This final prediction of 2021 is written by Eric Benjamin Seufert. Eric is a media strategist, quantitative marketer, and author who has spent his career working for transformative consumer technology and media companies. Eric is the author of the book Freemium Economics and the founder of Mobile Dev Memo, the ultimate growth blog and podcast.

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It is tempting for mobile games marketing teams to think of 2021 as being dominated by Apple’s impending new privacy policy for iOS, App Tracking Transparency (ATT). While many teams will spend much of the year working on post-IDFA transformation plans, other secular trends within the gaming and, broadly, mobile create circumstances that -- perhaps in concert with IDFA deprecation -- can provide a real opportunity to developers.

But given the degree to which speculation about IDFA has dominated discussions about mobile games marketing since June, before jumping into the substantive predictions for the year, it makes sense to commence the piece with a set of machine-gun hypotheses around the direct impacts on mobile games advertisers of IDFA deprecation. These points are informed by my research into the topic and conversations I’ve had with platform operators and gaming and ad tech executives:

When will ATT be made mandatory? It’s important to recognize what exactly ATT is: iOS14 launched back in September, but Apple delayed the rollout of ATT until “early 2021.” ATT is the privacy framework that prevents developers from using various pieces of user data for the purposes of targeting ads to those users. ATT is exposed to a user with a pop-up dialogue that asks them if they consent to “tracking” or not: if the user does not opt-in, their IDFA is inaccessible by the developer, but the developer is also bound by various restrictions around how that user’s data can be used for ad targeting. ATT is expected to be made mandatory by Apple at the end of Q1 2021.

What will be ATT’s general impact on CPMs? I expect CPMs to drop dramatically, especially in the first month or two after ATT has been made mandatory since many advertisers will reduce their ad spend dramatically in order to gauge the impact of ATT on various ad platforms’ targeting (and thus their LTV and ROAS models). Background on how ATT will change the way that ad platforms can target users can be found in this post and this post.

Will CPMs fall enough to offset the impact on CPIs for most advertisers? Possibly, for some advertisers. But as I point out in this post, a general decrease in CPMs is a symptom of decreased ad targeting relevancy, which will create an existential problem for some advertisers and simply cause others to reduce ad spend with a step change. So while it’s true that reduced CPMs may present an opportunity for some advertisers to increase ad spend -- namely, those promoting very broadly appealing products -- for others, it’s a knock-on effect of the precision targeting that they rely on for growth being crippled.

Will advertisers face more difficulty in acquiring new users or re-targeting / re-engaging existing users with the deprecation of the IDFA? Re-targeting will become very difficult as few identifiers can be as precisely associated with a device as the IDFA. Of course, acquisition will become more difficult for many advertisers, too.

Have any credible workarounds or loopholes been developed by advertisers or ad tech companies to replace the IDFA with an identifier or set of identifiers? Not really. This article explains why fingerprinting is probably not a viable identity solution, and this article gives background as to why other identifiers -- such as email -- won’t be useful to ad networks in aggregating user profiles.

Is the F2P business model at risk? Not likely, but some implementations of the F2P model -- especially those that are only viable because of profile-centric, device-based targeting -- may become unworkable.

Which game genres are more at risk? I think that games at the extreme ends of the monetization spectrum will find it hard to operate in the IDFA-less environment. Niche games that depend on extreme monetization from some minority of highly-engaged users will have a hard time acquiring users efficiently. And games that monetize exclusively through advertising will no longer become useful as “whale hunting” zones and may see their ad CPMs decrease dramatically.

Will Google follow Apple’s lead? I believe that Google will implement a solution that revokes access to the Android advertising identifier, the GAID, from the developer while still preserving access by ad platforms. More thoughts in this post.

With the short-form speculation out of the way, I extend the analysis to three fundamental changes that I believe will take root for mobile games marketing over the course of 2021.

Prediction #1 Resurgence of IP Licensing Deals

IP Licensing and IP placement deals ran rampant in the 2013-2015 era of mobile gaming when user acquisition first became competitive as the initial fervor for F2P games tapered off and device sales growth started to slow. This period brought Kim Kardashian: Hollywood and Marvel Contest of Champions to market and saw Kate Upton become the face of MZ’s Game of War: Fire Age. IP licensing became popular in this cycle because, in some (many) cases, popular IP materially improved top-of-funnel user acquisition metrics: potential players saw a familiar face or franchise and more readily clicked on ads and installed those games. 

It seems likely that a resurgence of IP licensing deals may occur in 2021. There are a number of reasons for this: first, ATT will handicap ad platforms’ abilities to target specific users, and an IP that is well-aligned with a core gameplay mechanic may provide useful in effortlessly segmenting audiences across taste and interest boundaries. 

But I think another reason that IP licensing deals may accelerate over 2021 is that entertainment companies are desperate to work with game developers: the gaming sector flourished during the COVID-19 pandemic and many analysts believe that gaming engagement will remain elevated as the world (hopefully) reverts to pre-COVID normalcy over the course of 2021. Entertainment companies see lucrative opportunities in mobile games to breathe new life into -- and extract money from -- dormant brands that nonetheless benefit from considerable recognition.

Additionally, I believe that the “Streaming Wars,” having heated up substantially over the course of 2019-2020 with every major entertainment interest launching its own OTT platform, will see gaming becoming an important part of the engagement battleground. I believe branded games will become more popular as a means of retaining brand recall and pertinence between seasons and film releases, and I also think 2021 may be the year that real content integration is achieved between streaming series and co-branded, standalone games.

Prediction #2 Resurrection of Product Marketing

Facebook, Google, and a handful of other advertising platforms -- facilitated by the IDFA -- served as the brand marketing function for most mobile game developers. A developer could launch a game without giving much thought to what audience it served because Facebook and Google, through brute-force behavioral profiling, could simply find the most relevant users for the product through ad campaign optimization.

That dynamic will not exist once ATT is made mandatory, and I believe it means that game studios will need to re-acquaint themselves with Product Marketing: the practice of cultivating and accommodating a product’s target audience segments through feature and content development. In other words: building a product to reach an audience and not the other way around.

I recently gave a presentation on how rapid prototyping and audience development will be used in the post-IDFA mobile gaming environment to “wag the dog” in terms of building scale for mobile games. I think this will manifest within studios in a number of ways:

• Firstly, teams will get even more analytical as the audience relevance examination that had previously been outsourced to Facebook and Google is internalized. Much of the analysis that user acquisition teams did in the 2016-2020 era of mobile gaming revolved around LTV estimations and cross-group mean performance values for metrics that were derived within targeting constraints set by the ad platforms. Now, the audience definitions are dynamic, which creates an especially acute challenge in comparing groups and optimizing spend;

• Teams will need to rely on more than just creative performance to understand which audiences are most scalable and receptive to the product. For most studios, this will require substantially increasing the size and scope of market research functions. Tools like SensorTower, 12traits, Geeklab, and perhaps even market data reports from firms like Nielsen will become increasingly important in the design and marketing of mobile games;

• Many studios will crowd into the middle of the gaming market, away from the monetization extremes and niche territory that dominated the grossing and downloaded charts in 2020. Games will progressively pursue broader and less specific audiences, which will require wholly new aesthetic design skills for some developers. Can every developer build games that cultivate comfort with a wide range of player profiles? This is a skill that few developers possess.
  

Prediction #3 Broadening of Media Mixes

Dovetailing with the second point, as developers build games for broader and more amorphous audiences, they’ll be able to utilize channels outside of the narrow scope of the mobile direct response to reach them efficiently. This means buying media in places that traditionally have not performed well for mobile games, especially mobile games that aren’t already scaled, like print, radio, OOH, and other formats.

Given that even mobile direct response ads will lose their definitive measurement property with ATT -- or, as I have argued, never were definitively measurable in the first place -- it makes sense that advertisers would expand their channel mix beyond direct response ads in 2021. But this is no simple task: it requires building new measurement frameworks like Media Mix Models and incrementality measurement models that can accommodate a variety of channel formats. This is again an analytical exercise that is likely beyond what most mobile gaming studios are capable of achieving internally, and so the user acquisition teams that are best able to staff this capability are those that will achieve competitive advantage in this new environment.

Stand by to Get Some

ATT will undoubtedly change the composition of mobile studios and their operating imperatives for 2021. But other macro factors will likewise influence mobile games marketing, and it’s important to not be singularly focused on addressing ATT when planning for the coming year.  The decline of one channel and one way of working will open up opportunities for teams who are looking forward instead of clinging to the past.

Mobile gaming user acquisition teams are currently becoming intimately familiar with SKAdNetwork and conversion value management, but they shouldn’t lose sight of the forest for the trees in 2021. Any disruptive change creates untold opportunity: mobile games marketing teams should look for ways to develop a real, defensible competitive advantage in this volatile period.

I have been asked by a number of advertisers to re-launch the How to Build and Scale successful apps without the IDFA workshop series I delivered over the course of August. Given the demand, I have decided to run a limited workshop series called Understanding and preparing for AppTrackingTransparency in iOS 14 as a sort of sequel to the original workshop. In this workshop, I’ll provide a high-level overview of what is being introduced with AppTrackingTransparency, what developers need to do to comply with AppTrackingTransparency, and how marketing optimization and measurement will change once AppTrackingTransparency is made mandatory by Apple (expected in late March).

Additionally, the workshop will provide clear guidance for how advertisers can:

• Update their marketing analytics and reporting to best adapt to the new, AppTrackingTransparency environment;

• Re-organize their ad creative strategy to best resonate in the new ad targeting paradigm;

• Utilize first-party data for internal use (and not as a means of doing external ad targeting or profiling with third parties) to optimize product monetization and retention.

Attendees will leave the workshop with a complete understanding of the privacy changes being introduced with ATT in iOS14 and how they can adapt their marketing and product operations to mitigate these changes.