Last year’s predictions post: 2020 predictions for mobile marketing. Note: this is the first part of a two-part prediction series. Part two will be published next Monday, December 28.
I considered not publishing a predictions post this year because 2021 feels fundamentally unpredictable. Apple’s announcement at WWDC that it will deprecate the IDFA and introduce the App Tracking Transparency framework was foreseeable; I presented a hypothetical chain of events catalyzed by IDFA deprecation back in February, and frankly, I had expected the IDFA to be deprecated at WWDC 2019.
But 2021 is different. Every player in the ecosystem has been put into a defensive posture and sits on far less stable ground than they did at this point last year. Perhaps the lack of clarity around how the mobile advertising ecosystem will evolve in 2021 renders a post like this even more necessary. But if the degree to which 2020 has progressed through a series of anxiety-inducing announcements continues unabated, 2021 certainly promises to be lively.
Daniel Barnes, COO & Head of Platform (NSP) at N3TWORK INC.
2021 will be dominated by the privacy-focused changes initially from Apple and then maybe from Google. We already know the format of the SKAdNetwork changes to some extent, but the ramifications of those changes will be seen throughout the year.
Firstly, I believe that that will be an arms race for the ownership of conversion values. Ultimately the owner of the conversion value will dictate where the majority of UA spend on iOS goes. This will result in Facebook, MMPs, and developers contesting who decides the schema of conversion values. My bet is Facebook wins by owning or effectively owning conversion values through a bridge to their internal data set.
I do not believe that Google will make privacy-related changes to the extent that Apple has. Google already believes that GAID is privacy compliant, and given that they are an ad network at heart, they have much more skin in the game when considering the impacts to their revenue.
Data is a lagging indicator, and as such it has led to a set of high-iteration, low-value behaviors in UA. The above privacy changes will, in my opinion, result in the pendulum swinging back to somewhere between product marketing and performance marketing. This will lead to a general increase in the quality of creative that we see and a reduction in the “Data only” focus that the majority of UA teams have.
I believe this year will be the year that we truly see a decline in Hyper-casual. The main driver of this will be the fact that the advertisers who were bidding high CPIs on that traffic, in the hope of finding one or two high-value payers that pay for all of the other wasted impressions, will dissipate. The reason for this is advertisers who use high-risk, high-cost, high-reward strategies will no longer have the user-level information that they had before to enable them to understand which strategies work and which do not at the level of the individual user. The only thing that they will understand is aggregate level information and as such, they will be more risk-averse, leading to lower CPIs and lower eCPMS on the ad monetization side. The margins will become too fine for Ad networks and as such hyper-casual will become unviable.
I do not believe that having many DAU combined in hyper-casual titles is actually a viable strategy against IDFA deprecation. The reality is the percentage of those users that have IAP capable payment processing means is extremely low and as such the value is really only in showing another advertising impression. This means the strategies that companies like Zynga have employed to stave off the risk of IDFA deprecation will prove to be shortsighted.
Lastly, the true winners of 2021 will be the products that understand that LTV and CPI are two sides of the same coin. Hyper-core will be a dominant strategy in 2021. Games that have high IPM, low eCPI, but exceptionally high early conversion to payer will be the staple in 2021. We will not see another Game of War-esque success.
Filippo De Rose, Chief Growth Officer at Traplight
The biggest challenge for people in our space, especially in 2021: get out of our comfort zone and adapt to the paradigm shift in tracking as privacy impacts how we execute and measure marketing. Two cliché buzz words we need to “deconstruct” and relearn are: creative and incrementality. Health warning here: these are all predictions, inherently data fewer theories!
Creative, which is often misconstrued as the least scientific aspect in our field, is indeed becoming perhaps the only element we can have real total control of in marketing, so what it really needs is a solid data infrastructure to support it. If you took a simple approach, we could breakdown into 3 distinct pieces:
- a background, setting the scene,
- a midground showing the MC of the message (human, alien, machine, etc),
- a foreground with some interaction, or speech, or object, etc.
These are the variables you can control with your assets and they can be associated with a verified KPI, ideally IPM. Once we have built a significant number of assets in this fashion, we can then run intelligently as many permutations as needed to scientifically find the winning combination that drives successful creative.
2021 might just be the year we finally push business intelligence to creative in order to “rinse and repeat” these permutations because as your audience grows, so should your message change to appeal to different personas. Of course so should the store page but let’s park that can of worms.
Whatever becomes more data-driven in 2021, creative or not, we need to demystify incrementality. In a business where there is no “official truth” (aside from what the stores pay you in revenues!) you have to establish the meaning of “lift” relevant to your business by answering a few simple questions (which could be cohorted by geo/channel/platform) e.g. freemium game :
- How much more conversion to pay are we seeing from paid media?
- How much more FTUE conversion is being observed by buying users?
- How much is the revenue incremented by investing in both channel A and channel B or can we just invest in channel A?
We are going to have to step out of our comfort zone that ROAS that has provided us for years with a false sense of “deterministic security” based on widely adopted inaccurate attribution models. With lift driven KPIs we can build scorecards for every channel based on the weight of each KPI and invest in that media accordingly. We should also be able to understand better the “true value” that the SANs bring to the table without having to “default” to them as standard.
Last thing for 2021: talent management. As the damned 2020 taught us, there are pros and cons to Work From Home, but most importantly we have to learn how to manage and retain talent in these distributed virtual teams. Most talent practices are constrained by physical presence and now we must strive to appreciate what matters to employees not just in the office but also at home. Management must get “personal” as we enter each other’s homes and OKRs should take care of one’s health and family as much as the business.
Paula Neves, Product Manager, Square Enix Montreal
Product and UA teams become one
With iOS14 coming in January, more than ever the product and user acquisitions teams will need to be one and the same.
With SKAdNetwork’s complex timers for conversions, UA will start shaping more and more the way the player journey and monetization is designed within games (rather than the other way around). There will be an even bigger need to focus on the first 24 hours of the users and these two teams will really need to design together the First Time User Experience.
The Battle pass type monetization will grow in 2021 as it proves to be a model that is more compatible with the post-IDFA UA world. Games will be looking for higher conversion at lower price points because UA teams won’t be able to afford to bet $50 to acquire a whale when they can’t target historical monetizers. This will be especially true for hardcore games, which will need to shift their monetization strategy to focus more on the top of the funnel.
Lastly, this could also impact the nature of M&A in 2021, where more companies will be looking to acquire big user bases to potentially own their IDFVs.
Eric Seufert, analyst and owner of Mobile Dev Memo
2021 is likely to be a year of foundational stabilization: Apple disturbed the status quo, and the major participants in the mobile advertising ecosystem will need to establish new operating norms. This will entail a great deal of experimentation and trial-and-error, some of which may result in novel new advertising products and services.
ATT will be made mandatory in March. I don’t believe that Apple will offer any additional delays to ATT implementation or change its scope, and developers will need to implement ATT as it is currently understood. No substantive workarounds or loopholes will surface that allow developers to evade the impact of ATT.
App advertising spend on iOS will contract by 30-40% over the course of Q2 following the rollout of ATT. Advertisers will immediately scale their spend back once ATT is made mandatory as they observe how CPMs, install rates, etc. react. This pullback will persist over Q2 2021 and will be meaningful: 30-40%.
Advertisers with products in the “broad middle” will scale their ad spend in the second half of 2021. CPMs will decrease as competition for the best-monetizing users abates (since they are no longer specifically targetable), but some companies with products that fit into the “broad middle” of consumer appeal may not see their funnel conversion metrics degrade to the same degree, allowing them to scale spend.
Demand for PMPs and programmatic direct placements will increase. Large, multi-product companies will recognize the need to in-house programmatic advertising, with contextual analysis being seen as a competitive advantage. PMPs will become increasingly popular as companies seek to buy relevant, pre-vetted traffic, and so will direct placements.
Facebook experiments with projects that blunt the impact of ATT and marginally increase efficiency. Facebook will test a number of methods for improving ad targeting with contextual or aggregated signals and differential privacy techniques, some of which may be successful at marginally winning back some of the efficiency lost with ATT. I also think Facebook will make more aggressive moves in shifting content either entirely to within its app (eg. Facebook / IG shopping, which takes place in FB-loaded modals and is entirely first-party) or on the open web, such as with its new gaming platform. The war between Facebook and Apple will intensify, accelerating the world closer to the future of mobile content platforms.
Android becomes the new battleground for advertising inventory and some apps abandon iOS advertising altogether. Android might become the only platform on which certain types of apps are able to capably advertise; as some developers shift their focus to more broadly-appealing content themes, others simply stop advertising on iOS and focus exclusively on Android as their apps. The most attractive Android inventory becomes even more competitive than top-tier iOS inventory.
D2C advertising spend decreases by as much as 50%. Facebook dropped a bombshell on the advertising industry last week when it announced that app-to-web campaigns would be impacted by ATT restrictions, which means that D2C campaigns will become much less efficient as ad performance is aggregated at the campaign level. Most D2C companies are almost entirely dependent on Facebook’s ability to target historical spenders and email lookalikes for growth, and this change to app-to-web targeting and measurement will imperil the D2C business model.
Google will announce a privacy preservation policy with respect to the GAID near the end of 2021, but it won’t be as impactful as ATT. I don’t think that Google will fully deprecate the GAID, instead electing to keep it hidden from advertisers while still processing it via Firebase and passing it to ad networks (including its own!).