Robert Wildner, co-founder and CEO of AVOW, explains how mobile OEMs can offer advertisers an alternative to Google, Facebook, Amazon and Apple.
It’s been 18 months since Apple introduced its App Tracking Transparency (ATT) framework, which requires iOS apps to ask users for permission to track activity across apps and websites. The update had a profound impact on the entire advertising industry, meaning brands can no longer ensure the accuracy of their targeting or see the true impact of their spend. As a result, nearly 50 percent of e-commerce advertisers surveyed had reduced their spend on Facebook by more than 25 percent, according to The Wall Street Journal. Overall, the data suggests that Apple’s updates have also resulted in a 40 percent reduction in the average mobile marketer’s ROI.
As advertisers spend less on these platforms, some have also attributed the decline in GAFA’s stock prices and slowing revenue growth to these new privacy changes. Mobile industry thought leader Eric Seufert has even gone so far as to say that the new privacy headwinds, combined with changes in consumer preferences, have led to a “recession in the social media advertising economy.” But how big is the true impact of the tracking storm – and how can mobile marketers survive it?
Shifting ad spend to Android: a safe bet?
Many advertisers have managed the ATT fallout by redirecting ad budgets to Android instead, where they can continue to benefit from user-level data. In fact, recent data shows that up to 59 percent of marketers in the US and UK are increasing their spend on Android while decreasing their spend on iOS.
But those marketers who put all their eggs in the Android basket should be on their guard. Google will follow Apple’s lead after recently announcing that it will remove access to the Google Advertising ID. This is an Android-generated ID for a device, which is used for attribution, segmentation and personalization – meaning that running and optimizing campaigns on Android will soon be as difficult as it is on Apple.
Alternative app stores enter the marketing mix
Fortunately, there is an alternative to the Apple and Android duopoly. Mobile Original Equipment Manufacturers (OEMs) are becoming an increasingly popular option for marketers who have reached an advertising plateau on GAFA or are unwilling to inject further advertising spend into these channels. OEMs include Xiaomi, Vivo, Samsung, Oppo — and according to consulting firm IDC, these four companies accounted for over 50 percent of global mobile phone shipments in the second quarter of 2022. These OEMs operate their own dedicated app stores, called alternative app stores, where they can distribute applications directly to their customers – and brands can benefit from effective, targeted advertising campaigns.
This is because OEMs have their own advertising ID called Open Anonymous Device Identifier (OAID). OAIDs are not subject to the same privacy regulations as Apple and Android, meaning marketers can still run deterministic, tracked campaigns. Beyond the targeting opportunities, OEMs also offer a wealth of high-quality, unused users at lower prices, all in a fraud-free environment. This cost efficiency is one of the biggest benefits of working with OEMs, especially in the current economic climate. Forget cost-per-click models – with mobile OEMs, advertisers only pay for installations.
Do you think mobile OEMs are still a niche market? Think again: The industry has grown rapidly in recent years, with many wireless OEMs becoming the device of choice for consumers in the Asia Pacific and Western markets. Samsung is the most popular smartphone brand in Europe today with a 32 percent market share, with Xiaomi and Oppo in third and fourth place respectively. Xiaomi is the most popular smartphone brand in Spain with a market share of 28.5 percent. Don’t forget Vivo and Oppo either: both invest heavily in branding to strengthen their position. Vivo was one of the main sponsors of last year’s World Cup and UEFA Euro 2020, while Oppo sponsored the UEFA Champions League.
Mobile OEM users are also typically very engaged and willing to open their wallets: in 2021, revenue for third-party stores averaged $36 compared to Google Play’s $42. As mobile OEM adoption continues to grow, there has never been a better time to add alternative app stores to your marketing mix. A new European Union competition law due to come into force in 2024 has also forced Apple to allow alternative app stores on its iPhones and iPads. Similar moves can be seen on Android, where brand new devices from OEMs are recently shipping with the OEM’s native app store by default. By opening up their systems to competitors, brands can bypass Apple and Google’s gatekeeping while still meeting their growth goals.