Inside mobile games’ struggle to navigate Apple’s privacy policies

For mobile game apps and game advertisers, the appearance of Apple’s new privacy policies in the spring of 2021 caused a problem. Now, a year down the line, players in the industry are still shooting all cylinders to determine how to attract user acceptance and maintain revenue.

When Apple introduced AppTrackingTransparency (ATT) with iOS 14.5 just over a year ago, publishers and advertisers panicked. The privacy feature lets users choose if they want specific apps to be able to track their activity across other apps and websites — essentially, it’s designed to prevent app makers from tracking users’ online behavior and selling that information to advertisers. When a user chooses to opt out of tracking, Apple’s user-level identifier, Identifier for Advertisers (IDFA), is blocked at the app level.

Of course, blocking IDFA through ATT does not prevent advertisers from tracking a user via other means, but due to the exhaustion of third-party cookies, it certainly creates new obstacles for mobile advertisers. At the time of its launch, Facebook and other major publishers rallied against the policy (with Facebook launching a campaign telling users that the data it collects on users helps keep its platforms free).

And while ATT’s subscription rates aren’t as low as originally expected—data from mobile marketing company Adjust puts the overall subscription rate at around 26%, although some experts’ original estimates were as low as 5%— Mobile apps and advertisers are still losing large swaths of user data that they previously had access to.

While all mobile apps bear the brunt of the ATT, gaming apps are particularly affected, considering that mobile is now the largest gaming channel, with mobile gaming consumer spending now accounting for 52% of all gaming spending on mobile devices. world level.

Game over for mobile game ad?

For game applications and mobile game advertisers, revenue streams enabled through data sharing and targeted advertising are essential components of business success. ATT has thrown a master wrench into the works. “Since the introduction of…ATT, mobile developers have had to invest resources for development in modeling an ambiguous situation,” explained a spokesperson for one of the major mobile game companies, who agreed to speak to The Drum on the condition of anonymity. “Many developers now don’t know how to buy on iOS or work with overly complex SKAdNetwork [Apple’s privacy-centric ad measurement API]. “

In response, some developers and advertisers have fled Apple. In fact, according to a new report by AppsFlyer, 10% of gaming app budgets shifted from iOS to Android after the introduction of ATT. However, for the anonymous gaming company involved, it can feel like a lost case. They explain: “On Android, competition and advertising prices have increased, which has made a situation almost unprofitable.”

Many advertisers will remain on iOS. But the long-term impact of the Arms Trade Treaty is only now becoming apparent, according to the spokesperson. “The pandemic and the great interest in gaming during the lockdown made it possible to get through that period relatively painlessly.” They’re right — Adjust data shows mobile game app revenue soared during Covid and eight major mobile games had their best year so far in 2021, each bringing in more than $1 billion. Mobile game ad spending and ad revenue also rose. But now, with gaming activity linked to the pandemic waning, gaming apps are facing an even more challenging reality. “It was only in 2022 that the market began to feel the actual impact of the Arms Trade Treaty,” a company spokesperson says.

With tracking — and thus targeting — hampered by ATT, the speaker expects that ad dollars that previously went to mobile gaming will be redistributed across channels. Advertising platforms that have been using SKAdNetwork for some time – such as Google, Meta, TikTok and Snap – will be a huge advantage. Small publishers including most game apps will be left to compete for the crumbs.

Push “play” to innovate

While some are pessimistic, the latest data from Adjust indicates that mobile gaming has fared significantly better than other verticals when it comes to user subscription: while ATT’s subscription rate across the industry hovers around 26%, gaming apps are at 31%. As of the first quarter of 2022. Within certain subcategories of games, many numbers are even higher: Unofficial and hyper action game apps account for 39%, while racing apps account for up to 40%.

This means that there are still plenty of opportunities for game apps and mobile game advertisers to make one-on-one contacts with users. “These high approval rates give marketers a lot of data to work with when building their conversion value strategies,” says Simon Dusart, CEO of Adjust.

However, he admits, innovation is not ‘fun’ but a requirement at this point if apps are to maintain and build their own user bases (and thus ad revenue). “While user acquisition has always been a mainstay in mobile marketing, the change driven by user privacy means that old ways of doing things need to be completely rethought, and maintaining flexibility and flexibility is more essential than ever. We can only rely on automation to turn the percentage points in our favour.”

Dossart suggests that the best solution is for game app developers to focus on acquiring ATT choices and then testing new strategies to drive conversion values. “The key is to identify events that occur within the first 24 hours after-[app] Installs that either represent the major events that follow or indicate future events outside this window. This could also be a series of events.” For example, he says, “Does a user who completes three tutorials in the first 24 hours almost always end up converting a subscription?” He says setting up these forms is a relatively simple task, and allows developers to evaluate a combination One of the factors to help improve results for advertisers.

In addition to working within the constraints of ATT and similar restrictive privacy frameworks, an approach that is gaining significant traction is the introduction of new frameworks for exchanging values ​​that enable applications to create their own stores of first-party data. If gaming apps can’t simply scrape user data for free by following users online, they can motivate them to dump their information in exchange for some perk or benefit. Matthew Roach, co-founder and CEO of ID5, a privacy-focused ID5 solutions company, explains: “One of the major trends we’ve seen in games is apps trying to get more data in exchange for free services or features.” Applications that rely on advertising revenue to ask users for more information about themselves so they can configure a profile and enable advertising partners to reach them across different devices.

And while this strategy can ensure that apps contain valuable, high-quality user data, it can still alienate users and shrink an app’s user base. In an effort to remedy this problem, the apps – in a similar move to many other media publishers – are moving away from free, ad-supported models and moving towards paid subscription models.

Ultimately, Roche argues, this hurts gaming apps, advertisers, and consumers as well. “As a result of Apple’s policies, in particular ATT, which prevent apps from accessing the device ID they need to properly monetize their ads, many game developers cannot continue their operations with ads and have to move to pay-per-play models — or shut down permanently. Ultimately, this will also have a negative impact on consumers who cannot enjoy content and services for free anymore.”

Ultimately, the dilemma facing many gaming applications will boil down to the question of whether to innovate around ATT and other constraints to continue to support their advertising business — or switch to pay-per-play models. Roche believes the solution lies in the former. “Privacy can be balanced with access to free content and services,” he says. “Both app developers and publishers should pursue solutions that enable them to monetize their businesses through advertising while adhering to data privacy regulations and supporting its use.” “It would be incredibly undemocratic to move to a world where consumers have to pay for all the services the internet offers to avoid dealing with privacy requirements,” he adds.

It is suggested that by using a new type of identifier, developers can maintain their advertising work and continue offering free tiers to users. Of course, he has a personal stake in the matter, as his company sells its own identity solution. Other experts support contextual targeting or argue that first-party data models are the only truly privacy-safe way to achieve individual targeting in the new model.

If one thing is clear, it’s that the future of mobile gaming advertising is at a critical juncture — it’s shifting away from exploitative tracking and toward privacy-centric patterns of communication with consumers. Although much remains unclear, Dusart, for his part, remains confident in the industry’s capabilities. “We, and everyone in the mobile advertising industry, have to be flexible, put user privacy first and provide customers with solutions that work – just as we did with iOS 14 and all the changes that came before that.”

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