – Apple’s iOS 14 & IDFA Loss Will Drive Layoffs!

Game over! If released in the next month, Apple’s iOS 14 with the loss of the iOS Users’ Identifier for Advertisers (IDFA) will be catastrophic to the mobile app advertising industry. It will also usher in a Version 2.0 of how the industry will operate from an economic perspective without clear deterministic attribution.  As Paul Romer once said, “a crisis is a terrible thing to waste.”  As a result, the mobile app industry will be in a forced reset and with any economic reset. There will be winners and there will be losers.  As if 2020 hasn’t been a cruel reminder of that fact day in and day out.

Like the 2015 movie, “The Big Short” starring Christian Bale, which showed how the financial crisis of 2008 was triggered by the housing bubble unless our ad tech juggernauts find a mutually unacceptable solution, we need to plan for the end game of Version 1.0 of the industry.  Could I be wrong? Anything is possible. Just like Michael Burry who recognized that the U.S. housing market was an enormous asset bubble inflated by high-risk loans, Apple’s changes will burst the mobile app advertising bubble — sure, I could be wrong, but I’m not.

Apple's iOS 14

But before digging into the likely scenarios, we at Consumer Acquisition are ready to stand by our clients and the industry we love with a unique offer and learning agenda to help through these unsettling times.  Our unique blend of Hollywood blockbuster-creative, user acquisition expertise, and perspective fueled by more than $3B in media across industry leaders. Also, our uncompromising test and learn agility will be paramount to turning catastrophe into an opportunity for our clients.   Agility, a deep expert bench, and having the best information in your hands will make all the difference during these extraordinary times.  So if you have questions on how to proceed in this new reality, please contact us at support@consumeracquisition.com.

Back to the scenarios I see playing out if the juggernauts do not operate in a cooperative effort to keep the mobile app advertising industry moving forward:

Scenario 1: Apple Delays SKAdNetwork 6-12 months

  • Apple delays the rollout of iOS 14’s required use of SKAdNetwork (SKAN) with App Tracking Transparency / IDFA being opt-in for 6-12 months.
  • The mobile advertising ecosystem hasn’t had enough time to prepare for the biggest change in 10 years.
  • Based on numerous conversations with major traffic sources, ad networks, mobile measurement partners, and CTOs, like iAd, Apple’s SKAN product isn’t ready for prime time and there is a sustained level of confusion on the best attribution substitution – probabilistic or deterministic.
  • Perhaps Apple will allow a year grace period for companies to use a combination of fingerprinting + IDFVs + App Tracking Transparency along with SKAN and refine their monetization models. With a defined rollout date of SKAN, this would provide the industry with both times and defined end date to update their business models.
  • [Update 10:30 am 9/3: Apple confirmed it is delaying the change until early next year. In a statement, Apple said, “We believe technology should protect users’ fundamental right to privacy, and that means giving users tools to understand which apps and websites may be sharing their data with other companies for advertising or advertising measurement purposes, as well as the tools to revoke permission for this tracking. When enabled, a system prompt will give users the ability to allow or reject that tracking on an app-by-app basis. We want to give developers the time they need to make the necessary changes, and as a result, the requirement to use this tracking permission will go into effect early next year.”Apple laid out its views on privacy and the issue today.]

OR… hold on to your revenue because scenario 2 is direr…

Scenario 2: Layoffs, Consolidation, & Business Darwinism

 

Layoffs

  • Unless Apple and other tech titans reach a compromise, with the launch of Apple’s iOS 14, SKAN with App Tracking Transparency, layoffs will happen industry-wide to mobile app advertisers of all sizes by the middle of November due to revenue compression and companies being forced to manage costs relative to their new revenue reality.
  • Layoffs won’t be restricted to a vertical like gaming, nor will they be restricted to marketing staff with expertise in one network like Facebook or Google.
  • In preparation for iOS 14, many companies are adjusting down revenue projections and refining P&Ls by fully loading costs for marketing and user acquisition teams and factoring in salaries, rent, benefits, etc to get a “true cost” of advertising profitability and then comparing against external solutions from agencies and third parties.
  • User Acquisition teams will get significantly downsized. This will be driven by a lack of certainty and disruption to existing LTV models (12-36 months) and by the elimination of monetization sources and remarketing capabilities. With this reality, User Acquisition teams will have to do more with less which will limit their ability to create real tradecraft and IP within the new post-iOS 14 world.  Essentially, it will feel like consistently swimming upstream without marked improvement day by day.
  • Layoffs will be fueled by simplification in the structure of iOS 14 accounts and a reduction in the complexity of work required to manage media buying with Google UAC and Facebook’s just-announced Automated App Ads. Don’t get me wrong, both of the aforementioned platforms are amazing advancements in helping to simplify and automate media buying which levels the playing field. Advertisers large and small will see a life raft in a perceived strategy of reduction of staff to maintain and optimize accounts.  However, tradecraft in maximizing UAC and AAA will manifest with advertisers who have the resources and partnerships in place to double-down on the new automated reality and will differentiate these advertisers using the solution in an advanced manner.

Consolidation

  • Advertising budgets will be cut for mobile app advertisers to minimize risk, but steeper in mid to small size companies that don’t have large IDFV pools and/or monetize mainly with In-App Ads (IAA) and therefore expect a significant reduction in monetization as iOS 14 adoption increases.  Also, cash on hand will allow the larger players to weather the disruption better than smaller companies that have yet to achieve stable cash flow.

Darwinism

  • Large/public companies will need to maintain user growth, but I expect a Darwinistic-like streamlining of their legacy catalog of titles so the reduced marketing budgets and teams can focus on driving growth for their primary titles.
  • Creative is King! Companies will 10x creative optimization and production of fresh creative concepts as this is the primary lever for sustained financial success across networks.
  • Agencies that offer a compelling solution for outsourced creative ideation and production with exceptionally skilled, cost-effective user acquisition will grow. They can offer a unique ability to look broadly across networks like Facebook, Google, etc, and across many mobile app advertising businesses and can transparently communicate the best practices and strategies in this rapidly changing post iOS 14 world.

Before reading how I surmised these two scenarios, I would like to share that we are currently offering our current and new clients 50% off of managed service fees on their iOS 14 accounts.  We believe our creative strength and ability to look across Facebook and Google will empower us to quickly formulate, document, and share comprehensive learning agendas across our client’s organizations.  Agility, a deep bench, and having the best information in your hands will make all the difference during these unsettling times. If interested, please reach out to support@consumeracquisition.com if you would like to schedule a conversation.

How have I surmised these two scenarios?

Below is a summary of key points from an article published on August 31, 2020, by Eric Benjamin Seufert, titled, “Analyzing Facebook’s iOS14 advertising changes”.

Overview

  • Facebook’s Ads Manager only (no support for Marketing API to create and edit campaigns targeting Apple’s iOS 14)
  • One iOS 14 ad account per app.
  • Nine published/created campaigns at a given time
  • One ad set per campaign; but no limit on the number of ads
  • Android and iOS 13 & older campaigns for all three products – app install ads, app engagement ads and dynamic ads can continue to run through existing ad accounts.

One iOS 14 Ad Account Per App

  • To advertise to iOS 14 users, an advertiser will need to set up a new dedicated Facebook ad account.
  • You cannot combine iOS 14 traffic and traffic under iOS 14.
  • For the early September timeframe, this new ad account will only apply for App Install ads for iOS 14 users.
  • All other products, app engagement ads (using traffic, conversion objective), and dynamic ads (using product catalog sales objective) will continue to be supported through existing ad accounts, without reliance on the SKAN API.

Apple’s iOS 14 Advertising Requirements / Restrictions Overview

  • If you are driving UA with an in-house team and an agency or FMP, both teams must share one iOS 14 accounts.
  • iOS 14 accounts may only have – 9 published/created campaigns at any given time.
  • One ad set per campaign; but no limit on the number of ads.
  • In FB native tools, cross-account reporting can only be done within the same account type. Not across iOS 14 and non-iOS 14 accounts.
  • Facebook loses the timeliness component of its knowledge of its users’ monetization histories after iOS 14. Because it will no longer receive user-specific events streams from all iOS apps. While it might know that a user has monetized heavily in the past. But it won’t know whether they have done so recently.
  • Facebook currently targets at the user level using event histories; in iOS 14, Facebook will have to target much broader segments of users using demographic and interest data. The loss of granularity at the targeting layer, in addition to the sparseness of event signals in iOS 14 (only one conversion value is possibly sent per acquired user in the campaign), means that the two campaign types (iOS 13 and iOS 14) require totally different parameter sets.

Apple’s iOS 14 Optimization / Measurement / Reporting / A-B Testing

  • We will not be able to provide 1D, 7D, or 28D click-through or view-through attribution window breakdowns.
  • Will report back data aggregated at the campaign level. Reporting at the ad set and ad levels will be modeled unless there is a 1:1 mapping with the campaign. We will not be able to support reporting at the creative level for those using multiple creatives within an ad.
  • Does not allow for support of any breakdowns (age, gender, region, country, impression device, platform, placement, product ID, etc.) for app install or post-install event metrics.
  • Report back data that is several days delayed. Will not provide support for real-time data.
  • Will not be able to support impression-time or conversion-time reporting. Due to the delay of reports and lack of visibility into when the ad clicks happened, we can only support reporting based on the time the data gets returned through the SKAN API.

SKAdNetwork Limitations

  • The SKAN API will report back data aggregated at the campaign level. Reporting at the ad set, campaign, and account levels will match results returned by the SKAN API. While reporting at the ad level will be modeled based on aggregated data received from the SKAN API. Unless there is only one ad for a given campaign.
  • Demographic breakdowns will no longer be available
  • The SKAN API will not provide support for real-time reporting. Data will be reported with a randomized delay of up to three days.
  • The SKAN API will not provide support for attribution window breakdowns (1D, 7D, 28D).
  • Cross-account reporting can only be done within the same account type, not across iOS 14 and non-iOS 14 accounts.
  • A/B testing Mobile App Installs and post-install events from iOS 14 devices will be only available at the campaign-level. There will be no impact on reporting for Android and iOS 13 campaigns.

Added Context, “Facebook Announces Plans for Apple’s iOS 14 Impact”

  • Facebook announced plans for the impact of Apple’s much-anticipated iOS 14 release, in a detailed blog post. Apple’s deprecation of the iOS Users’ Identifier for Advertisers (IDFA) will require apps to ask users for permission to collect and share identifying data going forward.
  • Facebook will not collect the identifier for advertisers (IDFA) on its own apps on iOS 14 devices. But it may revisit this decision as Apple offers more guidance.
  • The company will remind its users that they have a choice about how their information is used on Facebook. Also, about its Off-Facebook Activity feature. This allows users to see a summary of the off-Facebook app and website activity businesses send to Facebook and disconnect it from their accounts.
  • For partners, Facebook will release an updated version of its Facebook SDK to support iOS 14. This will provide support for Apple’s SKAdNetwork API. Facebook is asking businesses to create a new ad account dedicated to running app install ad campaigns for iOS 14 users. This will mitigate the impact of the efficacy of app install campaign measurement.
  • The company believes that Apple’s changes will disproportionately affect its Audience Network given its heavy dependence on app advertising. The expectation is that advertisers’ ability to accurately target and measure their campaigns on Audience Network will be impacted. As a result, publishers should expect their ability to effectively monetize on Audience Network to decrease. In fact, Apple’s updates may render Audience Network so ineffective on iOS 14 that it may not make sense to offer it on iOS 14. Facebook is however expecting less impact on its own advertising business.
  • In testing, Facebook has seen more than a 50% drop in Audience Network publisher revenue when personalization was removed from mobile app ad install campaigns. Facebook says the impact to Audience Network on iOS 14 may be much more. So, they are working on short-and long-term strategies to support publishers through these changes.
  • Facebook is encouraged by conversations and efforts already taking place in the industry to get this right for small businesses – including within the World Wide Web Consortium (W3C) and the recently announced Partnership for Responsible Addressable Media (PRAM).

Game Over: We Can Help!

Please reach out to support@consumeracquisition.com if you would like to schedule a conversation to discuss any of the above items.  Also, we will be frequently our Mobile App Industry Benchmark page with a dedicated section designed to identify issues with IDFA roll out.

We’ve been talking about the “Death of UA” for over a year.  Check out our prior posts:

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