Will your business survive the elimination of the IDFA? Advertising without Apple’s proprietary advertising identifier for iOS devices will be a challenge, particularly to those businesses that are wholly reliant on user-level data and attribution. But there are workarounds. In episode #392, our host Peggy Anne Salz talks with Shamanth Rao, veteran growth marketer and CEO of RocketShip HQ, a full-service mobile user acquisition agency helping fast-growing apps grow faster. Game-changer or apocalypse? Shamanth weighs in on the impact and highlights some smart workarounds. His advice: find creative ways to incentivize users to register accounts using their email addresses and harness those identifiers for retargeting and lookalike lists.
These are tough questions, we get straight answers here on Mobile Presence and to tell you the truth, I’m just going to cut right to the chase here – when the news hit, I contacted our guest first thing because if anybody knows what this means, he does, right? He has written some amazing must-read blogs, a blow by blow account of what all this means and we’ll give you those later in the show notes as well, he’s connected with an impressive network of marketing experts who like himself are authorities on mobile and growth.
So our guest today, a veteran growth consultant who’s worked with a string of companies, now Founder and CEO of RocketShip HQ, that’s a top name agency that partners with fast-growing companies to help them grow faster, that’s what it’s all about, he’s helping his clients hit their growth and profitability goals, he’s here on Mobile Presence – Shamanth Rao, host of Mobile User Acquisition Show by the way, as well, so great having you here today.
SR Thank you for having me, Peggy, always a pleasure to talk to you, you ask very, very good questions so always an honor to be here with you.
PAS Awesome, and you’re also a host of your own show, we’ll maybe riff about that a little bit later because you’re talking to mobile user experts on your Mobile User Acquisition show. I mean, when this hit, what did you do, was it all of a sudden all of your guests and everybody you know just said, like, wow, you know, this is – yes, this is it, this is the apocalypse or what was the response there? Maybe you were even already doing your show when the news hit. What were you doing? It’s like that shot heard round the world, we’ll all remember it, I think.
SR Yes, it’s certainly a big milestone and certainly it’s the end of many things as we know it. However, I didn’t think the app economy is ending, it’s just that we’re going to be doing things differently and there are certain parts of the ecosystem, MMPs, DSPs, basically everybody that has been reliant thus far on device graphs which is basically based on the IDFA, they are going to have to basically adapt to the new way of doing this and there may or may not be a place for all of them in the new paradigm come September.
PAS So we’ll talk about, we’ll start with that because of course marketers will always find a workaround, right, but as you said, it’s really about the Martech adtech scene and I was reading your blog earlier, and as I said we’ll get to that, we’ll tell listeners how to check it out but Thomas Petite who has to be one of my favorites when it comes to just laying things on the line, you know, it’s just retargeting is going away, mobile DSPs are done, it’s over. If you were talking to the industry, would you agree with him – we’ll talk about the marketers in a moment but adtech, Martech, MMPs, is that done and dusted?
SR In that current form, yes, I think they’re done and dusted and we can talk about each of those components separately because they’re all very different. I would say MMPs in the current form are done and dusted, some of them have spoken about how they can be intermediaries, like SKR network which is Apple’s replacement for MMP versus Apple’s attribution solution which may very well happen, it’s just that they’re not going to be anywhere as valuable as they are in the current paradigm where they are basically the storekeepers and custodians of user-level data.
PAS So basically that’s done for them, we won’t have the single source of truth as they like to say, like they like to call the data they’re providing, so marketers are going to have to fill in the blanks, fill in the gaps. We’ll get to some of the impact on strategy, I just want to understand on the business. First of all when do you think it’s going to be important, when should a marketer start to think about workarounds and ways to navigate this, is this something that they have to put at the top of their agenda now because, again, it’s just a few weeks ago that it was announced, or is it something that it’s like, okay, it’s coming but not right now, I can deal with other problems first. How immediate is this?
SR I would say it is pretty mission-critical considering the changes will come around in September. I would say if a marketer is, I mean, the vast majority of people we advise, I advise, I have been advising them to learn and keep their eyes and ears open at this point of time, not necessarily make decisions because I don’t think parts of the market infrastructure are ready for decisions yet. I would say keep eyes and ears open, see what happens in September but start preparing now.
PAS It could be a show probably all alone by itself, you know, how do I prepare, what do I need to do, but let’s try this – let’s first start by being entirely on the same page, Shamanth, about what you think the biggest impact here is for mobile marketers. We talked about the ecosystem, they’ll have to think of a different game, particularly MMPs, marketers – is it just a matter of adapting and maybe focusing on a different aspect of marketing, you know, maybe retargeting is out the window, I don’t know. So, let’s start with what they need to focus on, what is the impact first? What is the most important impact of IDFA on their business right now?
SR Yes, the primary impact is that a lot of targeting capabilities that had worked in the past will not work in the future which means on Facebook you could run lookalikes based on purchasers that were passed via the IDFAs, you could build value-based lookalikes which were, you know, optimized for value which basically picked up the amount of transaction which would optimize for high revenue users because Facebook would know who the high revenue users are. That will no longer be possible in the future.
So, it’s just going to be hard for everybody to attain the results they’re attaining now but if you’re getting X% OS by seven days, it might just end up being X by two, you know, come September.
So I think what they can and should do is just have some value plans for a short-term decline, eventually medium to long-term things will shake up because this is going to impact all app developers, this is going to impact everybody so, you know, there’s going to be some amount of level setting that’s going to happen over a three, four, five-month period but immediate shorter impact is going to be performance is going to suffer because you cannot find high-value users on Facebook, on DSPs so your numbers are just going to look worse.
PAS But as you said, I mean, that is a plus in a way, you know, it hits everyone the same way, it reminds me of these movies that you watch, these horror movies or whatever, that’s what I do in my spare time, yes, where you have the protagonist but someone knocks out the lights, everyone’s in the dark, right? So no-one has the advantage and that’s a little bit what this is like, right, this is Silence of the Lambs meets marketing, maybe. What are you telling your clients because you are very focused on growth and you’re very good at what you do – I follow your work, I have high regard for it. Is there a shortcut, is there something that marketers can be doing that is going to help them maybe weather this is a bit better? We’re all going to be in the dark for a while, we’re not going to be able to optimize for a while but maybe there’s something you’re telling them, some sort of quick fix.
SR Yes, right, so, again, to the extent that they can mitigate some impact, there are a couple of things that I do recommend that they do. One is to start, continue to focus on collecting emails, email IDs, if they aren’t already doing that because if they don’t have email IDs, they have just no way to identify who their users are and obviously that can happen via a log-in screen or Facebook Connect of Facebook Opt-In. So I think that will at the very least help them have a different identifier for them to build lookalikes or just even identify who their best users are.
PAS Okay, so we’ve got email there. I do have to go to a break but that’s good, we have a cliffhanger, we continue the drama of this show, Shamanth, because, you know, we asked is it the end of the world as we know it, and now, listeners, you have to come back and hear about two more things you can do, two more shortcuts from Shamanth, but don’t go away, we’ll be right back after the break.
And we’re back to Mobile Presence. I’m Peggy Anne Salz, we have Shamanth Rao, host of the Mobile User Acquisition Show and also an amazing growth consultant and giving us the inside track on what you can do to make the best of IDFA. Right before the break we stopped at number one, we’ve got numbers two and three and we’ve got a captive audience, Shamanth. So what else beyond capturing data from emails can marketers do?
SR Because of the way, because getting lookalikes or more precise targeting is going to be extremely challenging without IDFAs in the future, I expect that the campaign construction will look more like WAC, where basically you upload creatives and let Google do its thing, you know? So I would anticipate that really Facebook might just take all targeting levers away and then you basically – the only lever left to you is creative, really just be prepared for a more creative focused marketing operation than you have right now.
So that’s number two in terms of what the future could look like and what I recommend people do. Number three is also because of the way SK ad network is configured, I won’t go too much into the weeds but there’s one conversion that can be tracked on SK ad network and really there’s a timer that resets every 24 hours after conversion happens. Essentially what that means for marketers is that they have – if they need to track a conversion on SK ad network, that conversion ideally has to happen within 24 hours, within 24 hours often it stops. If that doesn’t happen then they just get an install pin and they do not get a conversion and that’s a huge change compared to how things stand right now because right now, you know, if somebody makes a purchase three days after install, it gets picked up, but on the SK ad network anything over 24 hours just goes out the window.
So, something that marketers can do is to make sure that early monetization is as front-loaded as possible which unfortunately could also for some products result in just not very good user experience but that such it is. But broadly, you know, I do recommend that they think about front-loading their monetization at least to make the most of SK ad network as it stands right now.
PAS That’s a very interesting point, I wasn’t aware of that but if you think about it, that’s going to be really tough because I’ve looked at the research, I look at Liftoff reports quite a lot, for example, they always show the time to first action, you know, and it’s sometimes for some apps it’s under 24 hours but many, many cases you consider, you think about it, you don’t jump on it right way so that’s really going to make that extremely difficult. So what about the importance of other means of engagement and sort of continuing that interaction because it’s not going to be just like, hey, I’ve got the app, I'm doing stuff – it’s going to be sort of more, I don’t know, for lack of a better word, nurturing, and I’m hearing some thoughts out there, maybe it’s because they’re from companies who do engagement, who knows, but they’re saying it’s going to be more about engagement than activation. What do you say to that?
SR At aggregate level, it’s not going to be impacted nearly as much, the reengagement’s not going to be impacted nearly as much because it’s not reliant on, to my limited understanding, it’s not reliant as much on user values. You’re not necessarily, you know, to the extent that you’re like, oh, this one user made $200 purchasers, I’m going to bring them back – that typically doesn’t happen with emails and push notifications, at least in my experience and my understanding is that a lot of reactivation, re-engagement happens at an aggregate level.
So I don’t see that being impacted nearly as much. However, I think something you did touch upon which was retargeting, which is paid retargeting, that can and will definitely be impacted just because that happens primarily at the user level, right, you are basically saying, oh, this user paid $200 in the past, I will pay $100 to acquire them. That’s no longer going to be possible, you know, but, again, if you’re sending out emails, you say well, these are the users, these are the top thousand users or the most valuable – I don’t need to know who they specifically are, I’ll send emails to these guys and I think that may still be possible.
PAS So if I want to just translate that for a moment to what I’m trying to understand, is paid retargeting, I get it – that’s not going to happen but other types of retargeting, it’s almost going to like force mobile marketers to get rid of that prefix, in a way, I try not to even say mobile marketer anymore because you are sort of defacto multi-channel, you know, you are looking at email, you are looking at other ways to engage, you should be, period, no matter how great your mobile app is.
So, this is going to decrease paid retargeting, maybe increase efforts and focus on other ways to win back users or to keep them engaged – you just don’t want to lose them in the first place because paid retargeting isn’t going to work to get them back.
SR Yes, yes, yes, right, and I certainly would agree with that assessment just because – I do think companies will focus harder on re-engaging their existing users because acquisition, at least in the short term, is going to be much more challenging and eventually things will probably settle down.
PAS What are you seeing, because you’ve seen a lot and you’re talking to so many people, I’m just curious, just for a little bit of fun maybe, the most outrageous reaction you’ve heard to IDFA or maybe the most interesting or humorous, I mean, I’ve gone through a couple, you’ve documented a couple – you’re talking to a lot of people, I mean, is it really like the sky is falling down out there or are people measured in how they are reacting?
SR I think the most common reaction is the sky’s falling down, the end is near. I don’t fully subscribe to that just because I think a certain way of doing things is going to go away, it doesn’t mean the app economy is. I would say a lot of statements tend to be somewhat panic-driven and I think this is an opportunity just because apps are not going away, we are all going to have to reinvent and change the way we do things and I think that’s certainly an opportunity for very, very many parts of the mobile app ecosystem.
PAS How about yourself, I mean, just in a few words, I mean, you have a consultancy, you are helping companies grow, hit their targets – yes, it’s very UA-focused but probably you’re also going to be looking more at creatives and creative ways to help your clients. How are you going to shift what you offer?
SR You know, at this point of time, I think we are primarily watching and learning and I will say anybody who says they have perfect answers to what exactly they will do in September, I think they’re being disingenuous. So I would say just by watching and learning, but we have hypotheses for things that we can consider doing, some of which I talked about, focus more on collecting emails and building up a store of first-party data basically.
Focus more on creatives, assume that that is the only lever available to you, what would we do if creative was the only lever available to us, you know. And really continue to talk to people and learn and get a very, very good sense of what might happen. Understand intricacies of SK ad networks, it’s not very complicated, it’s not rocket science but that’s what everyone’s going to have to work with and deal with so that’s something I’m spending significant amounts of times understanding the nuances of. Really that’s what we’re doing, I don’t think any of that translates into a concrete strategic plan for September, I would say. Like I said, I don’t think anybody has that fleshed out just now.
PAS Well, I have to say a great segue, right, because you say talk to the industry, talk to people, learn from them, that’s why we have you on my show. But we do have to go to a break a final time, Shamanth, so listeners, don’t go away, we’ll be right back.
And we are back at Mobile Presence. I’m Peggy Anne Salz as always, Shamanth Rao is our guest today, Founder and CEO of RocketShip HQ and talking about IDFA, is it as bad as it sounds? Maybe not, we’ve heard a lot from you, Shamanth, but there’s another sort of drama going on here and I’d just love to have you weigh in on this because, you know, if you’re in the industry as we are, you just sort of love these rivalries and these stories. What is going on here, is there a war between Apple and Facebook? It’s almost like something you could see in Star Wars, is the Force going to be disrupted or something, planets exploding. Somebody’s up to something, you can almost feel that someone at Apple was looking at Facebook’s bottom line and said, you know what, we ought to be in on this because that’s certainly what it seems. But what do you think?
SR So yes, obviously a lot of Facebook’s revenue is from advertising, I think the last I checked it’s north of 97-98% is from advertising. What’s also true is Apple services revenue has been growing in the last couple of years and they need to make sure to sustain that. When I say services, that’s the App Store revenue, and it wouldn’t surprise me if they’re looking at Facebook and they’re saying, wow, this is really something that we could burrow into to buttress our services revenue. That’s certainly something that very well could have happened just because Apple needs to grow its services revenue. Apple’s hardware revenue which is way, way more substantial, I think it’s $250 something billion, I believe the services revenue is much, much smaller. It’s harder to grow, hardware revenue is harder to grow, services revenue, they see it as having more upside.
I will also say the other part of this dynamic is that Apple does not have a good track record of producing good adtech. I used i-Ad which was their advertising offering in 2013, 2014, it was terrible. Apple Search is very rudimentary, you know, it works because people don’t have alternatives but it’s very rudimentary compared to nearly every other adtech product I’ve used. So, I don’t know how well Apple can really build something to supplant Facebook or take away Facebook’s revenues but certainly I think this dynamic is fairly critical to what is happening lately.
PAS Yes, that was my feeling too, I remember i-Ad and I remember the blogs and just it was substandard and then everyone talking about Apple Search Ads. I mean, you just have to go over to a place like Mobile Dev Memo and just ask someone to weigh in and it’s not positive. So, that could very well be it. What about Google, it seems to be on the sidelines, sort of Google app UAC, I remember people complaining about that too but we all did fine – is it something where it’s one to watch, there’s going to be something changing in how Google does advertising? Have you given any thought to that, Shamanth, because of course you are a veteran, been there, done that, what are you thinking?
SR Yes, Google has been a follower in terms of privacy, right, so when Apple did the Lab Zero which, you know, for those who aren’t familiar about two years ago, Apple said, oh, we will let users – we don’t want be tracked and the IDFA is going to show as zero, Google followed a couple of months later, Google’s been a follower so I wouldn’t be surprised if Google went down this path, you know, in a couple of months or a year from now.
I would also say Google, because of the way UAC is structured right now, they’re less reliant on IDFA’s for targeting, for direct targeting, you don’t have anything like a lookalike but certainly in terms of the performance for their OS targeting or event optimization, it’s not going to – they’re going to be in a very similar boat as Facebook.
So I would say they will be impacted, I would say to a marginally lesser extent because they don’t have anything like lookalikes right now.
PAS So really it’s up to the marketer, probably up to you because you’ll be working with them, helping them and I’m sure that our listeners are going to want to keep up to date with you, maybe check out your blogs, check out your company – what’s the best place, Shamanth, because you’re all over the place actually but if I want to get in touch with you, maybe even say, hey, I would like your services, how would I do that, where would I go and where would I get the best view of your vast insights?
SR Yes, you know, thank you for the kind words, Peggy, and the vast insights really are from the people we talk to, you know, on the Mobile User Acquisition Show, it’s a mouthful but hopefully it’s somewhat intuitive, mobileuseracquisitionshow.com – go there and we have quite a few episodes lately on what’s unfolding at the IBFA, we had something today on how IBFA is impacting the programmatic space, so I think that’s the best place to follow really mobile user acquisition insights, mobile growth insights more from our guests and from myself.
And of course if they want to check out what we do, go to rocketshiphq.com, we have a post-idea fair reading list up there, I’ll have an updated version up potentially by later this week, so definitely that’s where they can find out more about how we work and what we do which could look very, very different in a couple of months. So, yes, we’re preparing to change our website.
PAS Well, that’s interesting, maybe I’ll have you back, in fact, I will have you back, Shamanth, because as you’re changing, I think that’s important because that means the market is changing and of course we have to keep everyone up to date on what’s going on there. You’re a great source of information and for that thank you so much for being on the show today and for sharing what you’re hearing and what you’re seeing out there, great to have you.
SR Absolutely, Peggy, always a pleasure to talk to you, honor to be on your show.
Thank you. And listeners, if you want to keep up with me throughout the week, find out more about how you can be a guest or sponsor on Mobile Presence, then you can email me, email@example.com, mobilegroove.com is where you can find my portfolio of content marketing and app marketing services and tons of articles about the app industry.
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