• 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 iOS 14.5+ adoption by week

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.

post-idfa iOS 14.5 users give app permissions

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.

shift to android ad spend

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 iOS ad spend dropping

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.

iOS v Androids CPMs post-idfa

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.

Android vs iOS NON-SKAN vs SKAN

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.

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

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+.

post-idfa SKAN vs. Non-SKAN

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.

post-idfa Value Optimization (VO), Click-to-Install (c2i)

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.

post-idfa App Event Optimization, Click-to-install

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.

post-idfa Mobile App Optimization, Click-to-install

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.

post-idfa SKAN vs. Non-SKAN

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.

post-idfa Android vs. iOS, Click-to-install

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.

 post-idfa Snap UI: audience mapped to interests

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.

 

Creative Tips

post-idfa unicorn ads

UA Tips

  • The first two weeks of July have been highly volatile across paid social channels. Profitable scale is difficult to achieve and sustain. Lookalike audiences appear to burn out in only two weeks. Until paid social advertising is thrown a lifeline, we recommend all advertisers diversify their acquisition portfolios across paid social channels. We also recommend SDK networks to uncover all pockets of efficiency.
  • The strongest performance we are seeing is coming from top countries, localized ad copy with AEO or Broad targeting.
  • An area of exploration is 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.
  • We are advising app developers to break down the silos between product and marketing teams. This will enable them to stay ahead of and measure creative fatigue. Resulting in a steady stream of fresh creative assets.

 

For More Background On Our Perspectives Around Post-IDFA Loss

 

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 help you gain a broader understanding of the highly evolving post-IDFA impact.
  • Founded in 2013, ConsumerAcquisition.com is a technology-enabled marketing services company. We have managed over $3 billion in creative and social ad spend for the world’s largest mobile apps and web-based performance advertisers. In addition, 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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