Mobile measurement firm AppsFlyer said Facebook held the No. 1 spot in mobile advertising, followed by Google and Unity Ads in the first half of 2020, according to the company’s biannual Performance Index study.
This is the 11th edition of AppsFlyer’s index. While Facebook is at the top overall across both iOS and Android, both Facebook and Google dominate mobile advertising with a significant majority of the non-organic install market, or downloads that are driven by advertising. And while Facebook is stronger on iOS and in North America, Google is leading on Android, which is growing in emerging markets.
“We have seen Facebook emerge as a clear leader in quality and monetization,” AppsFlyer head of mobile insights Shani Rosenfelder said in an interview with VentureBeat. “A few years ago, Facebook was dominating the Performance Index. In 2018, Google started Universal Ad Campaigns and took the No. 1 spot in 2019. With our new monetization index, Facebook again captures the No. 1 position.”
The rankings are important because they can help mobile app and game developers decide who to partner with for mobile advertising, which is at the core of mobile monetization. In the first half of 2020, AppsFlyer examined 495 media networks and 27 billion app installs across 14,000 apps and 58 billion app opens.
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The Performance Index includes two new granular monetization-driven rankings per region and category. The new rankings rate media sources by their ability to deliver users with the highest likelihood of completing an in-app purchase and their ability to deliver users who monetize best with ads. These are vital pieces of information in freemium-driven ecosystems where apps make money primarily through in-app purchases and in-app ads.
With the existing retention, remarketing, and growth indices, the new study provides a more complete report card on the mobile media landscape across multiple marketing activities, Rosenfelder said.
Facebook’s ability to drive performance at scale in both the Retention Index and the new IAP (in-app purchase) Index propelled the company’s ranking forward. Facebook also dominates the new IAA (in-app advertising) Index, as well as the Remarketing Index, making its overall position clear.
But high-quality installs come at a cost, Rosenfelder said. Facebook tends to charge more, and this is especially true in gaming, where cost is significantly higher in North America, Latin America, and Europe. Google has slightly higher prices in the Asia Pacific region.
Above: The big players in mobile advertising.
Google is more costly in non-gaming app advertising — though not by a wide margin — with the exception of North America, where Facebook is more expensive.
Unity Ads is rising
Unity Ads has emerged as the leader in the next tier of mobile game advertising. This includes IronSource and AppLovin, both of which have started making their own games. Unity, which went public recently, is focused on ad monetization and on building a game engine.
Unity Ads rose in the Retention Index, thanks to a significant jump in scale, although its quality is the lowest among the top three. Unity Ads took over the No. 1 ranking in the fast-growing hypercasual and arcade markets, and it took third place in nine of 14 genres.
“Within gaming, we see Unity Ads as strong,” Rosenfelder said. “Unity had massive growth and scale. They have a long tail with indie game developers using their engine. So they have an advantage.”
Unity revenue executive Julie Shumaker said in an interview with GamesBeat that user acquisition has become critical to game developers with such crowded app stores. Unity Ads produces 22.9 billion monthly global ad impressions, reaching 2 billion monthly active end users worldwide.
IronSource and Applovin are also competitive in the game sector. But Facebook and Google are stronger outside of games.
While the novel coronavirus has had a significant impact on apps and the entire ecosystem, its impact on media source rankings was marginal. The only exception was Apple Search Ads, where organic growth in the App Store led marketers to start and/or increase their app store optimization efforts. This brought Apple Search Ads to the front, driving impressive growth and strong performance.
“The pandemic changed the mobile ecosystem, as all of the metrics spiked,” Rosenfelder said. “But the rankings of media sources did not change.”
The future is uncertain
Rosenfelder said Apple’s decision to curb targeted advertising on iOS in the name of privacy has made the mobile ad market uncertain. Apple has decided to deprecate the Identifier for Advertisers (IDFA), which is needed to link anonymized user data to advertising results. Facebook and Google could suffer if they aren’t able to target users with ads based on past behavior.
Apple has only said it is acting to protect privacy. But some in the industry believe Apple wants to undermine advertising revenues from Facebook and Google and take some of that back by boosting its own Apple Search Ads. This might allow it to generate more revenue through App Store sales, where it gets a 30% cut. Ad-related downloads on Facebook are probably 15 to 25 times bigger than Apple Search Ads, particularly in gaming, as people spend far more time on Facebook than on the App Store.
In the face of widespread uncertainty, Rosenfelder predicted a trend toward consolidation, such as we saw yesterday with Vungle’s acquisition of mobile ad marketing intelligence firm AlgoLift.
“With IDFA, there are a lot of unknowns,” he said. “It’s very difficult to predict. Maybe Apple will change its original plan. We just don’t know. The bottom line is if there is a change on iOS, it would affect many players.”