Mobile Marketers Pivot Away From Paid Media After Apple Upends Industry

Apple upended the mobile advertising ecosystem when it implemented its App Tracking Transparency framework last April, wiping out the mobile identifiers brands use to target their ads and measure the impact of their marketing spend. Now, many mobile marketers who have traditionally relied on mobile media to encourage installs of apps and spending on those properties are relying less on paid advertising on mobile altogether. Instead, marketers are leaning more on email marketing, affiliate and content marketing and even diversifying to other mediums like connected TV, digital out of home and audio for mobile outcomes, four industry sources told Adweek. Perhaps unsurprisingly, more advertisers are making use of a brand’s existing owned and operated channels, like their apps, websites and email newsletters, where they control the environment and don’t have to pay for advertising. “Measurement of these owned and organic channels hasn’t been impacted by privacy [changes],” said Alex Bauer, head of product and market strategy at Branch, a mobile ad-tech firm. “You can still get better visibility into whether your email campaigns are working than ad campaigns.” Data tells a similar story. On average, the number of installs driven by owned media has increased by 25% per account, while paid media spending increased by only 3% between the first half of 2022 and the second half of 2021, according to advertisers on mobile tracked by analytics firm AppsFlyer. And as performance of paid media slides, data finds owned media is more effective too. There was an 18% increase in app installs driven by owned media in the first half of 2022 compared to the back half of 2021 on Android, while paid media only increased app installs by 2%, according to AppsFlyer. On iOS, owned media drove 30% more installs in H1 2022 than H1 2021, the firm found. iOS Continues to Hold Onto Market Share Despite Privacy Changes, New Report Finds The problem with paid media Before Apple deprecated mobile identifiers, a marketer would be able to tie the exact person who saw the ad with the person who downloaded the app. Under Apple’s new privacy regime, this information only comes in aggregated form to conceal users’ information for most media. For smaller businesses, there are simply not enough app installs in a given campaign to make the batched reports meaningful, said Daniel Pearson, co-founder and CEO of Bamboo, a performance marketing agency that works with many app clients. “The algorithm decides who is targeted [and] so much of the campaign flight and performance,” Pearson said. “If you’re not passing enough data on a per-campaign basis, the algorithm can’t learn as quickly.” Ad-tech challenges mean there is less high-quality mobile inventory than there used to be, driving up CPMs, Bauer said. The lower return on ad spend for paid media is particularly challenging for marketers already pulling back in an uncertain economic climate. Ad budgets for app install campaigns dropped 14% in the second quarter of 2022 from the first quarter of 2022, compared to a 2% increase between the fourth quarter of 2021 and the first quarter of 2022, AppsFlyer found. Not all media channels are created equal. Apple Search Ads have tripled their market share since the first half of 2020, according to AppsFlyer (albeit, perhaps from a small base). Apple's search ads which exist in its app store still have the kind of precise attribution Apple has forbidden on other media. But the platform is still not as advanced as other channels in terms of its advertising capabilities, sources said, and only captures users who already have intent. “You’re trying to help people discover your product versus demand capture,” Pearson said, noting why other channels like TikTok and Facebook still have salience, despite their deprecated measurement abilities. The allure of owned media With paid media on mobile both less effective and more expensive, marketers are looking for other options. One appealing tactic is to make more money off existing customers. “We’re really focused on retention of customers,” Pearson said. “You have to pay more to acquire [customers] so we need [customers] to spend more.” Such is the importance of what the industry calls “lifecycle” efforts, or customer retention, that Liz Emery, vp of mobile and ad tech solutions at performance marketing agency Tinuiti, doesn’t even look at app installs anymore to judge a campaign’s effectiveness. More important is how many of those that downloaded the app actually subscribed or made a purchase, she said. Clients are investing in making their owned properties more effective at bringing in users, Emery said, through practices like search engine optimization and app store optimization, or making the text, metadata and iconography more compelling when users look for the app in a mobile app store. Email marketing, texts and push notifications can help keep customers engaged once they’ve downloaded. “Brands have these owned properties,” Emery said. “They’re investing in efforts to make these owned pages work harder.” Apple Has Finally Implemented Its Privacy Overhaul, Here's What You Need to Know With the traditional mobile marketing playbook scrambled, Emery’s clients are also turning to non-mobile channels like connected TV, audio and digital out-of-home to bring users to their apps. The consideration of these media types is reflective of a paradigm shift in mobile marketing, where previously marketers could dump spending into platforms like Facebook without much thought to whether it would work, three sources said. “There’s much more rigor around making sure the ad spend is profitable than there was,” Pearson said.