Apple’s iOS 14.5 Increases Key Profitability Factor for Android Apps by 2.5
IPhone and iPad ad spend fell 32% from their peak in 2021. While in early February, advertisers shared their spend 56% to 44% in favor of Android, in mid -June the distribution was 70% to 30%.
And as a result, Android apps are becoming more and more profitable.
Apple’s recent iOS 14.5 update essentially cheapened IDFA, Apple’s identifier for advertisers, making it accepted by consumers. This makes mobile advertising safer and more private, but it also makes it more difficult to measure and evaluate. Based on a $ 1.5 billion ad spend slice that I researched last week for marketing measurement firm Singular, advertisers have started shifting dollars to Android – which is still fully measurable – around the same time Apple released iOS 14.5: the week of April 26. (Full disclosure: Singular is an advisor.)
As a direct result of the influx of additional marketing dollars, Android ad prices have caught up and eclipsed iOS ad prices for the very first time, AdLibertas says. And that has significantly boosted the monetization of Android apps: New users’ 90-day predictive value for Android apps increased 2.5 times in June compared to April numbers, according to AdLibertas founder and CEO, Adam Landis.
Meanwhile, the 90-day predictive value of iOS users has dropped by around 50%.
It is difficult to overestimate the importance of this matter, even if it is temporary.
One of the most fundamental assumptions about mobile over the past decade is that marketing on iOS is more expensive because iPhone and iPad users and customers are worth more than Android users. At least at this point in history, that is no longer true.
There are a few caveats to mention here.
It is likely that there was a surge in iOS marketing before the launch of iOS 14.5. App developers and marketers knew the “free IDFA party” was ending soon and likely spent more freely in early 2021 than they otherwise would have. And, as marketers adjust their growth technologies to account for new ways to measure and evaluate mobile users that take advantage of Apple’s SKAdNetwork framework and other tools, the pendulum is likely to turn back. favor of iOS.
It’s a simple math: the average iPhone buyer easily spends $ 400 more on a device than the average Android owner.
Ergo: they are richer and more valuable for advertisers.
If, however, this signals a drastic shift in marketing costs and profitability per platform – even if the balance falls somewhat to iOS – it could have long-term impacts on developer investments in Android and iOS. . In other words: if you can make more money on Android than on iOS, you are more likely to publish apps on Android. Even a small change that only increases Android’s profitability by around 20% will impact the investment of app developers and publishers.
And over time, a platform is only as good as the apps it supports.
This change is likely to stabilize and reverse somewhat. But it’s a warning to Apple that the developers it says it supports – 76% of whom depend on ad revenue – are at least for now making a lot more on Android.
What about IDFA membership rates?
Globally, they follow only 23.64%. Since for effective measurement marketers need a double opt-in (announcement application and The advertisement app), this basically means that full traceability to the 2010 to 2020 is only available to a tiny percentage of their mobile users.
With iOS 14.5 global update rates of around 52% and rapidly increasing, iOS developers could experience a lot more pain in the weeks and months to come. Ultimately, iOS monetization will likely return, with some degree of degradation, however.