Considering it didn’t bring much additional control to mobile users, Apple’s App Tracking Transparency (ATT) feature gave a surprisingly big boost to in-app advertising. With data sharing choices already available for those willing to wade through device settings, all ATT did was make opting out simple. As recent studies show, however, this small shift towards easier privacy management led to big changes, with only 25% of users deciding to allow in-app monitoring.
Naturally, the 75% opt-out rate this leaves is concerning for advertisers who rely on user-level data to drive relevant and impactful experiences. But there are plenty of opportunities for meaningful reach and engagement. Not only has app usage worldwide reached record levels over the past year – reaching 230 million downloads and an average daily duration of almost five hours – but users are also open to in-app advertisements. In fact, our own research found that audiences are three times more likely to accept ads in exchange for free content than to pay for apps.
Far from limiting advertising potential, stricter protections could help improve customer relations, if advertisers do their part of the deal. In addition to exploring different sources of data, there is a need to focus more on identifying and delivering what users want.
Deliver better value to data
Consumers’ willingness to accept ads is a positive sign that the value exchange is still alive and well. With our research highlighting that around 7% of users in the UK, US, Germany and Japan would prefer to pay for ad-free apps, this is an encouraging high receptivity and a opportunity for advertisers to leverage the benefits that advertisements provide to ensure broad accessibility. .
At the same time, however, sensitivity to privacy is increasing. As recognition of tracking in the app increases, so does the scrutiny of its effectiveness for the public. Almost six in ten UK users (58%) view the application of in-app tracking to power ads as unfair, followed by 50% in the US and 48% in Germany. This finding underscores that while audiences aren’t necessarily ad-averse to ads, they also don’t feel that advertisers’ efforts to reach them via mobile devices currently offer good compensation in exchange for their personal data.
It is difficult to determine how to meet these expectations. With regulations and restrictions stripping away more and more layers of information, it becomes increasingly difficult to apply the standard approach of improving ad resonance – and justifying the use of data – through a refined customization. To strengthen relationships, advertisers need to focus on delivering experiences that match audience preferences and making better use of innovations in privacy-driven targeting.
Getting back to the basics of creation
The fundamentals of good mobile advertising should never be underestimated. Amid the massive shift to default user-based targeting, the industry has often overlooked the value of tailoring ads to its environment and seeking direct user input. Our past surveys, for example, have found that outside of the relatively obvious basics, such as truly engaging messages, mobile users tend to be hooked by ads related to their context.
Specifically, 20% of users were more likely to pay attention to ads using interactive elements. Given the nature of mobile usage, this makes sense: users who have actively chosen to launch specific apps will be more likely to use ads designed to feel like part of the experience. It could also explain why larger studies have concluded that interactive ads are among the most effective mobile formats, second only to the equally immersive playable ads.
While it’s not the only key ingredient for successful integrated campaigns, satisfying the appetite for active participation is a solid starting point for rebuilding trust and increasing ad value. From this base, advertisers can focus on giving ads a personal touch using smarter methods of leveraging available data and the latest generation of probabilistic tools.
Get smart assistance
From now on, ensuring maximum ad relevance will be about making effective use of accessible data. On the publisher side, ATT hasn’t cut out app information entirely. Apple’s SKAdNetwork always shares “post-backs” containing campaign ID and conversion value details within the first 24 hours of a download. This means that publishers can tie particular acquisition campaigns to revenue generated within apps, initial retention rates, and expected lifetime value (LTV).
Combined with advanced modeling, this information can enable not only relatively accurate attribution, but also optimization. For example, artificial intelligence (AI) models can analyze huge volumes of past and incoming data to trace the links between specific campaigns and desired results. Powered by systems driven by AI subsets such as reinforced learning (RL), this information can then be used by sophisticated algorithms to define which types of ads are likely to trigger actions associated with strong conversion and satisfaction in some applications. game value or estimated LTV – and serve messages accordingly.
Covering anonymized in-app events, ad network reporting, and deterministic information about registered users, the data sets available to advertisers are much more limited. It is, however, possible to develop and activate this data with AI modeling. For example, capturing known traits and consenting user engagement, along with anonymized data, can provide insight into the tastes and habits of unique app audiences. In addition to informing targeted advertisements, this data may be entered into RL systems to enable a similar type of automated decision-making; with advertisements chosen for their likelihood of eliciting desired responses and giving users what they want.
The impact of ATT will undoubtedly cast a long shadow over in-app ads, but there is no need to shut down in-app ads. By expanding their information horizons and looking beyond user-based data alone, advertisers can find creative new ways to win back user trust and ensure that ads deliver better value. To unlock the positive possibilities of stronger privacy provisions, they will need to pay more attention to what users themselves think ads should provide and strive to make the most of the data they have with advanced modeling technology.