Ep. 5 - Performance Marketing in a Post-IDFA World

In this week’s episode, we asked mobile marketing expert Eric Seufert for his take on upcoming privacy changes in iOS 14 and why the post-IDFA world presents a huge opportunity for mobile app developers.

Since Apple’s big announcement about upcoming privacy changes in iOS 14, mobile app developers have been scrambling to understand how these changes will affect their businesses. With IDFA effectively dead in the water, developers will no longer be able to use device-level attribution and high-resolution tracking to send targeted ads to their users. So what can they do?
In this week’s episode, we asked mobile marketing expert Eric Seufert for his take. Eric has had quite a career in mobile. From VP of user acquisition at Rovio to his recent consulting projects with subscription app companies, Eric has a depth and breadth of experience with mobile apps and games that few can match. He’s also a prolific writer. He wrote a book on freemium economics and has written hundreds of insightful articles on his site Mobile Dev Memo.
In this episode, you’ll hear about:
The difference between user acquisition and quantitative analysis in mobile marketing
What Apple’s privacy changes mean for the App Store economy
Why the post-IDFA world presents a huge opportunity for mobile app developers

Follow Us:

David Barnard: https://twitter.com/drbarnardJacob Eiting: https://twitter.com/jeitingEric Seufert: https://twitter.com/eric_seufert

Here’s the Outline of Our Interview with Eric:


[1:07] Managing user acquisition at Rovio; freemium app dynamics at scale.
[3:15] Incrementality testing; the power of the Angry Birds brand.
[5:32] The efficiency of the Rovio funnel; 20-30% click-through rates during the launch of Angry Birds 2.
[6:30] Why it’s hard to determine the effect of a specific ad channel; holdout testing.
[9:10] The difference between mobile and traditional advertising: response time; Pepsi Super Bowl ads.
[11:09] Quantitative analysis in mobile marketing; QuantMar.
[11:46] What is a UA practitioner? Performance marketing; understanding metrics on revenue, installs, and campaigns.
[13:42] Why you don’t want the platforms themselves monitoring your performance metrics.
[14:10] Google’s perverse incentive; can budget and bid increases improve campaign performance?
[17:00] Lack of IDFA gives more power to the platforms, less visibility for marketers purchasing ads.
[17:21] Google Analytics; monetization and transparency.
[19:54] Algorithmic trading; data modeling.
[22:10] Why Eric doesn’t like the term “user acquisition.”
[24:06] What Apple’s privacy changes mean for the next few months/years of mobile development; IDFA and SKAdNetwork.
[29:35] Deterministic vs. non-deterministic paradigm; ad optimization.
[31:00] Why post-IDFA is more work for advertisers but provides a bigger opportunity.
[31:47] Filtering engaged/monetizing users at the content level vs. the ad platform level.
[31:54] Probabilistic measurement; the updateConversionValue parameter.
[35:38] Personalization in the post-IDFA era; real-time changes to the product experience based on user interaction.
[37:43] How App Store changes have shaped the entire mobile app market; Top Charts.
[39:32] Was Apple’s IDFA decision an intentional strategy, or were they unaware of how much it would affect the mobile app development industry?
[40:00] Apple doesn’t appreciate the complexity of the App Store dynamics.
[42:16] Eric’s thoughts on Apple’s motivations: control over App Store distribution; Epic Games drama.
[42:50] Apple has identifying information on individual users; high- versus low-resolution tracking.
[44:25] Prediction: SKAdNetwork changes will most likely go into effect this January.
[45:10] The problem with conversion paths: the race to the middle; extreme price discrimination.
[48:55] Will smaller apps (with smaller ad budgets) be disadvantaged by SKAdNetwork? Calm; Headspace.
[50:16] Apple seems to be paying attention to developers and want to get this right.
[51:05] Mobile Dev Memo Investment Syndicate.

Quotes:
“When you’re spending a lot of money and you’re showing a person five ads a day, incrementality is critical in figuring out how much value did this particular ad contribute? … That’s the more interesting question because when these budgets get really large, you get these signals coming from all these different mediums, and figuring out which of those actually drives value is more important.” - Eric
“That’s what’s so interesting about the mobile ecosystem: that immediacy, that kind of lack of friction.” - Eric
“Just doing the fun clicking around Facebook Ad Manager, that’s not performance marketing. That’s advertising operations or something.” - Eric
“Google’s always going to tell you to spend more money. Whatever question you ask Google about improving your performance, it’s like, “Oh, just pay more money!” - David
“These systems were designed to sort of alleviate that need, on the part of the advertiser, to not have to have this big team of data scientists working on these models. Like, “Hey, we’ll do it for you!” And to be honest, Google could do it better than any individual advertiser could — it’s Google. And just the fact that they’re syndicating all that data across all these different advertisers, they just have more data than any single advertiser could. And that’s a good thing.” - Eric
“This is something I think Apple has failed at since the very beginning of the App Store: understanding the way their individual, seemingly small decisions end up shaping the entire market… Now we have SKAdNetwork, we have one ConversionValue, you can’t update it in the background, you can only do it once, it has these weird timers… the entire market for apps is going to reshape around the shape of SKAdNetwork versus it having been shaped around the existing tools.” - David
“There’s billions and billions of dollars being generated in the App Store, and it’s such a tiny little market, so people put in the effort to find ways to game, to maximum advantage, any point of leverage that Apple gives them. So now people are poring over the SKAdNetwork documentation just trying to find ways of like well, “How can I best use ConversionValue?” It will shape the design of apps. It’s going to be a totally new design paradigm.” - Eric
“I just get really scared because ultimately if [Apple gets] it wrong, we’re gonna see apps moving in a direction that just is for them to extract the most value across the ecosystem and not necessarily provide great experiences for each user. I think lower resolution tracking, in this sense, actually can lead to that.” - Jacob

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