Apple’s privacy updates are no joke and e-commerce companies are paying for them. The price of cost-per-acquisition (CPA) advertising in e-commerce marketing has risen by 200% for tracked users and by 155% for non-tracked users since iOS 14.5, a study by ad-tech startup MOLOCO covering billions of ad bids reveals.
The data was collected between January 2020 and June 2021 via the MOLOCO Cloud automated mobile ad-buying platform. MOLOCO gathered data from 30 different cost-per-action (CPA) campaigns run by mobile e-commerce apps throughout 2021. The study examined the performance of two types of CPA campaigns — those that relied on user-specific data (Non-Limited Ad Tracking or Non-LAT) and those that didn’t (Limited Ad Tracking or LAT) — across three different releases: pre-14.5, 14.5, and 14.6. Read on for key study findings that can fuel your strategy:
- Tracked no more. In April, Apple began showing a pop-up window on iPhones that asked people to consent to be tracked by apps — a feature called App Tracking Transparency (ATT). With many users opting out, the portion of tracked users fell from 73% at the start of 2021 to 32% by the end of June, per the study. This indicates that most users will decline tracking when asked, and e-commerce marketers should adapt by using new approaches to mobile advertising optimization.
- A costly exercise. The average cost of conversions for e-commerce marketers surged 200% for tracked users and 155% for non-tracked users during the six-month period. These trends are likely to continue alongside heightened competition for ad placements, particularly in targeting the smaller portion of consumers who consent to tracking. To navigate the shift successfully, advertisers can optimize for ROAS, diversify their traffic sources, and implement innovative approaches to managing spend.
- Seismic effect on mobile advertising. “Apple’s privacy changes are ushering in a new era in digital marketing,” said Ikkjin Ahn, co-founder and CEO of MOLOCO. According to Anurag Agrawal, vice president of product at MOLOCO, “ATT has had a seismic effect on the landscape of mobile advertising”. The changes initiated by Apple are making it harder to find the right users, while imprecise targeting manifests itself with higher costs to acquire a particular user.
- The Android ecosystem – the place to be for e-commerce marketers. CPA costs for tracked users increased by 63% after the release of iOS 14.5 and 94% more after iOS 14.6 went live — a 200% total uptick in price. This trend gives advertisers room to expand their efforts within the Android ecosystem, where tracked traffic remains plentiful. CPA costs for non-tracked users increased by 173% after the release of iOS 14.5 and decreased by 6% after the iOS 14.6 update — a 155% move in price overall. The price may have backtracked due to the surge in non-tracked users that occurred after Apple’s latest release.
While the impact of Apple’s changes is still playing out, the study’s findings provide e-commerce marketers with insight into the shift and a strategy on how they can respond most effectively. Novelty Media’s SmartAd, as an innovative and impactful media channel endorsed by mobile operators, runs on Android smartphones, offering unprecedented attention metrics and plenty of options for e-commerce marketers. Keep following our Marketing Bites to find out how we change the game and transform the industry to help you win on mobile.