The Implications of iOS 14.5 For Subscription Apps
The iOS14.5 beta is already here, and now that the public beta has been officially dated to April 26th, marketers better be ready — according to a recent poll, only 13.5% are fully prepared — so let’s get caught up.
Suppose you have been in the subscription-based app business for a while. In that case, you know that finding the right strategy and signals to optimize your campaigns on, is a process that requires time, learning, measurement, and repeated optimization. And if you were comfortable with your UA strategy, the cards are about to get shuffled. I’m going to dive into what’s ahead, and the implications those changes will drive.
Why now?
As part of the broader global focus on data security and privacy, Apple announced the changes to its IDFA over eight months ago at the WWDC in June 2020. After delaying the launch date time and time again, the moment of truth has come, and it will affect everyone!
What’s ahead: changes to Apple’s IDFA will present new growth marketing challenges. Advertisers will have to navigate the delicate balance between users’ quality and quantity and learn to work with user value, not user actions.
User-level marketing data availability will decrease tremendously
iPhone users will now have to choose whether they want to opt-in to IDFA tracking for their individual-level data to be collected and analysed. Only 10–40% are expected to do so.
Opt-in / Opt-out rate affects user-level marketing data
Networks will no longer be able to automatically track the ad clicks a user makes across different websites and platforms. The ad campaign success measurement will have to go through Apple’s API for ad networks, SKAdNetwork. Cohort reporting on the 80% is going to be much cruder, more limited to the first couple of days of a user’s lifetime, and with a lot of “missing” data (the lower priority events will not be reported, and the higher priority events that happen “too late” will suffer the same fate).
The implication is that advertisers will have to make projections and decisions based on the much smaller and partial number of users that opt-in and events reported at the cohort level, so balancing quantity and quality will be front and center.
Retargeting gets a lot more competitive
While remarketing through email and push notifications is still available, with such a low projected number of users opting in, there will be a smaller audience base to build retargeting campaigns, and that means that retargeting is going to be a lot less effective. Many subscription apps, especially ones with a free trial, focus on retargeting as one of their main strategies. Companies will have to adjust to higher competition for the smaller potential audience as remarketing will only be possible for opt-iners, and therefore will be more expensive and will yield a lower ROAS.
Additionally, the opportunity to optimize a campaign using Facebook measurement reporting will almost entirely disappear due to lack of visibility into age, gender, and region, as that is considered to be user-level data.
Taking under consideration all of the challenges described above, marketers will have to rebalance their budgets towards prospecting and rely a lot more heavily on their first-party data for remarketing campaigns via text or email.
Lookalikes are a new challenge
The difficulty in using tools like lookalike audiences stems from the fact that lower numbers of opt-iners make it challenging to create lookalike audiences. For example, on Facebook Ad Manager, advertisers need 100 people who triggered the same event in 7 days. Limited third-party data will likely lead to a lower quality of custom and lookalike audiences. To avoid settling for lousy traffic, advertisers will have to get sharp on signal selection to build lookalike campaigns and rely on broader audiences than they were used to.
Accurate attribution will become a big challenge
The deprecation of the 7-day view-through, 28-day view-through, and 28-day click-through attribution windows will affect the way you measure your attribution today.
Whether or not users opted in, all attribution will be cut to 7 days. FB might even reduce this to 24–48 hours. That’s a lot less time to extract quality conversion and attribution data. This will mean marketers will suffer a lower attribution quality and will need to give up meaningful events such as subscriptions and upgrades favoring upper funnel conversions.
Changes to the measurement of costs, revenue, and ROAS
Conversions and measurement reporting will be cut on day 7, and if you’ve been using longer conversion windows, get ready to change the way you measure your cost per conversion. For return on ad spend, you will only be able to measure the 7-day ROAS, meaning the costs you’ll see in the ad manager will be higher than you’re used to. Furthermore, most MMPs and ad networks recommend even cutting this down to 1–3 days to deal with the additional 48–72 hour delay between when an event occurs and until it is available to the network. We might even see this enforced, so get ready.
There will be fewer signals to rely on
Whether or not you have an app, these changes will affect you. If you don’t have an app and you’re on the mobile web, you will still have to work with 8 event limits or custom conversion events — per top-level domain.
Whether they use an MMP or the Networks’ updated SKAdNetwork-ready SDKs, companies across the board are going to have to roll up their sleeves and make some serious cut downs. It won’t be possible to optimize ads beyond the prioritized 8, meaning there will be no reporting of anything that doesn’t meet the prioritization benchmark.
Subscription apps will have to find the right signals to optimize for
The changes affect the mid-lower funnel, which is precisely where we usually find the events that drive so many of the conversions for subscription apps. Finding a way to extract value from the events happening earlier in the engagement cycle will be a real challenge. How do you mitigate the risks associated with these changes? As attribution is bound to decrease, marketers will need to rely on new strategies and leverage their first-party data.
If previously, you could follow the user from registration and free trial to paid subscription and type of use, noting what event caused them to convert; with iOS 14.5, you no longer have that option. Following iOS 14.5, marketers should create hierarchical events that correspond to a score. For example, an amplification event where the user has a free trial but uses the app daily would be given a high score.
Taking this notion to the next level, I believe that predictive modeling would play a leading role in leveraging first-party data to truly embody users’ future value, and will provide a significant competitive advantage for those brands who will implement them early on.
Final Thoughts
When iOS 14.5 officially launches, it will seriously change the rules by which many marketers operate in the mobile sphere and the new status quo feels a bit overwhelming.
The new Apple OS requires explicit consent, thus decreases dramatically the volume of IDFA and changes many marketers’ BAU and best practices.
Many important functionalities won’t be as widely available, so the savvy marketer must re-strategize their mobile campaigns, budget allocation, measurenet and optimization capabilities. This is not a simple task, but to me, one thing is very clear; putting your focus and investment on improving internal data and modeling capabilities is the best course of action to provide marketers with that competitive advantage.
Have any questions on iOS 14.5? Feel free to reach out .
