Mobile App Advertising Benchmark Report: Apple Search Ads (ASA) makes moves

iOS versions where AppTrackingTransparency (ATT) was enabled reached mass adoption in June 2021, so it’s a good time to do a full comparative Year-over-Year (YoY) analysis of its impact on mobile app advertisers. That’s exactly what we’ve done in our most recent “Mobile App Advertising Benchmark Report”. In it, we break down the impact on app advertisers’ media mix over this period, based on the proprietary performance advertising data managed through the Appsumer platform.

You can download the full report with detailed insights here, however, I just wanted to break down some of the key high-level findings quickly.

Meta vs Apple Search Ads (ASA)

The key headline is the comparison between Meta and Apple Search Ads’ (ASA) advertiser adoption and share-of-wallet changes YoY. ASA joined the duopoly of Meta and Google at the top table of advertiser adoption as it grew adoption nearly four percentage points YoY to 94.8%, while Meta adoption declined three percentage points to 82.8%.

This trend also played out with share-of-wallet as ASA gained five percentage points YoY reaching a 15% share, whilst Meta declined four percentage points YoY, still finishing significantly ahead with a 28% share. Meta also recovered share-of-wallet when comparing Q4 21 to Q2 22, suggesting that they’re starting to recover from initial ATT headwinds. Google remained fairly steady on both metrics as most of their inventory sits on the Android platform.

The question now is how much can Apple increase ASA’s share-of-wallet, given that inventory is constrained by the volume of searches on the App Store? It appears that a DSP could be Apple’s answer to further their first-party data advantages on iOS, if rumors are to be believed.

TikTok pushes ahead of Snap

In the lower tier of channels, TikTok is now ahead of Snap for both advertiser adoption and share-of-wallet. However, TikTok’s advertiser adoption declined nearly seven percentage points YoY to 43.2%. Their share of wallet remained steady at 3% suggesting that some advertisers are succeeding, while others are struggling to come to grips with the platform.

Snap’s challenges with ATT and economic headwinds have been well documented, which is evident in adoption and share-of-wallet. Their share-of-wallet halved YoY from 4% to 2%. However, while adoption declined three percentage points YoY to 32.7%, it bounced back from 25.4% in Q1 22. This could be a sign of recovery and potentially a leading indicator for share-of-wallet gains in coming quarters.

Smaller advertisers struggle with cross-channel complexity

While the number of channels used by advertisers didn’t move significantly on average, the underlying data shows bigger deltas.

The largest advertisers increased by 1.4 channels used YoY to 10.7 on average, while the smallest advertisers decreased by 1.1 channels to 2.5 on average. The largest advertisers likely increased channels to maintain volume when performance dipped on some channels. However, smaller advertisers struggle to deal with this cross-channel complexity in an ATT world given their smaller creative, data and optimization resources. This left them struggling to scale channels when performance dipped.

What does this mean for advertisers?

For advertisers, these trends suggest that some changes are needed to media mix as the industry gets used to the post-ATT world:

  1. Share-of-wallet and adoption movements suggest that performance has suffered on Meta and Snap in the post-ATT world, while opportunities are there on ASA, TikTok and independent DSPs and ad networks. However, it’s worth noting:
    1. ASA is constrained in inventory by search volume on the App Store, so costs could quickly become unsustainable as more advertisers flock to the platform. However, it’s worth keeping an eye on rumors that Apple could soon be launching their own DSP, which would provide more inventory with the benefits of Apple’s first-party data for targeting and measurement.
    2. TikTok is clearly working for some advertisers and less so for others. Making sure the audience matches with your own is important to understand before investing significant effort. If it fits, spend time understanding creative format and tone best practices, given the important differences with context versus traditional app performance channels.
  2. There are signs of recovery on Meta and Snap, and being a first mover to scale as these platforms recover will have a definite upside. So, continuously watch performance metrics on these channels and test scaling spend regularly when you see opportunity.
  3. For smaller advertisers, it’s clear that ATT has constrained channel diversification. However, looking at the top tier of spenders, they’ve had to diversify further as channel performance was hit. So as a smaller advertiser, it’s apparent that you need to find leaner and more cost-effective ways of dealing with cross-channel complexity to diversify spend. The key is likely in lean experimentation with new channels and cost-effective  solutions to deal with cross-channel data complexity. 

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