A new GamesBeat event is just around the corner! Learn more about what comes next.
Much like Google’s ongoing plans for the cookie demise, Apple has thrown a similar wrench into the world of app monetization. With iOS 14.5 and the addition of the App Tracking Transparency framework, app and game developers who previously relied on the App Store to access user credentials are… worried.
This isn’t much different from cookies for websites, where technology has allowed publishers to go lazy to collect user data. Developers who have worked hard to collect user data will have a lot less work to do to continue to monetize their games. With so many questions looming over the future of developers as a result of Apple’s recent changes, let’s break down what’s going on.
A wake-up call
For apps that generate revenue through an initial install or subscription, this change from Apple won’t have a major impact. These developers already have access to the data they need and do not rely on the remarketing of additional services like coins, avatars, etc., down the funnel. But for developers who rely on the App Store to collect user data for retargeting, Apple’s recent updates present a major challenge.
How do you sell the long tail when your tail is cut? The short answer is no. For many apps, 60-70% of in-app purchases came from the App Store.
Three great investment professionals explain what it takes to finance your video game.
Watch on demand
So what does this mean for other space players?
Apple has certainly caused disruptions with this movement. Even Facebook is doing it. I’m not sure if Google will take similar action, but for now ad dollars are expected to be pulling out of Apple’s App Store out of necessity. According to an AppsFlyer analysis of $ 7.5 billion in CPU spending since April, iOS budgets have fallen 15% from the days of application of Application Tracking Transparency (ATT) before the application, while Android expenses remain unchanged. As ad traffic increases on Google Play, bids will rise and costs will fall, potentially creating the perfect storm for Google Play to become dominant in the short term.
Do consumers care?
Do consumers really hate being targeted by the apps they already use? According to the same AppsFlyer study, ATT membership rates are much higher than initially expected, reaching 45% overall. With information overload now a part of our daily lives, we need this data to reach us, so we don’t have to search for it. I love it when Netflix tells me there are new episodes of the show I was watching six months ago. Does this violate my privacy? Maybe, but it’s definitely a good way to use my own habits to benefit me.
It really depends on the quality of the content. If it’s a game you really like, you’re more than willing to give up your privacy. All the more reason why developers should get into the habit of collecting user data (with consent of course).
A lesson for all
Based on conversations with various app developers, the adoption of iOS 14.5 is estimated at 15% – and it’s still early days for developers to address some of the challenges this change will bring. While Apple focuses heavily on design and user experience, Google is more data-driven – an approach that works well for marketers looking to generate a positive ROI.
And, for publishers, always collect user data. If you rely on a third party for targeting and don’t collect your own first party data, you are sacrificing your power and jeopardizing your revenue stream.
Now is the time to rethink how to collect and monetize user data. Think of this as a reset to identify yourself and familiarize yourself with the users. Those who understand this as early as possible will be on the verge of seeing more changes to come.
Ram Rao is Managing Director of Mobile Applications at Fluent, Inc., where he is leading the effort to scale its portfolio of rewards-driven applications..
GamesBeat’s credo when covering the gaming industry is “where passion meets business”. What does it mean? We want to tell you how much news matters to you, not only as a decision maker in a game studio, but also as a game fan. Whether you read our articles, listen to our podcasts, or watch our videos, GamesBeat will help you learn more about the industry and enjoy participating in it.
How will you do this? Membership includes access to:
- Newsletters, such as DeanBeat
- The wonderful, educational and fun speakers at our events
- Networking opportunities
- Special member-only interviews, discussions and open office events with GamesBeat staff
- Chat with community members, GamesBeat staff, and other guests on our Discord
- And maybe even a fun prize or two
- Presentations to like-minded parties
Become a member