How iOS14 might change consumer behavior on mobile

In considering the monumental changes coming to the app economy with iOS 14 and its attendant deprecation of the IDFA, it’s useful to consider not just how advertisers adjust to this new environment, but also how this new environment catalyzes changes to consumer behavior.

Advertising influences the user experience; people respond to ads through clicks but also through broader product engagement. An anecdote that I relay often from my time at Skype: we conducted a survey of users to gauge receptiveness to ads being introduced into the product, and most respondents believed that Skype already included ads. “It’s a free product, so it must make money by showing ads to users?”

What happens when the ads that people see in the products they use every day — Facebook, Instagram, mobile games, etc. — become irrelevant and noisy? How do users’ behaviors change to adapt to this new product environment: one in which they are exposed to ads that are in no way germane to their lives or preferences? A few thoughts:

Increased app store search. I argued in Why is Apple rebuilding the App Economy? that one of Apple’s motivations in deprecating the IDFA was to wrestle editorial control of the App Store away from Facebook, which effectively controls app distribution through precision advertising. Facebook has gotten incredibly good at aggregating in-app events from users and using that data to help pair advertisers with the users most inclined to monetize. Through the natural selection of the advertising auction mechanic, the apps that best monetize users are given preferential access, via ads, to the users that monetize the most.

In this dynamic, Facebook front-runs app store search: users never get bored enough, or feel that their time is being under-utilized enough, to search for a new app, because Facebook and Google and others are constantly exposing them to very relevant ads. Now, users will be exposed to wholly irrelevant ads, and they will feel like their time is being under-utilized and may be driven to more proactive app store search than exists now. What does that new reality look like, and which companies win in that environment?

Increased Limit Ad Tracking opt-in. The new privacy opt-in being introduced in iOS 14 applies to every app, and so users will see the opt-in prompt for each new app they download, but also (presumably) for each existing app on their phone that is opened after an upgrade to iOS 14. These pop ups might become irritating; it’s not a stretch to imagine that an outlet like Buzzfeed publishes a piece titled, “How to get rid of the annoying pop-ups you’re seeing after upgrading to iOS 14” that exhorts users to simply turn on limit ad tracking (and educates them on how to do that), which will prevent ad tracking at the system level and thus obviate the privacy popup.

The new limit ad tracking setting in iOS 14 is shown below: this is ominous wording. Would users not simply turn this on to avoid seeing popups? And if they do, what percentage of users are trackable at all — less than 10%? How does that change advertisers’ abilities to sample from opt-in traffic and apply what they learn to opt-out ad optimization?

A move to the middle for gaming. The extreme ends of the mobile gaming spectrum — “core” games driven by regular in-app events and extreme in-app purchase monetization, and hypercasual games that monetize exclusively through advertising and allow the aforementioned core games to go “whale hunting” via IDFA-targeting — thrive in the current, profile-centric advertising environment, and both of these categories face significant headwinds when the IDFA is deprecated. Where do the current players of these games go?

I think gaming probably moves to the middle: not only do the games become more broadly appealing cosmetically but also in terms of accommodation of play preferences. What games do players shift into when they aren’t able to be “acquired,” either through precision advertising targeting or via the gravitational pull of the most recent hypercasual hit? How does a mobile gaming studio create an experience that satisfies a broader group of players?

These second-order questions — of what happens when advertisers adjust to the new reality an advertising marketplace absent of device identifiers, creating new consumer behavior patterns that must then themselves be confronted — are important for advertisers to think through as iOS14 approaches.

Photo by Joshua Hoehne on Unsplash