In the ever-evolving realm of mobile gaming, one recent change has sparked a flurry of discussions, debates, and blame games: the deprecation of the IDFA.
In a recent episode for GameMakers hosted by Lila Games CEO, Joseph Kim, experts Levi Matkins, CEO at LifeStreet, Warren Woodward, CGO at Upptic and Eran Friedman, CTO at Singular, explored the real-world implications of IDFA restrictions. Read our recap of the top takeaways and insights from this episode.
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Don’t listen to the narratives. There are plenty of viable ways to unlock scale on iOS.
In contrast to the narratives that “UA is dead, iOS is dead,” there are plenty of ways to acquire users on iOS efficiently and effectively. Much of the overhyped negative narratives about the IDFA’s deprecation emerged due to bigger players’ inability to adapt quickly to new privacy restrictions. This is in contrast to startups that have the autonomy to pivot their focus quickly to meet the challenges brought by the IDFA. For many of these players, the majority of their ad buying is still undertaken on iOS.
The takeaway?
Niche games have been most affected by the IDFA’s deprecation.
When the IDFA was first deprecated, iOS spend dropped by 25% across the board. Over time, that decrease evened out, with more spend ramping back up on iOS as players improved their tools. Today, iOS spend is very close to what it was prior to the deprecation of the IDFA.
In terms of game genres most affected, the games that are able to produce more frequent signals have had an edge since the IDFA was deprecated. So, games that offer more frequent small purchases, have mass market appeal, and operate at scale. On the other hand, games that have struggled the most are niche, have a small audience and are whale-driven. [Whales are players who spend a lot on in-app purchases in F2P games.]
Why?
Because games that advertise mostly on Meta and get IDFA opt-in for around one out of seven or eight players have very little data to populate their models — especially if they’re operating at an average 0.5% payer rate and 50K monthly budget.
With that said, there are potential benefits of games to pivot towards casual game genres or any genre that has mass market appeal. This might be through the leverage of a major IP.
Remember: The effects of the IDFA’s deprecation are not happening in a vacuum.
No doubt, the deprecation of the IDFA has had an effect on the business of mobile advertising. But, its effects have been compounded by external trends. Rising interest rates are affecting companies’ use of capital — shifting their focus from R&D investment to profitability. In the industry there has been more discussion on a shifting focus from new game development to existing game growth and live ops. Advertisers are also facing customers coming out of COVID restrictions who may have ad fatigue.
Thriving post-IDFA requires short term investment
Unfortunately, the current economy has put a strain on revenue and profitability. This has hindered UA teams as investment often hinges on a team’s revenue and profitability. Rather than cut budget and save resources, game development companies that invest more in their growth marketing via new hires or the allocation of more engineering and data science — will come out on top.
The investment needed to support growth teams at this time is not as outsized as people want to believe. Short term investments might include working with third parties, licensing tools, allocating more engineering and data science resources or just giving your growth team more time to build post-IDFA systems and do research.
Players should also consider increasing their focus on data modeling, creatives, and contextual analysis. Those that innovate ways to source and enrich the data they feed into their models will have an edge, as will players that comprehensively shift their thinking on creative strategy and data rather than simply “turning the dials” in their campaigns.
More privacy changes are coming
Apple’s deprecation of the IDFA is far from the last time we’ll see privacy changes make waves in mobile gaming.
There is a big privacy change expected from Google coming in 2024. Google has announced their plans of doing their own version of Apple’s deprecation — the GAID deprecation. This will be part of their “Android Privacy Sandbox.” The sandbox is in beta stage and developers have another year to prepare for the changes.
Google’s approach will be different from the IDFA deprecation rollout on iOS. For example, since ads are such a big part of Google’s core business, they are likely to be more mindful of things that could undercut advertising — in contrast to Apple, which largely discounted the value of the UA ecosystem when it came to expanding the reach and discoverability of their products.
The deprecation of the IDFA has changed the playing field
In terms of dominant channels, the players have not changed, they’ve just consolidated. Furthermore, the competitive playing field has leveled out. Today, smaller players have been able to succeed in a healthier, more balanced, mobile gaming ecosystem — versus pre-IDFA when 90% of ad spend went to the duopoly (Google and Meta).
Future trends in UA?
Experts discussed three main emerging trends in UA:
- As more privacy changes are rolled out, acquisition and reporting will continue to get more complex.
- The evolution of generative AI in ad creatives is going to have big impacts on how and where people can effectively buy in the next one to two years. Eventually, creative production costs — whether in-game or in making ads — will be free or close to free.
- Games that leverage Web3 in their economies and cross-platform functionality will have breakthroughs.