Singular: Apple’s privacy changes drove consolidation in mobile adtech

Apple’s privacy changes and the resulting acquisition activity drove consolidation in the mobile adtech market, according to a report by measurement firm Singular.

Singular‘s ROI Index 2022 has 29% fewer ad networks, in comparison to 2021. The report sifts data to come up with the world’s best ad networks.

The result of these mergers was essentially that the rich got richer, Singular reported. Fewer total networks won more placements on regional, platform, and vertical top lists because they’re increasingly bigger, smarter, and more effective than their competitors.

Singular’s ROI Index analyzed the top 300 ad networks, 5,000 of the world’s biggest apps, and over $20 billion in in-app revenue to find the most performant ad networks available for mobile growth. There are thousands of ad networks, but Singular’s goal was to find the best ones for mobile marketers and rank them in 27 different top lists by category, region, and vertical.

Key findings

Apple’s decision to change the way it notified users about privacy had a big impact. It clearly articulated to users that they had a choice in whether or not to be tracked via the identifier for advertisers. With iOS 14.5, many more users decided to opt out of being tracked for ad purposes.

In fact, Facebook mentioned Apple and App Tracking Transparency, Apple’s recently introduced privacy technology, as a key factor in costing Facebook $10 billion in revenue over the next year.

Adtech in general has consolidated around fewer tools since Apple’s big changes in iOS 14.5 and iOS 15, according to the report. 30% fewer ad networks even show up in the listing of top ad networks by reach, scale, lack of fraud, and return on investment. And certain kinds of ad networks have done well at the cost of others.

For example, search engines are doing better. That’s good for Google, and it’s also good for Apple, since Apple Search Ads is primarily driven by search queries. Social networks, however, did not fair so well. At least if their names aren’t TikTok, which doubled spend year-over-year. 

One of the results was that Apple’s own search ads and other search grew 15% to 20%. Apple Search Ads grew 33% in 2021. Google and Facebook still rule, but there are challenges among the top six ad networks, Singular said.

“If you’re growing a mobile game, the one place you can’t ignore is the store or market where someone downloads your app. On iOS, that’s the App Store, and Apple owns the only ad network that can advertise on it: Apple Search Ads,” said John Koetsier, consult for Singular and author of the study, in an email to GamesBeat. “Interestingly, while Apple’s recent privacy changes force all other ad networks to use a relatively new marketing measurement framework created by Apple, Apple Search Ads doesn’t use it. Also, interestingly, Apple Search Ads grew 33% a year, according to a new report by marketing analytics company Singular.”

The top ad network is Facebook, followed by Google Ads, Apple Search Ads, Unity Ads, Snapchat, Liftoff, and Twiter.

Apple’s iOS privacy changes made device identifiers, which enable third-party targeting data for advertisers, hard to acquire and use. First-party data, however, is less impacted, meaning more bigger ecosystem players with more consumer touches can both target and deliver ads better.

Now we’re seeing the impact: There are 43% fewer names in the top echelon of advertising success.

Growth of intent/search

As device identifiers grew rare on iOS, search-based ad networks including Apple Search Ads and Google Ads grew their share of the market by 15% to 20% over the year.

Without device identifiers, behavioral targeting is hard, leaving only contextual targeting and search-based targeting. Search has always been a high-intent form of ad targeting, driving outsized returns over contextual targeting, and so search-based networks grew.

Apple Search Ads became the highest-quality ad network for iOS mobile user acquisition, providing the best return on investment for mobile marketers. It also provided measurable quality when others couldn’t after iOS 14.5 debuted in the spring of 2021.

Thanks to M&A activity, Singular saw a clear emergence of a second tier of ad networks below Google and Facebook. Those include Apple Search Ads, AppLovin, IronSource, the combination of Liftoff and Vungle, TikTok, and Unity.

The full report has details such as which ad networks have made the transition to post-IDFA to Apple’s SKAdNetwork methodologies. It also covers TikTok’s big jump changes with social ad inventory in an era of more privacy, the emergence of Unity Ads, and why Facebook and Google are still on top.

During the past year, adtech companies such as AppLovin, IronSource, Liftoff+Vungle, and Digital Turbine became the new middle tier in adtech, after Facebook and Google.

Why is Google still doing OK? Koetsier said search is a high indicator of intent, which has always been a strong driver of both ad relevance and, importantly, readiness on the part of searchers to click, install, subscribe, or buy. So Google’s recent quarterly results remained strong even on iOS … and of course with Android, Google has much less exposure to iOS changes as a percentage of its business than Facebook.

The nice thing about Apple Search Ads, at least from Apple’s point of view? It’s literally a triple threat for accurate ad targeting, because it works off of a search on the App Store, so it knows user intent, and it’s contextual.

Apple places App Store ads in the right context besides relevant ads. And finally, Apple has behavioral data no one else knows: Apple sees what iOS users do in other Apple apps and uses that to help target the appropriate ads to the right user at the right time.