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The Implications of iOS 14.5 on Subscription apps

  • Ido Wiesenberg
  • May 4, 2021
  • 6 minute read

Voyantis is the first no-code growth platform, empowering Growth & Marketing teams that want predictability while scaling fast. We provide a new way to optimize growth by utilizing AI to create LTV predictions and turning them into an engineering-free, automated, growth optimization solution. The result? over 200% ROI uplift for our partners

The iOS 14.5 public beta is here! With just 13.5% of marketers being fully prepared, now is the time to get caught up and ensure your business is effectively utilizing this change.

Suppose you have been in the subscription-based app business for a while. In that case, you know that finding the right strategy and signals to optimize your campaigns is a process that requires time, learning, measurement, and repeated optimization. And if you were comfortable with your user acquisition strategy, the cards are about to get shuffled. 

In this blog, we’ll dive into what iOS 14.5 means for your subscription app and the implications those changes will drive. 

Why now?

As part of the broader global focus on data security and privacy, Apple announced the changes to its Identifier for Advertisers (IDFA) at the Apple Worldwide Developers Conference in June 2020. After delaying the launch date time and time again, the moment of truth has come, and it will affect everyone!

What’s ahead: changes to Apple’s IDFA will present new growth marketing challenges. Advertisers will have to navigate the delicate balance between users’ quality and quantity while learning to work with user value, not user actions. 

User-level Marketing Data Availability will Decrease Tremendously

iPhone users will now have to choose whether they want to opt-in to IDFA tracking for their individual-level data to be collected and analyzed. Only 10–40% are expected to do so

Opt-in / Opt-out Rate Affects User-level Marketing Data

Networks will no longer automatically track the ad clicks a user makes across different websites and platforms. The ad campaign success measurement will have to go through Apple’s API for ad networks, SKAdNetwork. Cohort reporting on the 80% is going to be much cruder, it will be more limited to the first couple of days of a user’s lifetime. This means there will be a lot of “missing” data; the lower priority events will not be reported, and the higher priority events that happen “too late” will suffer the same fate. 

The implication is that advertisers will have to make projections and decisions based on the much smaller and partial number of users that opt-in and events reported at the cohort level. Balancing quantity and quality will be front and center, and more challenging than ever. 

Retargeting Gets a Lot More Competitive

While remarketing through email and push notifications is still available, with such a low projected number of users opting in, a smaller audience base will be built for retargeting campaigns. That means that retargeting is going to be a lot less effective. Many subscription apps, especially ones with a free trial, focus on retargeting as one of their main strategies. Companies will have to adjust to higher competition for the smaller potential audience as remarketing will only be possible for opt-iners and will be more expensive and yield a lower Return on Ad Spend (ROAS). 

Additionally, the opportunity to optimize a campaign using Facebook measurement reporting will almost entirely disappear due to lack of visibility into age, gender, and region, which is considered user-level data.

Considering all of the challenges described above, marketers will have to rebalance their budgets towards prospecting and rely a lot more heavily on their first-party data for remarketing campaigns via text or email. 

Lookalikes are a New Challenge

The difficulty in using tools like lookalike audiences stems from the fact that lower numbers of opt-iners make it challenging to create lookalike audiences. For example, on Facebook Ad Manager, advertisers need 100 people who triggered the same event in 7 days. Limited third-party data will likely lead to a lower quality of custom and lookalike audiences. To avoid settling for lousy traffic, advertisers will have to get sharp on signal selection to build look-a-like campaigns and rely on broader audiences than before.

Accurate Attribution will Become a Big Challenge

The deprecation of the 7-day view-through, 28-day view-through, and 28-day click-through attribution windows will affect the way you measure your attribution today.

Whether or not users opted in, all attribution will be cut to 7 days. FB might even reduce this to 24–48 hours. That’s a lot less time to extract quality conversion and attribution data, meaning marketers will suffer a lower attribution quality and will need to give up meaningful events such as subscriptions and upgrades favoring upper funnel conversions.

Changes to the Measurement of Costs, Revenue, and ROAS

Conversions and measurement reporting will be cut on day 7, and if you’ve been using longer conversion windows, get ready to change the way you measure your cost per conversion. For return on ad spend, you will only be able to measure the 7-day ROAS, meaning the costs you’ll see in the ad manager will be higher than you’re used to. Furthermore, most MMPs and ad networks recommend even cutting this down to 1–3 days to deal with the additional 48–72 hour delay between when an event occurs and until it is available to the network. We might even see this enforced, so get ready.

There will be Fewer Signals to Rely on

Whether or not you have an app, these changes will affect you. If you don’t have an app and you’re on the mobile web, you will still have to work with eight event limits or custom conversion events – per top-level domain.

Whether they use an MMP or the Networks’ updated SKAdNetwork-ready SDKs, companies across the board are going to have to roll up their sleeves and make some severe cut downs. It won’t be possible to optimize ads beyond the prioritized 8, meaning there will be no reporting of anything that doesn’t meet the prioritization benchmark. 

Subscription Apps will Have to Find the Right Signals to Optimize for

The changes affect the mid-lower funnel, precisely where we usually find the events that drive so many of the conversions for subscription apps. Finding a way to extract value from the events happening earlier in the engagement cycle will be a real challenge. How do you mitigate the risks associated with these changes? As attribution is bound to decrease, marketers will need to rely on new strategies and leverage their first-party data.

If previously, you could follow the user from registration or free trial to paid subscription and type of use, noting what event caused them to convert; with iOS 14.5, you no longer have that option. Following iOS 14.5, marketers should create hierarchical events that correspond to a score. For example, a higher score would be given to an amplification event where the user has a free trial but uses the app daily.

Taking this notion to the next level, I believe that predictive modeling would play a leading role in leveraging first-party data to truly embody users’ future value and provide a significant competitive advantage for those brands who will implement them early. 

Final Thoughts

When iOS 14.5 officially launches, it will seriously change the rules by which many marketers operate in the mobile sphere, and the new status quo feels a bit overwhelming.

The new Apple OS requires explicit consent, thus decreases the volume of IDFA dramatically and changes many marketers’ strategies and best practices. 

Many important functionalities won’t be as widely available, so the savvy marketer must re-strategize their mobile campaigns, budget allocation, measurement and optimization capabilities. This is not a simple task, but to me, one thing is very clear; putting your focus and investment on improving internal data and modeling capabilities is the best course of action to provide marketers with that competitive advantage. 

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