July 2021 - Consumer Acquisition by Brainlabs

Protected: Bumble Case Study

Posted on July 20, 2021September 6, 2022 by Lian

IDFA Killing Lookalike Audiences, Now What?

Posted on July 27, 2021September 14, 2021 by Lian

Data analysis representing $122 million in paid social mobile app ad spend reveals how IDFA loss is killing lookalike audience targeting and causing a rise in unattributed organic revenue, resulting in a sustained negative impact on ROAS.
Since late April, ROAS and click-to-install rates have plummeted for broad, lookalike, and interest targeting.
Android ads are not immune to the larger ecosystem effects of IDFA, as Android performance simultaneously declines across social networks.
Facebook warns against the reliance on lookalike audiences: “By continuously using the same optimization tools and same lookalike audiences, advertisers risk limiting themselves to the players they’re familiar with, which can in turn limit growth.”
As insights into user behavior deteriorate, a user’s declared interests are critically important to target based on motivation, intent, and persona-led creative.
Experimentation with agile creative is critical as we await tools from social platforms that enable ROAS-positive, effective probabilistic targeting tied to interest targeting and contextual advertising.

IDFA Loss Has Killed Lookalike Audiences, Now What?

Earlier this month, Consumer Acquisition shared data on the devastating impact IDFA loss is having on iOS app advertisers with iOS advertisers experiencing revenue drops of 15-20%. We’ve been discussing the potential fallout since last year (Hey Apple, You Suck!, IDFA Armageddon Part I, IDFA Armageddon Part II, IDFA Armageddon Part III) and while we’ve already seen skyrocketing CMPs, as iOS 14.X distribution grows, we anticipate a clearer view of the negative financial impact to KPIs and LTVs by the end of August 2021.

In our review of over $250 million in ad spend for our initial IDFA impact report, we knew the reach and effectiveness of lookalike audiences (LALs) across social ad platforms would decrease as iOS 14.6 adoption increased. And as most advertisers use LaLs derived from revenue events like purchases, the loss of IDFA effectively destroys one of the most common and profitable audience targeting tactics. In their Big Catch Playbook, even Facebook warns against the reliance on lookalike audiences: “By continuously using the same optimization tools and same lookalike audiences, advertisers risk limiting themselves to the players they’re familiar with, which can in turn limit growth.”

But our experience managing over $3 billion in creative and social ad spend means we know how to find new opportunities. Analyzing ROAS for lookalike audiences, broad audiences, and interest groups on large social networks over the past twelve months, we have recommendations to reach your ideal audience in a post-IDFA world.

Lookalike Audience Targeting

Prior to the loss of IDFA, lookalike audience targeting was reliable, effective, and efficient; it offered limitless opportunities to slice and dice revenue events to uncover new high-value users. A strong lookalike audience could scale and run for a month or more; but now, ROAS might be 0.5% when it was previously 15%. As a result, advertisers have been decreasing social ad spend for iOS by 40-50% each month since ATT enforcement and are consistently shifting more ad spend over to Android. However, Android ads are surprisingly not immune to the larger ecosystem effects of IDFA. Android performance across social networks is declining, as well. With GAID going strong, the inflated CPMs aura effect on Android advertising means everyone needs to get more creative.

According to Facebook, creative must speak to the distinct motivations of different types of players; they identify this as a massively underutilized opportunity for ad efficacy as user tracking declines. They recommend, “…as gaming advertisers look to diversify their strategies in response to an evolving ads ecosystem, motivation-led creatives provide a future-proof solution.” For user acquisition teams, experimentation with interest groups may unlock pockets of efficiency, and persona-led creative help advertisers design an experience to meet the target user’s expectations, needs, and desires. Like appealing to motivation, Branch’s 2021 Mobile Growth Handbook recommends aligning ad creative with user intent.

While much of the industry has been focused on user behavior, the deterioration of lookalike audiences and the black box of deeper funnel events means a user’s declared interests are critically important for insights into motivation and intent.

ROAS Campaigns

To provide a perspective on how the loss of IDFA is impacting audience targeting, we analyzed data representing $122 million in paid social ad spend. The following graphs show ROAS for lookalike audiences, broad audiences, and interest groups on large social networks over the past twelve months.

Disclaimer: Consumer Acquisition performance reports are based on limited proprietary datasets; actual marketplace metrics may vary.

Campaign A: Simulation Game

Ad Spend: $7.91m

Period: July 2020 through July 2021

Region: US

Platform: iOS/AndroidCP

Notable: In Q2 CPMs for LALs, interests, and broad targeting all increased. Curiously, this effect was more dramatic on Android than iOS. Q2 2021 CPMs were 2x that of Q2 2019 (pre-pandemic) CPMs. In Q2 click-to-installs remained stable for Android Broad and Interest targeting but plummeted for LAL audiences. Most impactfully, despite paying high CPMs, ROAS and traffic quality has steadily declined since January, for both iOS and all targeting types, with no end yet in sight.

Campaign B: Role Playing Game

Ad Spend: $1.45m

Period: January 2020 through June 2021

Region: US

Platform: iOS

Campaign C: Adventure Game

Ad Spend: $1.21m

Period: January 2020 through June 2021

Region: US

Platform: iOS

Notable: For IOS, both LaLs and Interest targeting CTI declined precipitously since May resulting in 90% of investment moving to other platforms. Android LAL performance fared better throughout the period, outpacing Interest targeting performance in Q2.

Campaign D: Adventure Game 02

Ad Spend: $1.94m

Period: January 2020 through June 2021

Region: US

Platform: iOS

Notable: Lookalike performance decreased sharply on both platforms (Android/iOS) in Q1-Q2. Full transition into AEO+AAA (broad) helped maintain portfolio ROI as VO performance collapsed. Small, lookalike pockets of efficiency have emerged in Android over the past 30 days. This is likely driven by new creative wins and decreased auction LAL competition.

Campaign E: Casino Game

Ad Spend: $23.38 Million

Period: January 2020 through June 2021

Region: US

Platform: iOS

Notable: For iOS, both LALs and interest targeting click-to-install rates declined precipitously since May, resulting in 90% of investment moving to other platforms. Other channels with better broad-based targeting maintained more consistent click-to-install post-ATT.

Recommendations

As insights into user behavior deteriorate, a user’s declared interests are critically important to target based on motivation and intent. The necessary shift to interest-based targeting has increased competition for the most obvious keywords; however, along the periphery of popular interests are inconspicuous affinities where new audiences are waiting. Through ongoing UA experimentation and agile creative tailored to varying demographics, high-quality top-of-funnel installs driven by genuine enthusiasm are attainable.

Persona-led creative is critical to engage audiences efficiently. It also allows the algorithms to identify and cluster users based on their preferences, performance data, and response rates to creative styles. With this insight, mobile app developers can tie events based on the probability of monetization within the first 48 hours and guide consumers into an appropriate onboarding funnel in their app.

Creative Tips

The most important lever in performance advertising is now creative, due to IDFA loss and media buying automation.
85-95% of new creative concepts will fail to outperform the best ad. You will need 20-50 new original concepts to find your next winner.
Winning ads last only 10 weeks, then fatigue and die creating a virtuous cycle of need for fresh creative concepts.
With A/B testing creative no longer viable on iOS, creative teams need to shift from variation testing to developing new concepts.

UA Tips

Until paid social advertising is thrown a lifeline, we recommend all advertisers diversify their acquisition portfolios across paid social channels and SDK networks to uncover all pockets of efficiency.
The strongest performance we’re seeing is coming from top countries, localized ad copy with AEO or Broad targeting.
Areas of exploration are interest clusters coupled with persona-led creative.
- Facebook’s Big Catch Playbook outlines how ads they’re seeing are not speaking to the distinct motivations of different types of players; this is a critical oversight as the ability to track users declines. Pair creative with onboarding, tag to an event and allow Facebook to deliver qualified audiences.
- Similarly, Branch’s 2021 Mobile Growth Handbook recommends aligning creative with user intent to earn more high-quality top-of-funnel installs
- Persona-led creative developed through a creative journey helps advertisers design a solution to meet the target user’s expectations, needs, and desires.
Restructuring your Facebook ad account for iOS 14.6+ is critical to adapt and thrive.

App Developer Tips

For iOS, focus on tutorials to identify consumers that indicate a propensity to monetize in the first 48 hours post-install. Also, establish onboarding as events to educate the algorithms on what changes to make.
Mobile app developers often succeed or fail based on how effectively they measure and improve retention, revenue, and LTV. Most companies focus on new updates, new features, and revenue.
To stay ahead of and measure creative fatigue and enable a steady stream of fresh creative assets, we are advising app developers to break down the silos between product and marketing teams.

How We Can Help

As research into this post, we have spoken with twenty large spenders. They agree that fully loaded costs of internal UA teams are 6-8% of media spend. Consider leveraging the expertise and optics that an external agency provides. This will give you a broader understanding of the highly evolving IDFA impact.
Founded in 2013, ConsumerAcquisition.com is a technology-enabled marketing services company that has managed over $3 billion in creative and social ad spend for the world’s largest mobile apps and web-based performance advertisers. We provide a creative studio and user acquisition services for Facebook, Google, TikTok, Snap, and Apple Search social advertisers.
We can provide your internal user acquisition team a perspective on iOS14 impact across paid social providers. Our Hollywood-based team of storytellers can produce a steady stream of persona-driven creative ideas to stay ahead of creative fatigue.
Contact Sales@ConsumerAcquisition.com to work with the team.

IDFA’s Crushing Impact: How to Survive & Thrive

Posted on July 13, 2021September 14, 2021 by Lian

Data analysis representing $300 million in paid social spend reveals the devastating post-IDFA impact on click-to-install (c2i) traffic quality, iOS CPM spikes, decrease in mobile app value and event optimization performance, and decreases in lookalike audience effectiveness.
iOS advertisers are experiencing a 15-20% revenue drop and inflation in unattributed organic traffic.
Only 20% of consumers say yes to the ATT prompt allowing apps to personalize ads.
Without deterministic attribution, advertisers lose the ability to effectively attribute revenue and are experiencing an erosion of LTV and the effectiveness of LTV models.
In a post-IDFA world, Facebook, Branch, and Consumer Acquisition recommend focusing on persona-led creative to regain efficiency by allowing paid social algorithms to cluster users based on behaviors and creative trends.
We suspect Apple will roll back or soften IDFA changes by Black Friday and Google would benefit from going full Minority Report!
Check out Brian Bowman’s full interview with VentureBeat for more in-depth analysis and thoughts

Post-IDFA Crushing Impact: How to Survive & Thrive

For months we have been sharing insights about the loss of Apple’s IDFA and its profound impact on the mobile app ad ecosystem (Hey Apple, You Suck!, IDFA Armageddon Part I, IDFA Armageddon Part II, IDFA Armageddon Part III). After reviewing $250 million in ad spend, we now have a clearer picture of how dramatically Apple has hurt iOS app advertisers and we have recommendations for how to survive and thrive in this post-IDFA world!

By breaking down paid social spend, we tracked how the quality of traffic has steadily decreased since January 2021. For the purposes of this study, the erosion of traffic quality is measured by users’ click-to-install rate (c2i). We are using this c2i to avoid the noise generated by CPMs across genres and countries. Scroll down to the bottom of this article to see the devastating impacts.

Tracking c2i alongside the loss of Apple’s IDFA and the subsequent operating system updates, we see the decline of traffic quality accelerating. Most notably after Apple began pushing the upgrade of iOS 14.6 in late May 2021. Based on the adoption rate, Apple’s iOS 14.6 may achieve 80% user adoption in late July 2021, which means the full financial impact on KPIs and LTVs could be known next month, August 2021!

Post-IDFA Trends

We can already see the trends. Only 20% of users are allowing apps to personalize their ads by allowing the app to track them when presented with the ATT prompt. For the traffic we evaluated, as personalization and tracking drop, paid social value bidding performance has faded. Across paid social platforms, down-stream event optimization and lookalike audience performance are also eroding. As a result, iOS advertisers are experiencing a revenue drop of 15-20% with inflation in unattributed organic traffic, but not enough to cover the financial loss.

Based on data and conversations, due to the adoption rate of iOS 14.5+ and material erosion of traffic quality and performance, advertisers have shifted their iOS campaigns to SKAN. Apple’s SKAN threshold is 25-30% null installs and clients are seeing a large increase in organic revenue due to unattributed traffic.

Ad Spend

As for deterministic attribution declines with accelerated iOS 14.6+ adoption, advertisers will no longer be able to effectively attribute revenue. They are experiencing an erosion of LTV and the effectiveness of their corresponding models. If advertisers cannot track revenue effectively, ad dollars spent on iOS advertising will drop as it becomes less efficient due to restricted measurement and poor personalization capabilities. Branch’s 2021 Mobile Growth Handbook shows that as iOS advertising has dropped, Android advertising has increased 8-21% due to Google maintaining advertiser’s ability to personalize and customize ads properly.

According to eMarketer, at the 2021 peak of ad spend on iOS, during the week of February 2 to 7, marketer budgets were split relatively evenly between operating systems: 43.84% went to iOS app install campaigns, and 56.16% went to Android, according to mobile analytics firm Singular. (However, Singular notes that spending may have been artificially high as advertisers scrambled before ATT went into effect.) By the week of June 14 to 20, Apple’s share dropped to just 29.71% while Android claimed 70.29% of the budget.

Post-IDFA Data Analysis

To provide a perspective on what is going on with the loss of IDFA, we analyzed data representing $300 million in paid social ad spend. We focused on click-to-install (c2i) rates for Android versus iOS, SKAN versus non-SKAN, CPI versus c2i, value optimization, event optimization, and mobile app optimization. The following graphs show how dramatically the loss of IDFA has impacted iOS mobile app advertisers. Disclaimer: Consumer Acquisition performance reports are based on limited proprietary datasets; actual marketplace metrics may vary.

CPM Overview Chart:

Ad Spend: >$300 million

Period: February 21, 2021, through July 4, 2021

Region: US

Platform: Android and iOS

Notable: iOS has consistently been more expensive than Android, depending on the flow of our client’s genre, we see the gap between operating systems close. However, you will notice an increase in iOS CPMs tied to the launch of iOS14.6 vs stable Android.

Campaigns

A: Click-to-install (c2i)

Ad Spend: >$250 million

Period: January 2021 through June 2021

Region: US

Platform: Android and iOS

Notable: Using c2i as a proxy for traffic quality, notice that Android c2i remains steady and increases in June while iOS c2i erodes both for SKAN and non-SKAN tied to IDFA loss. iOS traffic quality traffic has eroded with the rollout of iOS 14.5 and 14.6 while CPMs have skyrocketed.

B: Cost-Per-Install (CPI) vs. Click-to-install (c2i)

Ad Spend: $42 million

Period: January 2021 through June 2021

Region: US

Platform: Android and iOS

Notable: June, CPI spikes while click-to-install (c2i) erodes post-IDFA loss, indicating lower quality traffic at increased CPMs.

C: SKAN vs. Non-SKAN

Ad Spend: $180 million in spend

Period: January 2019 through June 2021

Region: US

Platform: iOS, Top 5 Gaming Genres & Entertainment

Notable: Comparing SKAN c21 (blue) to non-SKAN (red) c21 there is a noticeable drop in c2i performance as COVID hit in March 2020 and another dip in March 2021, with an accelerated drop in June 2021 due to the increased adoption of iOS 14.5+.

D: Value Optimization (VO), Click-to-Install (c2i)

Ad Spend: $50 Million

Period: January 2020 through June 2021

Region: US

Platform: iOS, Limited to Top 3 Gaming Genres

Notable: In June 2020, drop-in traffic quality. January 2021 did not recover as expected, while eCommerce advertisers exited the holiday marketplace; we believe other advertisers front-loaded Q1 2021 spend to get ahead of potential negative impacts due to IDFA loss. The larger drop in June 2021 corresponds to the iOS 14.6 update.

E: App Event Optimization, Click-to-install

Ad Spend: $33 Million

Period: January 2020 through June 2021

Region: US

Platform: iOS, 2 Gaming Genres

Notable: Steady decrease in event optimization click-to-install performance during COVID. C2i stabilizes Aug > Dec 2020 with an additional loss in c2i corresponding to iOS 14.6 June 2021.

F: Mobile App Optimization, Click-to-install

Ad Spend: $140 Million

Period: January 2020 through June 2021

Region: US

Platform: iOS

Notable: Large increase in traffic quality in June 2020 may be due to advertisers in our marketplace but our overall c2i quality drops starting January 2021, additional loss of c2i quality near the end of April 2021, and further erosion with the iOS 14.6 update.

G: SKAN vs. Non-SKAN

Period: January 2021 through June 2021

Region: US

Platform: iOs

Notable: non-SKAN c2i (red) drops -46% vs January. SKAN c2i (blue) swings wildly with traffic eroding through June 2021.

H: Android vs. iOS, Click-to-install

Period: January 2021 through June 2021

Region: US

Platform: iOs and Android

Notable: We are seeing a significant movement in ad spend from iOS to Android. Comparing Android vs. iOS blended (with and without SKAdNetwork), Android c2i increases in June whereas c2I for iOS declines -55% since January 2021.

Before we get to our recommendations, here’s my take:

Apple will roll back or soften IDFA changes before Black Friday.

As with Apple’s prior failed attempts at launching ad networks (iad), they lack the mettle to build an ad experience that consumers will enjoy. Also, with Netflix and Amazon, consumers have come to expect thoughtful, AI-driven suggestions based on usage data and do not prefer human-curated content. Without the willingness to personalize the merchandising of apps, Apple’s ad network will suffer the same fate as TV commercials. Which are ignored, and skipped by consumers, relegated to the heaping pile of poor user experiences. When Apple realizes they lack “Steve Jobs’ innovation” and that consumers prefer to be delighted by personalized ads and want to maintain “free apps”, Apple will re-enable a version of IDFA to allow reputable companies like Facebook, Google, TikTok, Amazon, Snap, and others to do what they do best and merchandise apps that delight consumers.
What is the alternative? Apple forces app developers to offer their products for free, without the ability to recover development costs or improve monetization through usage data? Having said all that, I do believe the underbelly of app advertising—the weird ads that follow you around due to 3rd party trackers—will be permanently relegated to the “trash heap” of inappropriate advertising. As a guy who likes to bet, Apple will start to roll back IDFA policies by November 2021, before the Black Friday holiday.

Mobile App Developers Beware!

Apple is not just reducing the efficiency of paid advertising. They are also hurting app developer retention, LTV calculations, and product development iteration testing. We would like to issue a warning that the KPIs you are testing to tune performance, retention, and LTV may need to be thrown out as of the rollout of iOS14.6. Or, you may consider combining data with organic due to Apple’s SKAN restrictions. Either way, the stability of data and reporting of hundreds of thousands of developers are likely to be questioned.

Why is Android performance suffering?

Our expectation was that advertisers would move to Android as a safe, haven from iOS chaos, leverage the learnings, audiences, and unobstructed creative optimization, and then port the learnings to iOS. Conceptually, it does not make sense that the performance of Android has taken a hit. Sure, Travel, Restaurants, Auto, Entertainment, SMB, and other COVID-impacted advertisers are back in the market but why would mobile app event bidding on Android across social platforms produce lower ROAS? CPM increases cannot be the only driver.

Why are lookalike audiences collapsing so quickly and what replaces them?

With only a 20% ATT adoption rate on iOS, we expected the reach and effectiveness of lookalike audiences to decrease. However, the rate of performance degradation across social ad platforms has outpaced the adoption rate of iOS 14.6 and the normal refresh rate of custom audiences and their corresponding deterministic lookalike (LaLs) audiences. Yes, most LaLs are derived from revenue events like purchases but why is LaL performance dropping so quickly?

Unless legally forced to do so, as with their delay in killing pixel tracking, Google will NOT kill GAID!

Google is one of the world’s best companies at identifying what people want next and delivering it to them. If Sundar Pichai were to ask my option on IDFA (which, for the record, he has not), I would advise him to go full “Minority Report”! Do what you do best and delight consumers, like Netflix, by guiding them on what they may enjoy next based on AI, quantitative analysis, and behavioral dynamics.

Where are we headed?

My new least favorite phrase is probabilistic targeting. Mainly because it connotes lower quality recommendations (e.g., spam) and lowers ROAS / net profit. Since it looks like Apple is willing to burn down their own iOS marketplace and they do not appear to be budging…why aren’t the large social ad platforms offering a tool that allows advertisers to import custom audiences and generate a contextually targeted interest cluster of users? While the deterministic financial efficiency would still be less, this could allow most existing advertisers to maintain their investments and historical learnings and may function as a bridge into the new probabilistic ad world. If you then enhance that data with the massive treasure troves of 1st party data coupled with interest audience segments tied to persona-led creative, we may have a sustainable path forward. As the data shows, it is certain to be a less profitable path forward, but it is still a path forward.

Snap UI: audience mapped to interests

To me, the above does not add up! We are clearly in the throes of a transition. Companies appear to be positioning themselves to maximize their own internal revenue. The juggernauts have yet to offer a viable probabilistic alternative that leverages 1st party data. So, until they do, here are our recommendations for what you can do when “nothing is making sense”!

POST-IDFA RECOMMENDATIONS

Deterministic tracking is eroding on iOS devices. Large social ad platforms continue to simplify and automate their media buying algorithms. So, the most efficient lever for sustained profitable user acquisition is creative optimization. Our recommendation is to develop persona-led creative that allows the algorithms to identify and cluster users based on their preferences, performance data, and response rates to creative styles. This insight then allows mobile app developers to tie events based on the probability of monetization. Which will guide consumers into an appropriate onboarding funnel in their app.