Mobile Marketing Trends and Predictions That Will Shape 2023: Ad Exchange Edition

The last couple of years have been full of challenges and opportunities for the mobile advertising industry. Market players are thinking bigger, acting smarter, and finding better, more comprehensive solutions. With a seemingly never-ending series of mergers and acquisitions and a fierce race towards 1st party data, these years have reshaped the patterns of mobile advertising. 

We are excited to look ahead to 2023 for another year full of innovative and creative ideas, confident that challenges are opportunities for new achievements.

With this, we have gathered thought-leaders from all the major ad exchanges including Appodeal, Chartboost, Digital Turbine, InMobi, IronSource, and Unity who share their thoughts on the top mobile marketing trends for 2023, their predictions on the app verticals that will gain momentum next year, as well as their take on the hottest topic of 2022 - mergers and acquisitions (M&As). 

Appodeal: At Appodeal, we have observed significant growing verticals or trends: m-commerce, shopping apps, and gaming. M-commerce has been growing significantly since the time of Covid-19 and is unlikely to lose momentum shortly. The demand for it also continues to grow and is predicted to double by 2025. Although there is a slight slowdown in mobile gaming revenue growth this year, ad investments will continue to grow in 2023. In gaming, hybridcasual is gaining momentum, which will probably continue to unfold next year.

 - Tanya Moroz, VP of Customer Success, Appodeal (Stack)

Chartboost: From our perspective, casual and hypercasual will continue to experience tremendous growth next year.  With the economic downturn and continued decline of in-app purchases (IAP) as a response, marketers will start to turn to in-app advertising as a means to compensate and still be able to achieve their goals. This fits perfectly with the casual and hypercasual categories, which rely on hybrid monetization to deliver results.  With one of their primary goals being to target highly engaged users who will spend more time in their game and use ads to monetize them and their offering further, developers and publishers in these categories are perfectly positioned to capitalize on this change in the economy and user behavior.

 - Nikhil Mishra, SVP of Product, Chartboost

Digital Turbine: We're in a challenging macroeconomic environment, and marketers are being cautious when approaching their paid media strategies. 2023 could see growth across all verticals should the broader economy improve. Few marketers are bold enough to take advantage of more efficient times like now and will instead look for external indicators of how aggressive to be with their spend. We've seen the greatest pullback in branding and awareness spending, but it will come roaring back across all verticals in the second half of 2023 once global markets show the current bear market is over.

 - Ben Holmes, VP of Performance Revenue, Digital Turbine

InMobi: Mobile games will continue to increase in ad spend next year. Mobile games, especially casual and hypercasual games, have very diverse audiences. And they will continue to be good value for money for advertisers across categories. In addition, app categories like news and retail that tend to have more first-party data will gain ground on others.

- Pamela Ibarra, VP - Partnerships and Revenue, InMobi Exchange

IronSource & Unity: While the 2023 market for ads is experiencing a recession sentiment, we believe strong consumer engagement and the ability to maximize budgets will ultimately bring back growth to the dynamic ads market. This presents an opportunity for more ad spend in more resilient app verticals. Since 2015, gaming has historically been more resilient in times of recession and inflation. In addition, we see an increasing investment in mobile gaming with AAA studios adapting their games for mobile platforms (e.g. Genshin Impact and Apex Legends). Mobile games have been a prime spot for advertising and we believe it will continue to be so in 2023. 

- Ari Brandt, VP Business Development and Global Marketplace, ironSource (merged with Unity)
- Louie Tejada, Head of Channel Partnerships, Unity Technologies

Appodeal: As for advertising networks, the most interesting point is that the number of digits in postbacks has been increased from two to four. This may enable more detailed reports about the install sources for User Acquisition (UA).

Although SKAD is getting harder to understand, its 4.0 version gives UA many interesting opportunities. Now you can choose between getting more UA data with a larger delay reception, or getting less data but much faster. Also, features such as adding extra postbacks, or the possibility to set lockWindow, enable advertisers to get the most optimal purchasing strategy.

Coarse-grain conversion values will facilitate quick decisions based on fewer installs, which is especially beneficial for advertisers with small budgets.

 - Tanya Moroz, VP of Customer Success, Appodeal (Stack)

Chartboost: To ensure everyone is being set up for success, adopting the upcoming industry standard for request and response as part of SKAN 4.0 is the most important action anyone could take.  Without this, there is a risk of:

• Strained resources adjusting to the individualized implementation of SKAN 4.0
• Inventory becoming even more fragmented
• Issues reconciling reporting and attribution
• Integrations becoming more complicated
• Limited opportunities for scale
• Increased number of errors

 - Nikhil Mishra, SVP of Product, Chartboost

Digital Turbine: Apple's continued investment and improvement in SKAN indicates both that they’re listening to UA marketers’ feedback and that their crackdown on probabilistic attribution will eventually come. SKAN 4.0's campaign ID management is a massive step forward for ad exchanges and ad networks and should give some level of the granular targeting that previous SKAN versions were missing. Time will tell if marketers are satisfied with SKAN 4.0 allowing 3 postbacks per user to help measure LTV, but it's likely probabilistic will only be a thing on Android by the end of 2024.

 - Ben Holmes, VP of Performance Revenue, Digital Turbine

InMobi: SKAN 4.0 is a significant evolution that unlocks more capabilities for marketers, helping them measure their effectiveness at a more granular level while continuing to be privacy-safe. Marketers will be able to identify high-value inventory and inventory sources much better than in the previous iterations of SKAN. As such, it will be a good thing for both marketers and the ad tech ecosystem.

The best thing ad exchanges can do is to upgrade their SDKs to support the latest specs as soon as possible and work with the publishers so that publishers upgrade to the newest SDK. Ad exchanges should also look at evangelizing the significance of this latest spec to drive adoption more rapidly.

- Pamela Ibarra, VP - Partnerships and Revenue, InMobi Exchange

IronSource & Unity: Taking advantage of the addition of privacy thresholds. Privacy is top of mind for many consumers and the mobile marketplace is reacting to this. In previous versions of SKAN there was one option and if privacy was deemed inadequate Apple would drop the conversion value and/or source app ID from the postback and both would be nulled. 

With multiple thresholds, depending on Apple’s crowd anonymity tier they may not provide one or more of the following fields based on the tier: fine grain conversion value, coarse-grain conversion value, source ID, or source app ID. In this situation, as opposed to getting no information, advertisers can get some information, while being privacy cognizant.

- Ari Brandt, VP Business Development and Global Marketplace, ironSource (merged with Unity)
- Louie Tejada, Head of Channel Partnerships, Unity Technologies

Appodeal: User privacy will continue to be a major trend in UA. In addition to adapting to the new version of SKAD on iOS, advertisers will have to start preparing for similar changes on Android.

 - Tanya Moroz, VP of Customer Success, Appodeal (Stack)

Chartboost: There are four mobile marketing trends for 2023 that are top of mind for us:

• With the decrease in in-app purchases driven by the economic downturn, we are focused on continuing to invest in our in-app advertising solution, as marketers will likely shift their efforts in this direction to compensate.
• As a solution that serves three key pieces of the ad tech ecosystem - advertisers, publishers, and partner DSPs - there are a lot of different users with different goals and responsibilities entering our platform.  We are working to create a streamlined, flexible, and robust platform that will allow all users to easily accomplish what they need to with minimal fuss or confusion.
• As the industry continues to expand and use cases continue to evolve, our goal is to build a platform with the flexibility to solve any use case advertisers can throw at them; with this in mind, we are investing heavily in supporting new ad formats, campaign goal types, etc. to meet the ever-evolving needs of customers.
• A stellar customer experience is paramount to our customers as a tool to acquire, retain and potentially cross-sell their users.  Recognizing this, we continue to invest in additional tools and controls for configuration and testing, as well as infrastructure improvements that will allow for the best possible experience for customers’ users.

 - Nikhil Mishra, SVP of Product, Chartboost

Digital Turbine: With integrations now complete in Ad Tech from the M&A boom of 2020-2022, and as regulatory bodies continue to come down hard on big tech, 2023 will be the time when we see the gap between the walled gardens and everyone else shrink. Unprecedented access to Google's marketing ecosystem will be made available over the next 12 months, but only the largest ad players will gain access. As that access to Google expands for those players, the smaller companies are going to have an increasingly harder time getting their footing in the ecosystem.

 - Ben Holmes, VP of Performance Revenue, Digital Turbine

InMobi:

1. Alternative targeting approaches: With the device IDs and signals going away, advertisers will start getting used to the new normal for targeting. There are different alternatives being proposed by the ecosystem, but there won’t be a one-size-fits-all solution. So multiple solutions like alternative IDs, cohorts, seller-defined audiences (SDAs) etc will make strides in making themselves more viable and user-friendly for advertisers. 
2. Better ads experience: App publishers are increasingly more sensitive about user retention and are pushing to integrate more intrinsic or non-disruptive ad experiences in their apps. And advertisers are similarly waking up to how mobile ad formats can facilitate better brand-user interaction. Formats like in-game display ads and audio ads will see more adoption.

- Pamela Ibarra, VP - Partnerships and Revenue, InMobi Exchange

IronSource & Unity: In 2023, we believe apps will continue following in the footsteps of their gaming counterparts. We expect an uptake in value-exchange advertising given growing consumer interest in ad-supported payments. Rewarded ad units like offerwalls and rewarded video pose a great opportunity for all app genres.

On-device advertising is becoming a staple of UA strategy for many mobile apps, since the onboarding experience on a new device provides a unique opportunity for visibility. Apps will continue to expand their use of this channel, especially given the need to keep CPIs low and the incrementality that on-device advertising offers. 

We continue to see the increased popularity of the short-form video format. This change in how people consume media will push ad creatives to be shorter, catchier, and more humorous, and it will demand highly skilled creative teams and cutting-edge optimization and analytical tools to make this content format successful. 

- Ari Brandt, VP Business Development and Global Marketplace, ironSource (merged with Unity)
- Louie Tejada, Head of Channel Partnerships, Unity Technologies

Chartboost: This recent trend has created more value for both publishers and advertisers. The common thread behind many recent acquisitions has been the move toward vertical consolidation. This drives greater scale and economic efficiency throughout the supply chain, resulting in more control over user acquisition, monetization, and retention strategies and, ultimately, more revenue for publishers and advertisers alike.

 - Nikhil Mishra, SVP of Product, Chartboost

Digital Turbine: Ad Tech still ain't dead! We've seen a minor slowdown over the last six months as VC money has stayed on the sidelines, but that’s part of a general trend in tech and the markets. Once the money is redeployed at the end of 2023, I’m expecting we’ll see a flurry of activity. Leaner and more efficient business models forced upon companies during these harder times will become an opportunity for them as it will make their revenue profiles even more enticing for strategic M&A in the future.

 - Ben Holmes, VP of Performance Revenue, Digital Turbine

InMobi: In this challenging economy, mergers and acquisitions will happen, and we will continue to support what is best for the publishers and the advertisers to meet their goals.

- Pamela Ibarra, VP - Partnerships and Revenue, InMobi Exchange

IronSource & Unity: M&As in the ad industry are exciting and are a tell-tale sign of the interconnectivity of the advertising technology world. We recently completed our merger with ironSource and are incredibly excited about how their team and their complementary capabilities will help us simplify the launch and growth of mobile games for developers. 

- Ari Brandt, VP Business Development and Global Marketplace, ironSource (merged with Unity)
- Louie Tejada, Head of Channel Partnerships, Unity Technologies

Bottom Line

Mobile advertising is a fast-paced industry and all its players have become resilient to earth-shaking developments. We have had to become creative in our approach to maintain relevance. Due to the creative approach, we have developed a powerful skill - the ability to explore different options while adapting to ups and downs.

Don’t miss the last part of our trilogy which will be dropped in January and feature the top advertisers' forecasts for 2023. Stay tuned.