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Expect These 7 Mobile Ad Trends in 2022

Expect These 7 Mobile Ad Trends in 2022 Image Credit: bernardbodo/Bigstockphoto.com

Last year brought about a significant number of changes affecting mobile advertising, and it looks like 2022 may be even more dramatic. As more state, federal, and international governments enact consumer privacy acts and companies make drastic changes regarding how they protect consumers’ privacy, it’s definitely not business as usual in the mobile ad business. Marketers are having to completely rethink their proven advertising strategies and many are focusing on reframing their advertising approaches for these changing conditions. Here are seven mobile ad trends to anticipate in 2022.

#1: What 2021 brought and how the advertising landscape is changing

One of the biggest challenges in 2022 will be around advertising ID (AID) and other identifiers. The whole advertising ecosystem is changing drastically, and advertisers will have to change with it.

Apple made the tracking of personal data “opt-in” with its IOS 14 release. As of September 2021, only around 21% of consumers have opted in to allow app tracking. Google is limiting identifiers in Android in late 2021.

This is having a noticeable effect on media ad-spend. Advertisers are spending more on Android devices, where marketers can still track who clicks on what ads and see the result. During one week in February, marketers spent 56% of their budgets on Android and 43% on iOS. During a week in June, the split was 70% to Android and only 29% to iOS.

At Facebook, too, advertisers are shifting their iOS ad spend to reach Android users that they can still track. In September, U.S. Facebook mobile ad spending on Android was 86% and on iOS, only 12%.

Although Google delayed its phasing out of third-party cookies to late 2023, now’s the time to figure out next steps. Marketers are talking about what will happen with universal identifiers as an alternative to third-party cookies since Google announced it will not allow alternate identifiers in Google products; the importance of incorporating more and higher-quality first-party data into their marketing strategies; and renewing focus on contextual targeting, or placing ads where they match website content.

#2: Data privacy and protection

Interactive Advertising Bureau (IAB), in a joint report with PwC on the digital ad ecosystem outlook for 2021, writes that “85% of global consumers say they wish ‘there were more companies I could trust with my data.’” That’s resulting in a move toward companies respecting privacy and data usage. With such a profound shift in how people’s personal information can be accessed and used for marketing, we’ll see a significant impact on how businesses earn money digitally.

Adtech companies have been preparing for data privacy and protection changes and will use contextual and anonymized data. These changes will strongly affect companies accustomed to retargeting by showing someone ads from brands and products they’ve viewed before. We’ll see the use of data and machine-learning technologies to rely on “probabilistic targeting” to reach specific audiences.

Facebook has been working on new ways to deliver highly relevant ads without having people’s personal data. That includes Private Lift Measurement, a privacy-enhancing technology that uses secure multi-party computation, which it’s testing as a new way to understand how campaigns are performing while also adding privacy measures.

Facebook may also face increased regulation - which would impact the industry as a whole - as a result of algorithm specialist and whistleblower Frances Haugen’s recent testimony before the Senate. Haugen leaked internal Facebook documents to the Wall Street Journal and filed complaints with the Securities and Exchange Commission. She said Facebook hides what it knows about the adverse effects that stem from its platform. She stated that “the choices being made inside Facebook are disastrous - for our children, for our public safety, for our privacy, and for our democracy - and that is why we must demand Facebook make changes.”

#3: The pandemic accelerated moves to mobile

The COVID-19 pandemic accelerated mobile device sales and the amount of time spent on mobile, in some cases by years.Workday mobile usage is up, as is in-home data usage and mobile payment platforms used at point-of-sale.

The average time spent with mobile increased by 31 minutes in 2020 to reach 4 hours and 16 minutes for U.S. adults - and the gains will stick. So while growth is expected to slow in 2021, it will be from a much higher baseline. The pandemic also accelerated the growth of existing trends, except for travel-related and digital audio apps, both of which are expected to rebound. 

All that move to mobile went hand-in-hand with more money spent on e-commerce and increased return on ad investment. Consumers spent $143 billion on mobile apps in 2020, a 20% year-over-year increase. Mobile ad spend is expected to top $290 billion in 2021.

When compared to pre-pandemic numbers, overall app installs were up 19% post-pandemic, organic app installs rose 21%, and paid app installs were 15% higher. Streaming almost doubled in the first months of the pandemic and health and fitness app installs rose sharply when people couldn’t get out to their gyms.

But it isn’t only organic installs. Paid media shot up, too, and shows no signs of decreasing.

#4: Focus on ad quality and creative control

Ad quality will be more critical than ever before. When developers have visibility and control over the ads they offer to their apps’ users, they can review ad performance, improve the user experience, report content violations, and improve brand integrity and ad monetization.

Rethinking the creative process will also be critical. Without the specific user data we’re used to, advertisers will have to figure out other ways to target their ads. Contextual advertising is one way. For example, placing fashion ads within a fashion app creates a seamless experience that customers like. Or advertisers can make an ad contextual by creating messages that attract the specific type of person they want to reach.

#5: Many new and maturing markets

Markets have matured, and that trend is rising. As a consequence, advertisers are spending in an increasing number of markets. While advertisers used to spend primarily in the U.S., there are now at least five or six other strong markets.

  • Mobile spending in Latin America, where on-demand app services and mobile banking are becoming the norm, is forecast at $8.29 billion USD in 2021, a 20% increase over the year before. Latin America is one of the world’s fastest-growing mobile markets.
  • Africa is one of the fastest-growing regions in terms of the global app market. Between Q2 2020 to Q1 2021, Africa’s in-app advertising revenue increased by 167%.
  • Saudi Arabia, United Arab Emirates, and Kuwait have already reached European levels as to numbers of mobile subscribers.
  • Eastern European Union and Turkey are seeing mobile take off, especially gaming and entertainment. Ad spend in Turkey is projected to hit $707 USD million in 2021. By 2025, 60% of total ad spend there is expected to be via mobile.

As more people worldwide use smartphones, it becomes easier to communicate ad messages directly with consumers, who are already shopping, researching, working, and reading on their devices. It’s not only easier to contact customers, who usually have their phone powered on and next to them, but also reach a target audience, build relationships, and track responses. These maturing markets will provide even greater opportunities for advertisers.

#6: Why China’s rise is significant

China is an enormous “mobile-first” market and a key driver of mobile ad spending around the globe. China is the world’s largest e-commerce market, generating $1.7 trillion USD in sales per year. E-commerce will continue to increase, as less than half the country’s 1.4 billion people have made their first online purchase. Mobile commerce there is expected to grow at a compound annual growth rate of 12% to 2023, when it will be a $1.8 trillion USD market.

Five of the 10 largest Internet companies in the world in 2021 are in China. Mobile ad spending there reached $59 billion USD in 2019 and made up above 80% of China's digital ad revenue. It’s expected to hit $100 billion USD by 2023.

As for digital ad revenue in China, it grew 23% in 2020, despite the pandemic and the fact that the country’s average media spend dropped 15% between the first and third quarters.

Why is China’s mobile growth significant to marketers elsewhere? Marketers in other markets need to understand the influence China has on the global mobile advertising market. Large regulatory changes related to mobile advertising in China will likely affect U.S. tech companies.

Even more significantly, China’s domestic market is dominated by three giant companies (Alibaba, Baidu, and Tencent) and has strict government regulations. The country’s brands and startups, then, are taking more of their ad spend abroad, which will impact the mobile advertising industry as a whole.

#7: Consolidation - and more efficiency - for app developers

Consolidation, of course, is taking off in the ad tech world and will continue. Much of ad tech’s evolution in the last decade was due to an unbundling of the ad network. The fragmentation that resulted was good for ad tech, but the price was consumer privacy.

Now, we’re seeing the reverse of that fragmentation. And with consolidation, the winners are winning more than ever. Take Google, against whom it’s hard to compete as a newcomer. After all, the search market kept consolidating until it was just Google against hundreds of others. Once you’re winning, you just keep on winning more.

Advertisers also want to buy directly from publishers these days, instead of going through middlemen and affiliates. And the recent changes in tracking and privacy have made it harder for middlemen to compete, anyway. It’s forcing advertisers to buy directly.

We can expect 2022 to be another interesting year in the mobile ad industry. With changes due to digital privacy and protection, increased time spent on mobile, and other changing trends, marketers will need to pay close attention to keep ahead of their competition. 

Author

Matt Tubergen serves as the Executive Vice President of Digital Turbine Mediawhere he is responsible for overseeing all mobile media and campaign development, management and strategy for its 300 top brands and app clients. With more than 20 years’ experience in the mobile app ecosystem, he has pioneered mobile first strategies for 100’s of the top mobile properties. Previously he led mobile demand strategy as SVP & General Manager at Taptica. He has held senior management positions for American Greetings, THQ and Native X along with supporting multiple successful startups which he founded or co-founded. His background includes media acquisitions, mobile marketing and monetization strategies, product management and business development with partners spanning NFL to Disney.

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