Looking ahead: 2022 in the mobile landscape

2021 was a transformative year in the app ecosystem. The news of Apple’s privacy changes and the IDFA deprecation threw a monkey wrench into how we managed user acquisition, while the mobile app ecosystem as a whole hit an inflection point in its maturity, with rapid consolidation across mobile gaming and mobile ad tech.  In many ways, these changes reset the playing field and challenged the balance of power between developers, platforms, walled-gardens, and ad networks.

Although the dust of 2021 hasn’t fully settled, it’s safe to say that the impact on user acquisition, retargeting, attribution, and overall monetization strategies will carry over to 2022, and several trends are already worth calling out.

2022 will still be a year of experimentation for mobile user acquisition


As the entire mobile landscape transitions to less personalized advertising, the importance of spreading marketing efforts across the entire marketing funnel increases. Historically, mobile user acquisition evolved to focus solely on the very bottom of the funnel, measuring success strictly based on conversions. 


For mobile-first marketers, media mix was synonymous to budget allocation across channels that occupy the same spot on the marketing funnel. With the model of last-touch attribution being so severely challenged, marketers become more open to exploring additional advertising tactics and channels that put more emphasis on generating an awareness and distribution advantage, with lower reliance on user data. 


The seismic changes predominantly stemmed from iOS, but the shock waves influenced Android in two ways: 


At the macro level – Apple charted a path towards a more privacy-centric ecosystem, making it clear that the change is inevitable on the Android side as well, and it’s only a question of implementation. 


At the micro-level – the restrictive nature of Apple’s SKAdNetwork solution made certain campaign optimization use cases less viable on iOS.  A prime example of that is the 100 campaign IDs limitation on SKAdNetwork, which makes it near impossible to run effective creative a/b testing on iOS, leading many marketers to shift more budgets towards Android in order to test different creatives or even targeting and segmentation settings.


Looking into 2022, marketers will need to rethink media mix in a broader way, and explore new channels that aim for broader distribution, such as on-device UA or influencer marketing, alongside testing a broader array of hyper-targeted bottom-of-the-funnel channels.


The waterfall will (finally) fade into the background


“This is the year the waterfall dies” has been a recurring prediction over the last 3 years, one that failed to recognize that the speed of this transition away from the waterfall into a pure auction environment is dependent on multiple large companies, who to successfully switch their infrastructure and operation from a waterfall setup to a bidding one, while delivering the same or better results for publishers.

So why should this year be any different?

Despite the waterfall surviving the news of its own demise, consistent and continuous progress towards a bidding-first reality has been made over the last 3 years, and by the end of this year, several prominent ad monetization partners are expected to complete their transition to bidding.
Even today, a growing number of publishers see more than 50% of their revenue being driven by bidding partners, and the waterfall is gradually contributing less and less to overall monetization.


With that in mind, a reality in which the waterfall will generate less than 20% of ad revenue becomes increasingly likely, and the overhead associated with waterfall management will push publishers to significantly trim it down or eliminate it altogether.


Programmatic tools like private marketplace (PMP) and direct deals will play a bigger role in ad monetization 


It’s taken a few years, but the rise of in-app bidding helped improve the programmatic savviness of mobile app developers. Publishers want more control over what ads run on their apps, and advertisers want better access to premium inventory. The transition of more demand partners to an auction environment meant that the old model of negotiating higher CPMs in exchange for better access to inventory (read – higher rank in the waterfall) no longer carried the same monetization impact for developers. Private Marketplace Deals (PMPs) offer publishers a mechanism through which they can carve out specific segments of their inventory and secure higher prices and fill rates for that inventory without having to manually adjust pricing for multiple partners across the waterfall.


This evolution in relationships between demand players and mobile app publishers also manifests itself in more direct deals, as more publishers start shopping their media kit with agencies, while direct-to-consumer brands and pure brand advertisers, who originally may have seen mobile apps and games as a niche, difficult-to-measure channel, have come to recognize the value of this channel in reaching high-intent, valuable audiences.


Looking into 2022, customized programmatic deals are an effective way to ensure that in-app advertising campaigns reach their target audience at the right mobile moment. Not only do they provide more transparency and control, but also they are effective tools for optimizing campaigns, inventory, and pricing in a programmatic auction environment.


Increasing the value of brands in the ecosystem


How do these trends play into the palms of brands? The growing adoption of bidding means that mobile game developers are able to maximize ad monetization and automate time-consuming processes. Publishers rely on programmatic tools for a number of reasons, the main one being: Buyers like it. According to eMarketer, the total US digital display ad spend that goes through programmatic is projected to increase to 88.2% in 2022. 


Programmatic tools lend themselves well to growing the share of brand advertising in a publisher’s overall monetization strategy. This is because programmatic (i.e. running campaigns through DSPs) and PMPs specifically are a preferred campaign delivery method for brands. Brands and agencies enjoy the convenience and efficiency of finding their audiences wherever they’re engaged, and at the rates they want. Because brand campaigns don’t typically leverage device graphs and user data in the same way performance campaigns do, they were less disrupted by Apple’s recent privacy changes. With the proliferation of programmatic tools, publishers can start packaging audiences for those brands (based on aggregations of the publisher’s 1st party data), and further accelerate the transition brands are making to the privacy-aware mobile app ecosystem.


Follow the yellow brick road of gaming


While the pandemic was instrumental in introducing new gamers to mobile gaming, Apple burdened the ecosystem with the ATT rollout. But, with the steady growth of gaming, experts predict that by 2024, mobile will account for about 73% of video ad spending, which further solidifies the worth of exploring how publishers and advertisers can ensure a high-quality experience, in the right place, at the right time. More so, in the recent “Life of a Mobile Gamer” report published by AdColony, (where we learn who these mobile gamers are, and how their online and offline habits align) the report revealed that nearly nine out of ten (87%) mobile gamers remembered seeing ads while playing mobile games. 


For many advertisers, these factors are what make the gaming ecosystem an attractive communication channel. Over time, brands have grown to appreciate both the diversity of mobile gamer demographics and the fact that these are highly engaged audiences that often leverage opt-in ad formats like Rewarded Video or Offer Wall as part of their user experience. 


Discussing each trend individually could fill a book. But, by looking at the shifts together, we can gain a more holistic view of the industry, understand the value that each trend brings and make informed decisions about how to better tap into effective strategies for boosting ad monetization, reaching relevant audiences, and provide a strong branding experience – especially in an ATT and IDFA-less arena.

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