iOS 14.5 - measuring the impact through data

iOS 14.5 was released to the market one month ago, and the impact it’s having on mobile app developers, marketers, and the industry as a whole is becoming clearer. From the moment the update went live, we’ve been analyzing our data to get a better picture of the changes and movements happening so we can provide clarity for mobile marketers. Because the ramifications of iOS 14.5 are much broader than attribution, we’ve been working with AppLovin to dig into and determine how the updates are also impacting ad targeting and ad revenue.

Below, we take a look at some of the most discussed topics including consent rate opt-ins, SKAdNetwork (SKAN) and ad revenue impact - diving into data from AppLovin’s owned studios to provide a real-life snapshot of what has changed.

Consent rates

From iOS 14.5 onwards, App Tracking Transparency (ATT) requires apps are required to ask for consent from the end-user (the person using the device) in order to track them across websites and apps in order to serve them targeted ads. Since the rollout a month ago, some articles have suggested that global consent rates from users could be as low as 5%. The reality of what we’re seeing from AppLovin owned studio apps, however, appears to be much more optimistic.

The consent rates vary widely, but the results are encouraging with all average rates well above the initial predictions. Our theory regarding the broad range represented is that early reports were taking overall numbers (from apps that asked for consent as well as those that didn’t ask for consent because they haven’t added the flow or don’t plan to) instead of only focusing on apps that explicitly request consent.

Our key findings:

1. Apps with high install rates from advertisements have materially higher consent rates.

Consumers are finding these games through ads and are inherently more interested in seeing relevant advertisements because they’re used to finding content they’re interested in this way. For example, in the data presented above, Animal Transform and Save the Girl! are hyper casual games that are discovered by consumers via advertising. A large portion of their users will have found the games via ads and will therefore be likely to find other games/apps of interest through ads displayed within these games. Consent rates are already reaching 70% and higher.

The key to achieving this high level of consent is to clearly and simply explain the value of consenting and sharing data in order to get relevant ads. Because the user is part of an audience that has benefited from being served relevant ads in the past, they’re likely to understand the value of continuing to receive them. Transparency drives trust and helps users make informed decisions.

2. Consent rates will continue to increase over time

Contrary to popular opinion, we're seeing overall consent rates trend upwards as iOS 14.5+ adoption rates grow. Currently, the iOS 14.5 adoption is below 15%. However, as the adoption rate rises and more apps start asking for consent, we think users will become increasingly educated on the value of relevant advertising, and opt-in rates are increasing.

SKAdNetwork

When Apple announced their SKAdNetwork 2.0 in June 2020 in preparation for the release of iOS 14, the industry reacted by claiming that Apple’s attribution solution wasn’t accurate and wouldn’t see enough adoption among publishers. The extra time between the initial announcement of iOS 14 and the actual release of iOS 14.5 allowed the ecosystem to prepare and build models and solutions that would accommodate these changes.

Since the release of iOS 14.5, we’ve been conducting tests on SKAdNetwork for downloads and redownloads. We’ve been able to determine that the accuracy is a near-perfect match with traditional attribution. The vast majority of inventory on iOS also now supports SKAdNetwork, and we’re able to accurately report these conversions. Apple did a great job of creating a solution that works. As the technology develops, we will continue to improve functionality and we look forward to seeing what features Apple will add to the SKAdNetwork.

Ad revenue impact

Reports published after the initial announcement of iOS 14 indicated that the majority of the industry expected a 50% decay to ad revenues. Now that iOS 14.5 has arrived, we wanted to verify the real impact on ad revenue with tangible, data-based results. Working with AppLovin’s leading mediation platform, MAX, to gain insight into the impact, we found that of the remaining iOS users who are not consenting, the data shows us a ~30% drop in CPM. However, we can see that this is being completely offset as a result of the opted-in iOS and Android users yielding higher CPMs. This generates more ad revenue for publishers and subsequently makes up for the loss in ad revenue from the opt-out group.

Overall, the impact on ad revenue appears to be minor if not nonexistent.

Our initial findings are strong indicators that our industry will continue to maintain its rapid growth and that the ad ecosystem will continue to flourish.

The world we live in has changed over the past 18 months, and while iOS 14 has had a significant impact on the way developers and marketers approach mobile advertising, the results in terms of consent rate opt-ins, SKAdNetwork accuracy and adoption, and ad revenue impact show that the reality for the industry is far more optimistic than initial predictions indicated. The reality we’re seeing is that the market, consumers, and platform are adapting.

To keep up to date on our latest insights, analyses and product releases related to iOS 14, take a look at our latest iOS and SKAN Solutions.