Bad news for mobile advertisers…or is it?
Apple has been coming down on advertisers recently. Earlier this month, the company announced that users will be able to block ads in Safari on iOS 9. These changes are sure to affect mobile advertising, but will make for a better user experience.
When iOS 9 rolls out this fall, third-party developers also won’t be able to see data generated by other apps on a user’s device. Ad networks currently use this data to show targeted advertisements to mobile users.
For example, say a user has a bunch of puzzle games on their iPhone. With targeted advertising, this user is more likely to be served with ads for similar games on their device.
That won’t be possible in iOS 9.
What does this change mean for developers? And how will it impact mobile advertising campaigns?
Here’s what you need to know…
How ad networks retrieve data
Have you ever wondered how ads appear on your mobile device? Or why you see a particular ad over and over? The answer is (put simply), advertisers collect data about your mobile activity and match your behavior with ads.
Facebook’s Audience Network implements banners, interstitial ads, and native ads on mobile devices. Twitter and Google use the same strategies with MoPub and AdMob.
These ad networks use a variety of ad targeting methods to figure out which ads to show to users. And they do it by collecting data about what you’re doing on your mobile device. Useful information includes device type, model, screen size, location, and data generated by other apps.
There are countless other examples. But the bottom line is, when ads get to the right people at the right time, the Click-Through-Rate (CTR) goes through the roof! In return, developers can earn more money from ads published in their apps.
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What’s changing in iOS 9
Currently, ad networks can gather data through a communication API in iOS called “canopenURL.” The purpose of the API is to make it easier for apps to communicate with one another. But ad networks frequently use it to see which apps a user has downloaded.
Now, in an effort to appear more privacy-friendly,
[tweet_box design=”default”]Apple has decided to prevent mobile advertisers from accessing information from downloaded apps on your device. [/tweet_box]
Your collection of apps can reveal a lot about your interests and preferences, just like your browsing history.
Apple now believes that it should be kept private.
What this means for developers
Yes, not having the ability to see the other apps that are installed on a device will set ad networks back a bit. But in reality, that is just one fragment of information ad networks use to target their ads.
Ad networks collect other information to make advertisements more relevant. For example, audience targeting uses historical data to match users to ads. Geo-targeting displays ads based on user location. Contextual targeting matches ads with user behavior.
Developers will not see a change in their ad revenue from networks such as Chartboost and Applovin. Targeting similar apps on a device is just one piece of the puzzle.
But this change does show us that it’s always a good idea to diversify your app portfolio and app monetization strategy. Buying Facebook app installs is one thing that you should certainly consider adding to your arsenal.
Exploring different lead gen opportunities such as email marketing is another strategy for boosting app exposure.
Developers shouldn’t be too worried however, because this one change shouldn’t have a big effect on their revenue. There is a lot of money at stake in ads, and Apple knows they are crucial to the expanding app market.
Nobody knows the exact effect that iOS 9 will have on ad revenue until it comes out. But from where we are standing, it should be business as usual. We’ll be sure to keep you updated on the latest changes.
Have a question about ad networks? Leave a comment!
So, does this mean ad companies such as Chartboost, AppLovin, etc., will soon be out of business? Doubtful. This article should have had some input from ad network firms.
Great post, and thanks for the heads up on this upcoming change… When the app marketplace zigs, we need to zag! This is actually a great reason to step back and look at the bigger picture in terms of potential app monetization channels. Carter has highlighted several of these on previous blog posts, and now is a good time to take a serious look… especially the affiliate marketing and lead gen opportunities with apps.
To address Geek Mountain’s point above. I don’t believe this will affect either Chartboost or Applovin. The Chartboost ad system is pretty mundane and doesn’t really have any “learning” capabilities. Most of the targeting that can be done on Chartboost is through various campaign setups and filtering, both of which is done manually by the user. Applovin’s system is a little bit smarter but I believe their algorithm works by analyzing impressions in an app by the thousands and then prioritizing ads of better converting games and genres within that app.
@Geek Mountain + Phillip – Yeah that’s the long and short of it. Early on (2012-2014) the ad networks hedged the markets by collecting that type of info as a powerful proxy. Knowing what other apps were installed on the phone allowed them to serve ads much better. But, now that they have those databases built, they have adjusted their algorithms accordingly. While it may impact the initial eCPMs, it certainly is not a long term effect.