App companies are now feeling the financial impact of the privacy changes rolled out by Apple in April 2021 (part of iOS 14.5 release). Users now have to give explicit permission to allow app developers to track their behavior on their iPhones and this has led to less targeted advertising (App App Tracking Transparency (ATT) is covered comprehensively on the Apple developer site). So, what’s the financial impact of less targeted advertising?
Well, if you are one of the big advertising platforms that app marketers use e.g. Facebook, then it means your customers are spending less on advertising. A recent Financial Times article revealed that Facebook, YouTube, Twitter, and Snap collectively lost 12% of their advertising revenues in Q3 and Q4 2021 from users choosing to opt out of ad tracking on Apple devices. That equates to around $10 billion in revenue.
And what about the app developers and publishers who rely on these platforms to acquire users? In simple terms, they must target more users to get the same yields they got before the privacy changes were rolled out. Advertisers may lose 50% of their ad investment because they’re no longer able to target audiences as precisely as before. That means they’re often left having to target twice the number of consumers e.g. for an ad you want to display to 1,000 men, you may need to show it to 2,000 people, roughly half of whom are men.
It’s not all doom and gloom though. There are ways to maximize your ROAS in these testing conditions. New platforms and innovative audience providers offer more cost-effective ways to acquire users at scale, with good ROAS.
Advertisers are pushing ahead with the new kid on the block, TikTok Ads. Bango Audiences clients and more importantly the wider market, are seeing good results with UA campaigns on TikTok Ads. Good results specifically translate to lower ad costs and better ROAS. This trend is likely to continue, we expect to see more and more budget transferred to TikTok Ads in 2022.
When you are in a tight spot financially, then it’s best to look at how to use the advertising budget shrewdly. Bango provides the best custom audiences on Facebook and TikTok to acquire users who pay in your apps. Advertisers prefer to acquire users who pay for obvious reasons, they account for most of the revenue. However, they are in short supply as only 5% or less of users make a payment. So if you have a limited budget, it’s a better to laser target those high value, high paying users, even if they cost a little more to acquire.
Expect to see more innovation to navigate these turbulent times but in the meantime, if you want some alternative strategies to optimize your budgets, we can help you – email@example.com