The new year has begun and it’s the perfect time to look to the year ahead. Some might feel trying to predict the future is like gazing into a crystal ball. Others – like us – will use the data we have collected to see through smoke and mirrors and make our predictions for 2023.
To follow on from our latest series of articles where we featured MMPs, Ad Exchanges, and Advertisers sharing their predictions, we interviewed a few of our team members at Aarki. We asked them to give us their take on the questions that have come up on the DSP side.
We discussed a range of topics – starting with the impact of inflation and global events, to the more specific issues facing our industry: how to manage advertising and marketing budgets, what trends we are seeing this year in terms of buying strategies and supply from ad exchanges, what advertising strategies to focus on in 2023, campaign management changes, as well as how the updates of SKAN 4.0 are affecting machine learning models and ad creatives.
Despite SKAN 4.0 adding an additional layer of complexity to post-backs and campaigns (sources), this version allows for more flexibility in generating and tracking privacy-preserving cohorts of users.
With the change to campaign (source) IDs to allow for hierarchical granularity, we can capture more variance in install sources, allowing us to make better, data-driven decisions.
Multiple hierarchical post-backs also enable advertisers to create a schema that iteratively refines the feedback that DSPs ingest for a single impression. This allows them to balance short-term agility with long-term user quality measurement. Furthermore, by ingesting second/third postbacks, we will be able to train longer-range models, which will result in more efficient bidding, and, ultimately, will allow advertisers to optimize their purchasing strategy.
Finally, advertisers will have additional flexibility to design their conversion value schema to send the most accurate information to their partners, as they are able to increment and decrement the conversion value.
- Igor Raush, Director of Engineering, Data Science
There are two methods emerging to help optimize creatives with less user data. The first is where advertisers use playable and other dynamic ad types to encourage a viewer to give real-time input. This input can then tailor the ad experience. For example, a playable ad allows a user to click on different options that go on to show different features in the app or game. You can then compare this to ads with a single feature and use identifiers like IDFA to target people who like that specific feature. Many advertisers have already seen success with playables, and with time, this method will evolve and more functionality will be introduced. In-ad personalization is used successfully in CPG brand advertising (think of the famous L’Oréal "Pick your makeup color" playable) and lends itself to gaming too. It plays a powerful role in many of the biggest games - from designing a castle in Royal Match, to picking a roster of Pokémon in Pokémon Go..
The second method to optimize creatives is to use the tools offered by exchanges and platforms like iOS to adapt the viewer's journey. Custom Product Pages together with various types of in-ad installation (e.g., Auto Overlay and SK Overlay) allow advertisers to manage the users’ experience. Creative optimization doesn't always need to be design intensive. Sometimes it is only needed when the CTA is displayed. Aarki has worked closely with both advertisers and exchanges to develop these tools (specifically Custom Product Pages and SK Overlay) to deliver results that have – so far - been astonishing. We look forward to releasing these features to all our clients very soon, in Q1.
Finally, let’s not forget that in 2023, SKAN 4.0 will be widely available. Currently, it's support is patchy, but we feel confident that all advertisers will soon use SKAN 4.0 as their default. This is exciting because:
- It supports hundred times as many "identifiers" (10,000 vs. 100) and so measurement and optimization can be done at a refined level of granularity - e.g. moving from the campaign level to the creative level of analysis.
- It provides three postbacks instead of just one.
- The postbacks give more detailed conversion values.
- There is more support for smaller campaigns where there was no conversion data available before – providing more data on lower volumes.
All this together makes for a promising 2023 for advertisers. With a robust strategy for playables, new ad formats, and the full utilization of SKAN 4.0, the industry is in a good position to claw back performance and data on creatives.
- Nilay Patel, Product Manager (Creative)
We’re seeing a lot of publishers integrating header bidding. For programmatic buyers or DSPs, header bidding has advantages and disadvantages. It can result in increased competition among DSPs with greater transparency to see the prices that their competitors are willing to pay for inventory; It also provides more access to inventory from a wider range of publishers - allowing buyers to diversify their media mix and reach new audiences. However, it can also be tougher for DSPs to win inventory at a profitable price due to increased competition. It is expected that it will continue to be a popular method for publishers to access a wider pool of demand and for DSPs to access more inventory.
We’re also bracing ourselves for the impact of Google’s Privacy Sandbox. Privacy Sandbox for Android is Google's proposal for managing privacy-safe mobile advertising on the Android platform. Google plans to phase out the Google Advertising ID or GAID on mobile, like SKAdNetwork works on iOS. Publishers may come up with alternative methods to monetize their inventory that could affect the buying strategies of DSPs and advertisers. At Aarki, we will support this and work with our partners to understand the impact in our ecosystem.
- Kim Aquino, Director of Partnerships
I think retargeting will be given more focus. In 2022, global user engagement experienced a slow down when compared to the peaks reached during the first outbreak of the global COVID pandemic in 2020. On top of that, thousands of apps are published every day. Users are spending a significant amount of time on mobile apps, as well as mobile web. As a result, competition is getting tougher in the mobile space.
There may be plenty of successful apps out there that can attract and retain specific types of users, but it doesn’t mean that marketers shouldn’t re-engage their users to keep their apps relevant, their retargeting strategy up to date, and their investment in user acquisition under review.
I think more brands will put more value on mobile app users and will strengthen their mobile media mix. In the last few years, we have seen the younger generation using TikTok to do internet searches. They spend huge amounts of time on mobile, and investment priorities will need to shift for marketers to stay relevant.
As more brand marketers invest in the mobile ad space, it will be interesting to see how the app industry’s costs will be affected. As it stands, 70% of the top mobile app traffic advertisers are in the gaming space, and performance-driven advertisers normally feel brand spend is wasted during peak seasons. I think this will change because brand marketers will be forced to re-evaluate their strategies to incorporate changes in user behavior (such as becoming more mobile). Also, data driven marketing will help brand marketers to see the entire customer ad journey. Marketers will be able to see how branding impacts conversion and use it more effectively to increase conversion rates.
The evolution of AI, measurement and other tools will help break down the silos of brand and performance. Audience profiling, full funnel media planning and the measurement of success will all be data driven.
Brand and performance will merge the silos and ‘brandformance’ will become the new norm.
- April Atkinson, Director, Sales Strategy
If you think 2022 was tough, you’ll be disappointed to hear 2023 is shaping up to be even more challenging. The focus will undoubtedly be on higher profitability, despite there being an economic slowdown. Mobile marketers will have more aggressive ROI goals and will need to work harder to increase their apps’ relevance and quality if they want to earn a spot in a market that has become more competitive than ever. All the more reason to have solid paid acquisition and re-engagement strategies in place with the right channels. The good news is it is proven that combining user acquisition and retargeting massively increases an app's monetization.
Data-driven user acquisition campaigns will deliver high-value users that will drive apps’ growth, while retargeting campaigns, backed by effective segmentation and personalized creatives, will drive higher retention rates and long-term engagement. Together, this will strengthen your app's monetization potential. Choosing the right channel that has the capability to do both is very important.
With the IDFAs missing and less data available, creativity is key for user acquisition as you must rely on user behavior and other cues to gain an interaction. For this, you should work with DSPs that have advanced and smart creative optimization platforms.
For retargeting, the scale of the DSP, plus its ability to segment to a granular level, is as important as the creative personalization in achieving a higher match and touch rate.
User acquisition and retargeting undoubtedly go hand in hand in 2023 (and beyond!) and are key to fueling your app's success.
- Claire Cruz, Head of Client Services, Aarki Asia
Absolutely! The last three years have been phases of react, adapt, and evolve for the mobile app industry. In 2022, there were several trends that impacted campaign strategy and management for mobile app performance marketers of all shapes and sizes, some of which are:
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The impact of privacy changes to precision advertising with Apple’s App Tracking Transparency Framework (ATT). This shifted ad spend from iOS to Android due to the sparsity of data which made iOS install buying less profitable.
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The new normalization of mobile app behavior following the pandemic. Countries easing lockdown restrictions from COVID saw changes in consumption as more consumers migrated to mobile for entertainment and life habits. This increase in mobile usage is accelerated further in emerging app markets which means marketers need to look globally for LTV.
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COVID supply chain issues impacted revenue for larger games companies that ship console games. This would have had knock on effects on mobile budgets.
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The recession in Europe and upcoming recession forecasted for the US, due to inflation and market instability. These economic challenges affected some non-gaming app verticals more adversely as consumers grew cautious with spending.
Campaign management in 2022 showed us that measurability, as always, takes precedence. Last year and even this year ahead, the macroeconomic headwinds have made the waters choppy for the performance buyer but the North Star that shines the way is adaptability using data, thinking outside the box, continued testing and focus on value. To say the least, there’s been a lot of learning in recent years.
For 2023, what could we expect for app campaigns?
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The overall market outlook looks slightly more promising compared to 2022 based on some discussions with partners.
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Greater focus in emerging markets such as LATAM, MEA, SEA and Africa, so campaigns will not just target the US.
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Big publishers could look to increase their market share as they prioritize mobile. In addition, games releases will be multiplatform and not solely on console to avert supply chain issues.
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More acquisitions and mergers. If you ever played Agario.io, we’ll see more of this in the gaming space as larger developer bubbles could get bigger by acquiring more/smaller studios as a way to avert UA costs and increase user base.
Our industry is getting more creative and innovative using AI tools like ChatGPT to optimize language and images. There are already self-optimizing creatives, such as playables, and it'll be interesting/scary to see more AI-generated campaigns in the future. Lofty ideas aside, the focus for Aarki is to support app advertisers buy effectively on both iOS and Android. As my colleagues shared, the addition of postbacks for SKAN 4.0 and some other new product opportunities like Custom Product Pages, SKOverlay, and Auto store Kit, would encourage further campaign growth in iOS.
- Nick Kramskoy, Senior Manager, Accounts
Bottom Line
Undoubtedly, 2023 will be different, and our four-part series on mobile marketing trends and predictions is there to help you navigate these changes. We aim to provide you with the information you need to plan, so you can reap the benefits of the constantly evolving industry. With our commitment and dedication to mobile marketers, customers can be reassured that they will continue to receive best-in-class service.
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