Ad spend is up 8-21% on Android and has dropped on iOS over the last two weeks, according to a consortium of mobile advertising companies. Also, mobile app publishers are making less money on ads that they show in their iPhone apps: up to 9% less.
Apple’s new iOS 14.5 iPhone and iPad software, which limits ad targeting data availability by making ad tracking opt-in.
“I don’t think anyone in the industry is surprised to see marketers shift some ad dollars to Android upon the release of iOS 14.5,” says Dennis Mink, senior vice president at Liftoff, the company that started the Post-IDFA Alliance. (Full disclosure: I co-host a podcast sponsored by Liftoff.) “On Android, marketers still have full visibility into what drives performance at a granular level and can optimize to their hearts content.”
Apple released iOS 14.5 two weeks ago, after alerting the mobile industry in June last year that major changes would be coming to how adtech companies access an iPhone device identifier known as the IDFA, or Identifier for Advertisers. While the IDFA was freely accessible for most of a decade, now mobile developers have to request access to it from people via Apple’s new App Tracking Transparency prompt.
Early indicators are that most people are declining to share their data for ad targeting purposes
And that is shaking up the mobile industry.
Companies that have a lot of internal data already can probably weather the storm; companies that lack first-party data are being forced to join forces with others to assemble larger databases to enable ad targeting and relevance, App Annie CEO Ted Krantz told me recently.
For now the biggest impact is a shift in ad spend from phones running Apple’s mobile operating system to Android, Google’s mobile operating system. All Post-IDFA Alliance member companies saw a major increase in spend on Android following the update, Liftoff says. Liftoff advertisers’ Android spend went up 8.3%, while mobile advertising platform Vungle saw a “whopping” 21% increase in Android ad spend over the past two weeks.
Meanwhile, ad spend on iOS has cooled slightly.
It’s not huge — Liftoff says it’s from 2.5% to 3.6% — and it’s not entirely across the board. Vungle actually saw an increase in iOS spend of 3.3%, so it’s possible that this particular adtech company is simply growing in general and boosting the per-platform numbers a little artificially.
In any case, Mink says mobile ecosystem players shouldn’t hit the panic button or over-react to the changes just yet.
“It’s early days,” he added. “As more users adopt 14.5 and marketers get comfortable with the new normal on iOS, most of us expect ad spend on iOS to fully recover.”
Interestingly, iOS 14.5 adoption has been fairly slow. Apple is known for its customers’ rapid adoption of new operating system, particularly on mobile, but only about 11.5% to 14.9% of iOS users have updated their phones and tablets so far. As the slower adopters upgrade to the latest version of iOS, we’ll get better data on IDFA opt-in rates, Liftoff says. It’s possible, for instance, that more tech-savvy early adopters are less likely to opt into ad tracking, while later adopters may just tap “Allow” out of GDPR-style this-site-uses-cookies habits.
“This is a low adoption rate so far, relative to past iOS updates,” the company noted in a press release. “As the market grows, the industry will have greater insight into the true impact of the update.”
The good news for marketers, I suppose, is that iOS ads are getting cheaper.
Ad impression costs are down 2.4% according to Liftoff’s internal data, while another alliance member, AdColony, is seeing drops of 8.7%. This was expected, and Liftoff expects rates to rise as the entire mobile ecosystem adjusts to the changes.
Looking for more information about this shift? Here’s a primer on how this entire situation developed.