Originally published on Verve.com
Apple’s iOS 14 update brings with it much uncertainty within the mobile advertising ecosystem. The shift towards more privacy-centered advertising has been coming for a while now however, and the industry has been gearing up for the impact of a post-IDFA era. As part of Verve Group, we’ve been helping industry players prepare for this new wave with publisher guides, insightful resources and support for our partners. This time we have created an IDFA Impact Assessment Calculator below for publishers and advertisers with their own apps, to insert their KPIs and control values to estimate how much ad revenues will be affected by the iOS 14 update. The calculator considers the percentage of Facebook revenue, the amount of IDFA opt-in rates as well as the number of Apple’s Limit Ad Tracking (LAT) users.
How Will iOS 14 Initially Impact Ad Revenues?
From our example estimation, it is expected that app publishers will see iOS 14 ad revenues decrease by 40% within the first month of the launch for users that update to that version. With previous iOS updates, such as iOS 12, 60% of devices updated within the first month and 81% of all devices currently use iOS 13. This means that for the users still on older iOS versions, those ad revenues will mostly be unaffected with the iOS 14 update and may even increase. The impact assessment calculator only takes into account iOS revenues, so Android revenues should remain more or less unaffected by the changes.
Users Who Opt-In to Apple’s IDFA
Verve Group’s recent user journey article detailed how publishers can increase opt-in rates by optimizing the flow to collect user’s IDFA, including making the value exchange clear to the user. We highlighted why both messaging and timing are important factors to consider when delivering the app’s soft consent pop-up as well as the Apple opt-in pop-up. We believe that those who do opt-in for IDFA however will become more valuable and committed users. This is also considered in the Impact Assessment Calculator.
Facebook’s iOS 14 Concerns for Audience Network
Last week Facebook announced that its apps on iOS 14 will not collect IDFA and that its Audience Network could expect to see a drop of 50% in publisher ad revenue. Facebook’s Audience Network (FAN) is a suite of approved websites and mobile apps in which personalized ads are shown. From its initial testing, Facebook saw a major revenue drop when personalization was removed from ad install campaigns and insists that Apple’s update will “hurt many of our developers and publishers at an already difficult time for businesses.”
eCPM Decrease and Limit Ad Tracking Users
Today, Apple’s Limit Ad Tracking already sees over 30% of users in the US with the enabled iOS privacy setting, which allows users to opt-out of IDFA tracking. This is before the iOS 14 update is even released, so a decrease in the average eCPM can be expected as the new update is automatically opted out of IDFA. This is also reflected in the Impact Assessment Calculator.
Looking Ahead: The Industry Will Bounce Back
Although there can be initial revenue fluctuations expected with the iOS 14 update, we believe that the mobile advertising market will stabilize and pick up once again after a few months. The Impact Assessment Calculator which we have created predicts the average loss in iOS ad revenues for the first month only. We believe that eCPM rates will increase in the months following as the industry adapts and new, more privacy-centered solutions are introduced as alternatives to targeting identity only.
If you have any questions or concerns about the upcoming iOS 14 update, contact us below or reach out to your Client Success Manager directly.