• 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.

Simulation Game Lookalike Audiences

Campaign B: Role Playing Game

Ad Spend: $1.45m

Period: January 2020 through June 2021

Region: US

Platform: iOS

Role Playing Game Lookalike Audiences

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.

Adventure Game Lookalike Audiences

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.

Adventure Game 02

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.

Casino Game

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

 

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.

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