This is the second part of the sixth annual series of prognostications for the coming year in mobile advertising. Part one can be found here. This year, as last year, I asked a number of people whom I respect for their predictions for mobile advertising in 2021.
Maryia Filimanchuk, Director of Marketing at Apalon
Let’s talk about some mobile trends we observe today that might become even more influential in 2021. It is worth mentioning that usually, trends do not emerge overnight. Not just mobile advertising, but everything, including global society, evolves continuously. Although some changes might take years and decades to happen, we were “lucky” to watch the global pandemic accelerate some processes and hit entire verticals. So how have self-isolation, remote work, and education impacted the mobile economy? The visible separation that once existed between mobile apps and the real economy will almost disappear. If you are working with mobile apps and only consider other apps as competitors, iOS & Android as your only platforms and revenue streams, user acquisition with just paid social, you might be losing the battle.
I know it’s mobile advertising predictions, but we can’t be exclusively mobile anymore. My take is that those companies who will manage to hack user acquisition with new, sometimes non-digital channels will be at the forefront of the ecosystem. It’s not just because of the IDFA depreciation and mobile inventory limitations. For me, it’s more of a long-term diffusion between mobile and the rest of the world economy.
And let’s talk a bit about privacy. I don’t want to bring any more attention to the IDFA, as we’ve been already talking about it and how it will change the mobile advertising landscape for months. On the contrary, I wanted to bring up the global trend caused by COVID-19 of making our personal data less private and publicly available. A person’s body temperature is no longer private info as soon as one’s leaves his home. Same with location data, places you’ve visited, people you’ve contacted. There was no success in building a universal app for contract tracing. Still, we are getting used to the idea of sharing personal info for the sake of general well-being, and I’m curious whether this will affect the decision to allow tracking in any particular app.
And finally, let’s talk about iOS apps’ discoverability & Apple’s role in this territory. We’ve seen the tendency to make the App Store a curated, personalized app discovery experience for several years, but I don’t think it works as intended. As for today, mobile advertising is much more predictable, measurable, and scalable. The trend here is that Apple wants the App Store to have more impact on app discoverability. My prediction: some less-known developers may benefit from the expected App Store changes. Apple would love to see new faces and apps, bringing more success to the small businesses and making the app economy more “fair”: as today, more than 95% of developers meet the small business criteria by getting less than $1M a year. So it should be a good time for those who applied for a reduced commission via Apple’s Small Business Program. I would advise watching App Store changes closely and getting on the App Store editorial team’s radar for any upcoming changes.
Vivek Girotra, Senior Director of Growth Marketing at Elevate Labs
BACK TO THE FUTURE
I think 2021 is going to be an intensely disruptive year for the mobile marketing industry. I don’t think teams (especially at smaller firms) are structurally or technologically ready for the tsunami that Apple’s privacy changes are about to unleash upon us. The second and third-order effects of iDFA deprecation will only be fully understood and visible toward the middle of the year and will be devastating for many companies in the retargeting, hyper-casual, and ad-monetization spaces. Things will get worse before they get better. Advertisers will have to revert to campaign optimization on contextual signals, negotiate PMP deals and econometric analysis methods that were popular in traditional CPG marketing will make a comeback. Encouraged by zero interest rates and the surplus of available capital, a large number of ad-tech startups will emerge to tackle these issues in the form of media mix modeling, predictive analytics, and probabilistic attribution. There will be multiple acquihires within MMP’s and the industry will consolidate towards one large player.
TOO BIG TO FAIL?
2021 will also be the year where Facebook and Google finally face some serious competition. While I don’t expect the duopoly to fade away any time soon, they will get hobbled next year with the increasing number of lawsuits from US and EU, growing concerns about privacy and data collection, and other SANs such as TikTok making strides in their ad targeting and measurement. The new Texas antitrust case against Google actually has teeth and shows that government lawmakers have stepped up their game and are not messing around. Facebook will not offer guidance in its next quarterly earnings report and that will crash their stock price and send reverberations across the entire industry. Contrary to what most people anticipate, Apple will not launch their own ad network — I think the reputational blowback of launching an ad network is not worth the incremental dollars for Apple.
The biggest growth gains will not come from top-of-funnel mobile user acquisition. We will have to start getting creative with maximizing operational levers in the form of virality, monetization models, conversion optimization, and partnerships. Mobile web marketing will get more popular as marketers explore alternate funnels and this will drive up CPM’s and make web marketing more competitive over time as well.
Thomas Petit, Growth Consultant
Starting with a retrospective, my 2020 predictions didn’t miss the mark too much, with a status quo in sources distribution & optimization mechanics, and big noisy headlines around privacy but no significant changes (yet). I also described in-depth the shift of the UA manager role, which I recently updated in this slideshare, and believe will continue on the same trajectory, with all comments remaining fully valid for 2021. TLDR:
- Forget the narrow scope of UA, and expand your skillset & mindset towards broader growth goals.
- Stop looking at organic & paid as 2 independent segments of your userbase.
- Keep iterating on creatives more than ever. We might get less/worse data there, but it’ll remain how the acquisition battle is won, which you’ll have to extend to merge with re-activation as audiences will start overlapping massively.
Well of course I hadn’t planned the huge shifts due to Covid, for better or worse depending on your vertical. There’s one thing I got quite wrong, the incoming firesale/bankruptcy of several mid-to-large developers with borderline unit economics: those I was thinking about have survived or even thrived in large part thanks to Covid forcing everyone to glue their eyes on screens, but it may be only a delay for the tumultuous times coming in 2021…
In the next 12 months, some of systemic changes I forecast include:
- As UA measurement gets fundamentally disrupted, it will come to nobody’s surprise that all eyes will move on incrementality & media mix modelling. It was already the case in 2020 for the smartest people in the space, it will now become everyone’s problem. While marketers will lose a lot of granularity (and false certainty…), they may gain in lucidity: this forced change should hopefully move their attention to the bigger picture and eventually lead them to better high-level decisions than their current narrow focus on questionably trackable ROAS.
- Some channels are strong at the very top of the funnel, such as Pinterest & TikTok, and were largely disadvantaged by the last-click model. More holistic measurement could help them gain in popularity as a consequence. The opposite may be true for search…
- Early aggressive monetization, a bad experience for users? Without full cohort data, marketers will pressure product design to become more aggressive and provide early monetization metrics to optimize from. I hope Apple will realize soon enough that the absurd timer limitations of SKAdNetwork v2.0 create collateral damage on user experience and will iterate to relieve such day-0 pressure.
- Remarketing is dead, long live lifecycle marketing? It took quite a few years for many to realize the potential of remarketing – which isn’t a surprise considering it’s normal to lose 90% of app users within a month. But that magical toy is gone. I predict that more effort, money, recruiting & agency will move towards lifecycle/retention marketing tactics, and in particular towards the underserved, highly flexible channel of in-app messaging (which games already exploit through live ops), “IAM” gives a huge opportunity for personalization and conversion at the frontier of product & marketing.
- Reconciling old & new data systems will be problematic. Stacks relying on user-level, MMP data being injected into BI and mixed up with product analytics will suffer a big loss in data quality. We’ll be forced to rethink data stacks, metrics, and analytical approaches. For the many PMs who never cared enough about traffic composition, it won’t make a huge difference, but for the smartest ones and most marketers, this is a critical issue. I’ll long remember the days we had the ability to differentiate cohorts developments over time or personalize the experience based on source/channel (something that had been extremely effective for the pioneers such as Lifesum or Hashtag Expert).
- Most comments above are mainly on iOS, the only store that matters to developers who monetize mainly through store revenue. My bet for Android: unless the regulator forces Google to finally start respecting user privacy, the GAID will survive in 2021.
- Web+App FTW! Apple may realize the full conequences of its radical and unilateral decision, as some advertisers shift budgets towards the web, for good and wrong reasons (a wrong one being avoiding the “Apple tax,” a good one expanding reach and diversifying away from dependency). For non-gaming and non-ecommerce apps dependent on store revenue (IAP/subs), this move isn’t trivial: funnel, profitability, channels are different, but maybe most importantly, the talent able to execute for the web & app stores contexts is scarce. I predicted in MADV that such cross-platform marketers will be in very high demand. Those who get among the first to achieve it could gain a massive competitive advantage.
If you see change as a risk or a threat, be prepared to get a ton of that. Change can be a chance too, and there will be opportunities to tap on. Diversifying platforms is a good thing for the long term. With lower targeting/optimization capability, ad inventory prices may drop (the big question being how much), a critical threat for the attention merchants who won the battle for eyeballs — as shown by Facebook entering panic mode lately — but for advertisers that could also mean coming back down from the insane all-time high of inventory prices reached in Q4, which have severely limited or damaged the ability of some publishers to keep growing. I won’t be crying for the duopoly ARPU loss, if it even happens. I’m also very curious to see how Facebook, Google, and other self-attributed networks’ reach evolves as they switch to SKAN measurement: there’s a ton of users that may start seeing your app install ads for the first time!
Overall, I believe the complexity of mobile marketing will rise, but more clarity may emerge from the mist for those who moved early on. Game on!
Shamanth Rao, Founder, Rocketship HQ
I see a number of key trends appearing on the horizon in 2021, most of which I see shaping up with the advent of the changes in the ecosystem that will accompany iOS 14.
Creative iteration gives way to creative strategy.
The current paradigm of iteration-driven production and optimization of ad creatives will become untenable in iOS 14. Creative production and automation at scale becomes less meaningful if there isnt granular data about variants and sub-variants to make decisions off of.
The iteration-driven approach of today will give way to one that is more driven by user research and an understanding of user motivations. Team structures will change as creative strategists or user researchers will inform creative production much more than media buyers will. Marketing will become more of a holistic function than one driven primarily by media buying — much in the way traditional brands operate today.
App store testing (CRO) attains wider adoption — and increasingly has a seat at the table.
One of the things that surprise me most in my work is how infrequently the vast majority of developers test or improve their app store pages. As understanding creative & messaging strategy becomes more critical, having this creative strategy inform app store testing (or CRO) becomes more critical for apps’ growth. More publishers recognize this – and start to see enough value to invest time and resources into thinking through and optimizing their app store experiences.
Tier 2 SANs gain share of spend among larger advertisers.
The consolidation of UA spend in Facebook and Google in the last few years has been primarily driven by their payer/purchaser graphs. In the absence of this purchase graph with the advent of iOS 14, there will be a leveling of the playing field in the favor of tier 2 SANs like Snap and TikTok, as marketers move budgets there as Facebook & Google performance degrades on account of the deprecation of their purchase graphs.