Welcome back to This Week in Apps, the TechCrunch series that recaps the latest OS news, the applications they support and the money that flows through it all.
The app industry is as hot as ever, with a record 204 billion downloads and $120 billion in consumer spending in 2019. People are now spending three hours and 40 minutes per day using apps, rivaling TV. Apps aren’t just a way to pass idle hours — they’re a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus.
In this series, we help you keep up with the latest news from the world of apps, delivered on a weekly basis.
This week, a handful of top stories lead our coverage. TikTok deal talks this week got hung up over whether or not TikTok can export the app’s algorithms as part of any acquisition of its U.S. operations by an American firm. Apple also made headlines for delaying the rollout of a potentially disastrous iOS 14 change that’s been panicking the advertising community. It also announced that it will no longer ban apps from pushing out security updates and bug fixes, even when App Review has blocked their app updates over policy non-compliance.
Apple delays the mobile ad apocalypse
Apple this week announced it would delay a controversial change that would impact how ads are targeted to iOS and iPadOS mobile users. In a move aimed at protecting consumer privacy, Apple was poised to introduce a new, in-app prompt in iOS 14 that would ask users whether they would like to allow targeted ad tracking or not. Because most consumers generally don’t like the stalker-ish nature of digital ads, you know what they’d choose!
The change involves an identifier known as IDFA (Identifier for Advertisers) that allows advertisers to track how well their ad performs, including which channels drove what quality of users. This lets advertisers make better, more informed choices on their digital ad spend. It’s a key part of app marketing today.
Overall, we’re talking about a massive industry being disrupted. According to eMarketer, the U.S. mobile advertising reached $87.3 billion in 2019. Globally, app install ad spend was $57.8 billion in 2019 and was poised to grow to $118 billion in 2022, per AppsFlyer data. And yet, Apple doesn’t really participate here. Instead, it only offers Search Ads in its App Store. But to promote apps, Apple relies on editorial — like curated collections in the App Store and stories about apps on the Today tab. These can help direct traffic to apps, as can outside press, but the most efficient way to acquire users is paid spend on app install ads.
The mobile ad industry built itself up around the IDFA, offering tools focused on making it easier to measure ad performance and optimize ad spend. Apple was ready to wipe that industry out of existence. And marketers, as you can imagine, were panicking. Even calling it an apocalypse.
As an alternative, Apple was offering SKAdNetwork, introduced in 2018. But it lacked a lot of the information marketers rely on, like attribution or information on impressions, creative, remarketing, in-app events, lookback windows, user lifetime value, ROI, retention or cohort analysis.