💎 Growth Gems #49 - Gems from "IDFA Loss: Real Data & Real Talk"
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Today's gems are mined ⛏️ from a GameMakers panel where Joseph Kim (CEO of LILA Games) talks about the real-world data and the implications of IDFA deprecation with Brian Bowman (CEO of Consumer Acquisition - Creative Studio and UA services), Matej Lancaric (Independent UA & Marketing Consultant) and Warren Woodward (Co-founder and Chief Growth Officer at Upptic - Growth Services).
Great insights on the loss of performance advertisers have been seeing recently, winners and losers so far and how to adapt. A must read, even for non-games!
Consumer Acquisition is seeing iOS revenue down 15-20% across their portfolio of companies, with different impacts for subgenres: the most impacted are games targeting narrow audiences (hunting whales) and apps monetizing with in-app ads.
In their earnings, Facebook is reporting that impressions are up 6% and CPMs are up 47%. This means that click-to-install quality is down.
In their earnings report, Apple is projecting their services revenue will be down for the second half of the year. They’ve started realizing what the data means in terms of the impact on their own business.
There was lots of talk about how to best operate in the new environment (structure, conversion scheme, etc.), but the reality is that a lot of advertisers have just paused or decreased spend.
AppAnnie came out with research saying social casino and strategy games are being hit harder. Customer Acquisition also believes hardcore and hypercasual games are also heavily impacted (hypercasual because they rely on low CPMs).
If people want to play a game and there are no ads, they will look for a game they can remember. So games that have more presence of mind (i.e. a stronger brand) therefore have an advantage.
Some brands have a tendency to buy on a blended model, combining organic + paid. Smaller studios tend to focus on direct UA performance, so their KPIs will look worse because a large percentage of downloads are not tracked as well.
The spend has been shifted to Android and right now iOS looks like the whole UA space last year when Covid started: very low competition. It’s probably just a phase. This would explain why Supercell, Clash Royale, etc. have seen spikes.
With the loss of IDFA, the performance of lookalike audiences is half what it was before May 26 (based on a large spectrum of clients). With a limited number of people opting-in to be tracked, the custom audiences are very small and lookalike audiences don’t last long. This is true for Facebook (AEO, VO) as well as other ad networks with algorithms using app events. [Brian, Consumer Acquisition]
For Consumer Acquisition’s portfolio, Google is less negatively impacted than other platforms from both a ROAS and a spend perspective. One reason might be that Google was already probabilistic in nature.
Unity is a clear winner of the last couple of months.
Both ironSource and Unity have been using the term “contextual targeting” and feel like they’re well positioned to take advantage of that. Both are bullish on the stability of their network, and where they’re headed. Unity captures and analyzes 50 billion in-app events per day.
Upptic sees that on iOS, for certain apps, SDK Networks have started to represent a bigger proportion of the profitable spend than FB/Google. However a possible reason is that major networks are still relying on probabilistic attribution through MMPs, and this might not be a short-sighted approach.
Consumer Acquisition is seeing a 15-20% ROAS loss overall, but with some categories much more impacted (e.g. apps whale hunting vs. match-3 games).
If you’re a network and you’ve lost your ability to deliver high-value users, you’re going to put more lower-quality traffic into the mix.
Good UA has a halo effect, especially for large titles. So when Upptic is still working off old prediction models for an app and UA is not as good, they’re also seeing organics trend down.
Any team is going to have to get into the game of prediction, whether they’re comfortable with it or not. If you’re not yet tracking opt-in and opt-out events yet, start working with your product team because you will need that data in the future.
Decreasing spend on iOS can help you better identify the campaign performance by looking at blended ROAS. You can see the baseline of organics drop as you decrease spend from a source.
Things with the best performance right now: top countries, localized ad copy with AEO (ideally with broad targeting) and interest groups (formulating contextual mapping).
On paid social, if you don’t get your marketing and product teams working together to come up with a new way of working (including to get ahead of creative fatigue), you’re going to be a dinosaur.
A persona-led approach throughout the funnel (interest groups, ad creative, onboarding flow) is hard but seems like a sustainable long-term strategy.
You gotta treat your ASO as you treat your ads portfolio: testing, innovating, refreshing. It will also benefit your organic conversions too.
Warren from Upptic thinks that SKAN is not the long-term solution for a viable UA. Either it has to evolve or the industry has to build a superior approach.
Creative testing on iOS is dead. Don’t waste your time. Creative testing is all moved to Android.
For creative testing, Consumer Acquisition uses Singapore and India on Android as a proxy for the US. It works really well (no issue with cultural sensitivity) and it’s a tenth of the cost.
If nothing material changes, then media mix modeling and targeting clusters of users will be what we have. It won’t target the individual and will be substantially less efficient. It’s a very likely path.
In iOS 15, there will be cross-network attribution and it will normalize the way traffic looks across all platforms. It will put the networks on parity.
What will be very important moving forward: onboarding flows, early monetization signals and a deep understanding of your personas (who you’re building for, what do they read/watch/listen to and their motivations in the external world). This will allow you to cluster creative and interest. Example of campaigns: targeting people that like to kill each other vs. people that like to relax vs. people that like to complete levels.
Winners: large companies with large first-party data reservoirs, midcore games with broad monetization profiting from other games not able to target whales, IP games. Losers: companies spending less than a million a month on advertising, companies primarily relying on ad monetization, companies that don’t have the cash flow to roll-out an 18-month LTV window and sustain it.
And before I leave, a friendly advice for UA managers:
Now you MUST be friend with the product team - Matej Lancaric