The Existential Crisis for iOS Apps Today
Short term and long term strategies on how iOS app developers can navigate and survive Apple’s new tracking transparency changes
Lately, I’ve been getting lots of permissions asks from the apps on my phone. To allow tracking or to not allow tracking?
Starting with iOS 14.5 which went live in April, Apple requires app developers to receive the user’s permission to track them or access their device’s advertising identifier (IDFA). As an app developer, I know how critical it is to get users to pick the right answer when you ask for permissions. I’ve faced challenges with other permissions, like notifications, in the past. Once you get a dreaded no, there’s no easy way for the user to turn that back on in your app. They have to go to their phone settings and navigate through layers of menus to find your app and turn it back on. Face it, that just doesn’t happen and you’ve forever lost a channel of communication with your user.
It got me thinking: how many business models is Apple’s tracking transparency feature going to break? If you’re an app developer who relies on ad revenue as your business model or a marketer that relies on ad networks to reach prospects and grow your business, you must be freaking out right now! Marketers have already started to shift advertising dollars away from iOS in favor of Android and other channels. According to analysis from Consumer Acquisition, iOS advertisers are experiencing a 15% to 20% revenue drop and an increase in unattributed organic traffic. You are in the middle of a battlefield and what’s at stake is your survival.
In the long term, it’s clear that if your app’s primary business model is ad revenue, now is the time to revisit that business model. With the decline in advertising revenue, app developers should explore more direct monetization opportunities, where users pay to use the app. There are many different ways to offer in-app purchases — whether it’s a subscription that gets you full access to the app for a certain period of time, a purchase that unlocks certain product features forever, or currency that is used within the app. Venturebeat has noted that some savvy game developers have already started to incorporate more in-app purchases to find a new balance with in-app ads. In addition to direct monetization opportunities, you can also explore other non-advertising based indirect monetization opportunities, where revenue comes from other parties not the user.
For example, could you form a marketplace around your community and take a vig off of transactions that you help facilitate? If you need a structured approach to organize your business model ideation, I recommend checking out Business Model Generation.
In the short term, your job is to triage the situation at hand and make the best out of it. While you’re brainstorming, experimenting, and building out new business models, you need to buy time to live as long as you can. You can do this by optimizing your experience to get as many users to accept tracking as possible in the short term. While the vast majority of users are declining to be tracked, up to 33% of users are accepting tracking, according to Branch. Here are the best practices that I’ve seen to increase your chances of being in that lucky third.
DON’T: Pop up the dialog without any context
It seems like most apps have figured out that they should precede the Apple dialog with their own modal screen that explains why you should give them your data. Apple’s dialog box gives you a very limited text string that you can use to describe what tracking is used for. Putting up your own modal is your best and only opportunity to sell the user on why they should accept. Once the Apple dialog appears, your future is in the user’s hands.
Trivia Crack is a game that enables users to compete with friends or strangers to answer trivia questions correctly. They offer in-app purchases, but rely heavily on ads to generate revenue. Trivia Crack did not create their own explainer screen before popping up the iOS dialog box, so the only context that I had before making the decision on whether or not to allow tracking was, “We use this data to improve advertising, content and your overall experience.” What do you think I chose?
My answer: No. As a user, I’m not using the app because I want advertising. I’m using the app because I want to play the game. Telling me that the data will improve advertising is not motivating to me, and does not give me reason to believe that tracking will improve my overall experience.
DO: Tell your user what benefit they get out of being tracked
Unlike Trivia Crack, CNN told me exactly why I should agree to be tracked. Their description reads, “By selecting ‘Allow’, you allow CNN to serve you personalized ads which helps fund CNN’s journalism. Thank you!” What do you think I chose?
My answer: Yes. As a user, I’m using the app to read articles that CNN publishes. CNN connects the dots for me to let me know that journalism is funded with ads. Traditional newsrooms have struggled to adjust to digital and monetize with paywalls, and I’m ok with a little tracking so that I don’t have to pay out of pocket for journalism.
DO: Let your user know that this isn’t a forever decision
Being confronted with choices creates cognitive load. What do you do when you feel like you have to make a big decision? If you’re like most, you might feel confused or worn out from having to make a decision. And as a result, you try to delay the decision or pick the choice that feels less risky.
Twitter created a modal prior to Apple’s dialog box that provides users with context about tracking. Not only is there a link to learn more information, they make users feel like they’re in control by letting them know that “…you can always change this later in your device settings.” What do you think I chose?
My answer: Yes. As a user, I know that I’m not stuck with this choice forever. This lowers the stakes for me to say yes to tracking. Just knowing that I have the option to change my mind lowers my guard, even though we all know that almost nobody will navigate through multiple levels of setting menus to change their tracking selection for one app.
DO: Hone in on the reasons that are important to the users most likely to say yes
Not all of your users are equally likely to say yes to tracking. Just as you normally analyze your customer base in segments with unique user needs and value propositions, you should also take a user segment view when thinking about how to persuade users to accept tracking.
I believe that the group most likely to accept tracking is your most at-risk users — those that are somewhat indifferent and might churn. Here’s why.
As a consumer, the key drivers of my decision are how much I like an app and whether I am willing to pay or not.
For apps that I like and don’t mind paying for, it’s a simple decision to select no to tracking. I value the service of apps like Spotify enough to pay for a subscription.
For apps that I don’t really care about, it’s also a simple decision to select no tracking. Trivia Crack is a nice diversion at times, but if it truly went away, I would just move on to another distraction.
But right there in the middle — where I like the app but am not quite willing to pay — that’s the opportunity. In this case, I am faced with the Prisoner’s Dilemma. I know that saying no to tracking is better for me personally, but I understand that if everyone says no, then it will end up being worse off for me if I have to pay. For app developers, this group is most likely to be convinced. Like CNN, you should target them and tell them how ads will enable them to keep using the app without paying.
In the heat of the battle, you must live to fight another day in the short term, while you put together a game plan for the long term. To optimize your tracking opt-in rate, you have to put yourself in the shoes of your user and think about how accepting tracking benefits them. In the long run, you should explore new business models including direct and indirect monetization.
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