Apple’s iOS 14.5 Boosted A Key Android App Profitability Factor By 2.5X - Forbes

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Advertising spend on iPhone and iPad has dropped 32% from its peak in 2021. While in early February advertisers split their spend 56% to 44% in favor of Android, in mid-June the split was 70% to 30%.

And as a result, Android apps are getting more profitable.

Apple’s recent iOS 14.5 update essentially deprecated the IDFA, Apple’s identifier for advertisers, by making it opt-in by consumers. That makes mobile advertising safer and more private, but it also makes it harder to measure and value. Based on a $1.5 billion slice of adspend that I studied last week for marketing measurement firm Singular, advertisers began shifting dollars to Android — which is still fully measurable — at just about the same time as Apple released iOS 14.5: the week of April 26. (Full disclosure: Singular is a consulting client.)

Ad spend on iPhone and iPad has been dropping in favor of Android since Apple released iOS 14.5.

Singular

As a direct result of the flood of additional marketing dollars, Android ad rates have caught up and eclipsed iOS ad prices for the first time ever, says AdLibertas. And that in turn has boosted monetization for Android apps significantly: 90-day predictive value of new users for Android apps are up 2.5X in June over April’s numbers, according to AdLibertas’ founder and CEO Adam Landis.

Meanwhile, 90-day predictive value of iOS users has dropped about 50%.

June cohorts of Android app users are worth up to 2.5X more than April cohorts, says AdLibertas.

AdLibertas

It’s hard to over-estimate how big a deal this is, even if it’s temporary.

One of the most basic assumptions in mobile over the past decade is that marketing on iOS is more expensive because iPhone and iPad users and customers are worth more than Android users. At least at this moment in history, that’s no longer true.

There are some caveats to mention here.

It’s likely there was a run-up in iOS marketing before the launch of iOS 14.5. App developers and marketers knew the “free IDFA party” was ending soon, and likely spent more freely in early 2021 than they would have otherwise. And, as marketers adjust their growth technologies to account for new ways of measuring and valuing mobile users that take advantage of Apple’s SKAdNetwork framework and other tools, the pendulum is likely to swing back in iOS’ favor.

It’s simple math: the average iPhone buyer spends easily $400 more for a device than the average Android owner.

Ergo: they’re wealthier and more valuable to advertisers.

If, however, this signals a sea change in marketing costs and profitability per platform — even if the balance swings back somewhat to iOS — that could have long-term impacts on developer investments on Android and iOS. In other words: if you can make more money on Android than on iOS, you’re more likely to release apps on Android. Even a small shift that just boosts Android profitability by 20% or so will have some bearing on where app developers and publishers invest.

And over time, a platform is only as good as the apps it supports.

This shift will likely stabilize and somewhat reverse itself. But it’s a warning flag to Apple that the developers it says it supports — 76% of whom depend on ad revenue — are at least at the moment earning significantly more on Android.

And opt-in rates to IDFA?

Globally, they’re tracking at only 23.64%. Since for effective measurement marketers need dual opt-in (advertised app and advertising app), that essentially means that full trackability a la 2010 to 2020 is only available for a vanishingly small percentage of their mobile users.

IDFA opt-in rates for top countries globally in iOS 14.5

Singular

With iOS 14.5 global update rates at about 52% and climbing rapidly, iOS developers could be in for significantly more pain over the coming weeks and months. Ultimately, iOS monetization will likely return, with some degree of impairment, however.

The Link Lonk


June 25, 2021 at 10:22PM
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Apple’s iOS 14.5 Boosted A Key Android App Profitability Factor By 2.5X - Forbes

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