iOS 14.5 is perhaps the biggest change in the mobile ecosystem in a decade.
While most iPhone owners might not see that much change, for the first time they are getting a choice about whether they allow adtech companies and brands to track them around the internet. For the first five years of mobile, anyone who wanted it got our hard-coded UDID, or universal device identifiers. After about 2010, anyone who wanted got our IDFAs, or identifiers for advertisers. There was an opt-out, but few saw it.
Now, we’ll all be asked for permission to track, like GDPR cookie notifications on the web. In this episode of TechFirst with John Koetsier, App Annie CEO Ted Krantz and I chat about what that means for apps, companies, and people.
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(This transcript has been lightly edited for length and clarity.)
John Koetsier: Hello and welcome. Did you feel the disturbance in the force recently? I am not talking about May 4th — I’m talking about iOS 14.5, which is changing almost everything we know about mobile growth.
Today, I have a super special guest. I mostly record my TechFirst sessions now, because I edit them for YouTube and I want to add stuff and videos and make ’em cool. But this guest wanted to go live, and he is Ted Krantz. He’s the CEO of App Annie.
App Annie, of course, is a top source of mobile ecosystem analytics; it’s over a decade old right now. Can you believe that? And still no one knows who Annie is. Welcome, Ted!
Ted Krantz: Great to be here, John. Thanks for having me.
John Koetsier: So, Ted, we’re going to talk about a lot of stuff. It’s going to be fairly wide-ranging.
We’re going to get into iOS 14.5, who that’s good for, who that’s bad for. The rise of different types of publishers and platforms as a result of that. What’s changing in the industry, maybe super apps, all that stuff. Let’s start here: iOS 14.5 just hit. What are you seeing? How’s it impacted you? How are you seeing it hit the industry?
Ted Krantz: Yeah. So it sounds like an exciting action-packed session here with you.
iOS 14, you know, I’ll just have to get it out there — user attribution as we knew it is ostensibly canceled. It is an extremely disruptive time, and we’re looking at it from an opportunistic perspective, and trying to take on more than just mobile market data … take advantage of this opportunity.
John Koetsier: Cool. Cool. So we talked a little bit in the preamble here, who’s iOS 14.5 — who is that good for? Who is it bad for?
Ted Krantz: Well, I think it’s good for companies that want to look holistically at the entire equation in terms of optimizing to return on investment.
So what I think the landscape does is it changes pretty dramatically, John, in terms of the elimination of all these point solutions. It makes the opportunity ripe for consolidation, right?
Even notice in the Forbes Technology Council, the article that was published pretty recently on the demise of IDFA and the first-party data is under assault.
And so what we’re seeing is an opportunity to actually aggregate as much first-party data as we can, knowing that there’s limitations in terms of how deep you can go. Our focus is really trying to go wide, opportunistically. So I think for companies that are focused on going to a wider aggregation-type play, it’s going to be good for those companies.
John Koetsier: Interesting. Let’s dive into that, because I think what you’re getting at there is that if you have more properties and you’ve got more access to first-party data that you can collect across those properties, you have some level of control there, right?
But if you’re a connector, maybe the traditional ad tech type connector, and you relied on a technology like the IDFV to see devices as they passed around — maybe create a device graph, maybe understand value of different devices and therefore, of course, their users — that really changes, right? So the first-party data that you have, the more that you can get, I mean, that’s super, super valuable.
But that sort of second or third-party data is really more challenging to get, and maybe in some sense, it’s almost impossible. Correct?
Ted Krantz: Yeah, that’s interesting. I see it very much the same way. We do see the commoditization, right, of these first-party assets and trying to orchestrate across as many signals as we can, knowing that the signals are lighter than they used to be.
But what that does at the same time is it actually enhances and turns up the volume on market data in particular. Because those market data signals are going to be incredibly important to tune in collection with those first-party signals to really get accurate prescriptions and opportunities to execute as a result of synthesizing that dataset.
Now, what we’re excited about is we’re really putting ourselves out there to be the brain behind this, to turn into a unified data — your data and market data — and draw on the power of AI to help prescribe and execute outcomes.
John Koetsier: Well that’s hugely important for you, obviously, because you are not in most cases collecting personal data, right? You’re checking market data, ecosystem data, what’s going on on the big picture, and that’s super useful. It’s interesting if you look at it from the platform perspective, because if you saw the platforms, especially like Facebooks and others initially super resistant, initially super pushing back on where Apple was going with privacy in iOS. And in fact, taking out full page newspaper ads and other things like that.
And then you saw a bit of a change.
You saw a bit of a change from Mark Zuckerberg, probably about two months ago, where he said, ‘You know, we actually might do pretty well with this. We might actually come out ahead.’
Because guess what, if you can’t target people across different properties — because you can’t track them as well; you can’t measure that as well — then maybe the platforms that are super successful at aggregating data that’s first-party and then allowing targeting based on that, might do really, really well. And you might actually also want to monetize on platform there because you can do that with that data.
Ted Krantz: Yeah. Yeah, we see it the same way. I think the consolidation of what we would describe as these super ad networks, right, is really kind of what’s going on right now.
And you’ll be able to go deep on those individual ad networks, like AppLovin and picking up Adjust, as an example, or GameRefinery getting picked up by Vungle. So we see this combination of the ad network now picking up SaaS datasets, that’s really the catalyst to create the super ad network. And in those walled gardens you’re going to be able to go deep.
Now what the limitation that is obvious in that reality is that it makes marketing much more difficult from a programmatic perspective. You’re going to have to really try to figure out a way to tie the silos together. And that’s the play that we’re trying to go for, is to some extent supplement and complement what’s been lost as a result of IDFA — not necessarily replaced.
John Koetsier: Talk about that a little bit more because that — you just said something super interesting there. What I think you were getting at is that, look, as a marketer wanting to grow via mobile, which is the platform that connects everybody today, is the operating system of our lives in a lot of ways, and the operating system of our economy, really. If you’re using that, then IDFA used to tie all that together and you could see activity across a lot of things.
What you just said is now you’ve got to go deep in a silo, and that might be a Facebook; that might be a super ad network; that might be a different type of silo and you’ve got to connect that. Can you go a little deeper on that?
Ted Krantz: Yeah. I mean, I think it’s important to keep in mind too, when you’re showing the mobile device, we’re spending 4.2 hours on that device. 3.7 hours on television. So we actually live on this device and what we’re seeing is a result of the pandemic, and we see this as just a forcing function of moving us to the future faster at an accelerated rate — not some type of one-off event, but, you know, half the time is now on these social platforms as well.
So I do think these super ad networks trying to bring some view of transparency to those marketing opportunities on their platforms, that’s here to stay. But then that play, you know, us sitting on top trying to provide a portfolio-level view across digital, not just mobile. We did an acquisition of a company Libring that’s now our Ascend product that provides some of those first-party aggregated signals, DSP attribution, things like that, so that we can roll that data set up and then start trying to drive benchmarking indicators just like we do with downloads revenue, MAU and DAU with CPI and CPM.
John Koetsier: Mm-hmm. You talked a little bit about super publishers and the advent of super publishers, gaming companies, maybe other companies as well, gathering more assets. Talk about that evolution. What’s driving that and what you see in the future for that?
Ted Krantz: Yeah, that part’s super interesting from our perspective.
We actually see this phenomenon of super ad networks and super publishers, because, listen, gaming is on the rise. We see these two like coming toward a pretty epic battle.
And when you look at what’s going on with — no pun intended — when you see what’s going on with gaming, right, you can even look at what Zynga announced with the acquisition of Chartboost and adding ad monetization to their piece. So you’ve got the IP, you’ve got the publishing capabilities, you’ve got a platform play, you have an interactive immersive experience.
That’s competing directly from an eyeball perspective with TV. And so we see kind of this emergence of gaming companies really being the shining star for media and entertainment over the long term.
John Koetsier: Mm-hmm. What a change. I mean like, a gaming company, a gaming publisher acquiring an ad network. I wouldn’t have imagined this a number of years ago, maybe even not that long ago, right? Do you envision more of this happening?
Ted Krantz: Yeah, I think the more consolidation across the board is definitely what we anticipate. In fact, we’re embracing it. Our strategy to get to a unified data AI outcome and be the first to publish insights and outcomes in the cloud to solve for mobile and tomorrow digital, you know, that’s a bold vision and it definitely requires acquisitions to pull that off. And let’s just say right now there’s some interesting conversations going on in the market.
John Koetsier: Yeah, we see the — you mentioned the super ad networks as well, right? We saw Digital Turbine, Fyber, AdColony, couple other acquisitions that they’ve got going on there, and in essence, building their own platforms as well, right?
Ad tech has been really odd over the last decade, if you look at it. Ad tech has exploded. There’s been an explosion of innovation driven by granular data, data available and accessible in a lot of different places. And now, perhaps, we’re seeing a consolidation of that. Interesting times.
Ted Krantz: Yeah, without question. But again, I think everybody’s looking for differentiation. So if you can pick up some unique signals that allow marketing opportunities that are deeper, richer, more transparent, more clear line of sight to ROI — that’s going to be the differentiator, especially in a room that has largely gotten darker. So, that’s kind of the playing field the way we see it. We want to try to capture that and, like I said, enhance some visibility at a program level to offset some of those difficulties.
John Koetsier: Let’s dive into super apps. We’re talking about consolidation in apps and publishers. We’re talking about consolidation in ad tech. We’ve never really seen in the Western world, North America, even South America, Europe, we’ve never seen the super apps really that China’s had, the WeChats—
Ted Krantz: Yeah, yeah.
John Koetsier: —where you can live your life on WeChat: do your social, get your meal, book your ride, do your banking, and essentially live on the app. We haven’t seen that here, but we have seen that Facebook started connecting its properties closer together about a year or two ago in response to probably antitrust.
We also see that as IDFA goes away, being able to have a single user model between multiple functionalities can be more powerful. How do you see super apps? And do you see them coming in our neck of the woods?
Ted Krantz: Yeah, I think it’s an interesting discussion. We’ve been kind of watching this closely. You mentioned WeChat, I would say in terms of a couple different angles of defining it. Is it about a lifestyle experience, multiple dimensions of interaction that you’re again immersed in for long periods of time? WeChat definitely fits that definition.
What I think is interesting is there’s some emergence, especially with the acceleration of social platforms, of really high MAUs. And now can those companies — like a TikTok that’s at 1.2 billion MAU, which is crazy — can they expand the experience to become a little bit more of a pure lifestyle app? I think that’s going to be what’s interesting.
But in terms of super app lifestyle, I’m with you. It’s WeChat. You could argue Uber is there as well, they’ve really got a way that incorporates more of a lifestyle play.
But then after that, then you see these, you know, especially social platform players with massive MAUs really quickly — Clubhouse and some of the phenomenon there too. There’ll be more to come, but if those type of platforms can figure out a way to extend the value proposition into other categories that create a lifestyle experience, I think there’s going to be more that we add to the list.
John Koetsier: Super interesting to look at that. I think that Facebook has a good shot at that; they’ve always got Facebook Marketplace and a few other things that they’ve been adding slowly over time; they’ll add a social audio component. TikTok, I think will be a little more challenged to do that ’cause TikTok is like you go there when you need something to do, right, you need some fun for just a moment.
Ted Krantz: Right.
John Koetsier: Uber is an interesting callout there because, of course, you’ve got transportation, which we haven’t needed as much in the last 12 to 18 months.
Ted Krantz: True.
John Koetsier: But you’ve got UberEats, which we’ve needed more. And guess what, while I’m waiting for them to come maybe I can play a game… [laughter]
Ted Krantz: Yeah right.
John Koetsier: Could be something like that, hard to say. It is interesting to imagine as we look at the changes in iOS 14.5, and we assume that similar things are coming on Android as well. We see Google’s FLoC, Federated Learning of Cohorts—
Ted Krantz: For sure. Hundred percent.
John Koetsier: —other things like that. The secular trend is towards privacy. It is interesting to talk about. Is our experience in mobile going to change? Is it going to be less free stuff? Are we going to see, is gaming going to change because they can’t target the whales? Your thoughts on that?
Ted Krantz: Yeah, I mean, there’s a lot to unpack there.
I do think with the demise of SDKs and user behavior oriented paths that are deeply tailored from kind of a wants perspective on the consumer side that trade-off for privacy has abandoned some of that marketing that might be more warm and receptive to, I hate to say it, a little bit of let’s go back to the future. And it feels a little bit like television almost, it’s contextual targeting.
Right? It’s white lists, it’s by publisher, it’s by network. So we are in a reality where it is a bit more spray and pray again. And it’s going to be interesting to see from a consumer perspective how that’s handled, how that’s absorbed. Because that train has kind of left the station, and I do think there’ll be some loss of tailoring marketing to, you know, an experience that feels a little bit more like a path to purchase.
I do think the e-commerce players — we were talking a little bit about what’s happening on the digital marketing side — but e-comm is really hot. It’s like shooting fish in a barrel from a return perspective, because you’re down the funnel like never before. And I do think there’s an opportunistic play there too with e-commerce we’re looking at that we’re not really sure our role there yet. But, again, I do think there’ll be pockets where it can be a bit more tailored for the consumer, but largely speaking, it’s going to be more of marketing as an annoyance.
John Koetsier: [laughing] Yeah could be, absolutely. E-comm and retail is super interesting. We’ve seen that grow massively and I don’t think that change has stopped as we start to kind of reopen and we’re getting our shots, other things like that.
You brought up a very interesting point and I don’t know if we need to go any deeper, but mobile development has fundamentally changed on iOS in the last six to eight months, because you’re really scared to add a lot of different APIs and SDKs in your app.
Ted Krantz: Yeah.
John Koetsier: You mentioned SDKs and, you know, you’re kind of responsible for that. And we’ve seen in the past year, 18 months where you’ve added an SDK and guess what, there was an insecurity there or it was even a fraudulent SDK that was doing bad things, and people have had their apps, their wrists slapped or worse, as a result.
Ted Krantz: Yes.
John Koetsier: Now with the privacy focus, you’re responsible for the code that’s in your app. And if you don’t know what’s in that SDK, whoa, you’ve got some potential real issues.
Ted Krantz: No doubt. I think we’re actually fortunate in some what of a twist of fate as a market data provider in that we’ve never really used the first-party data, so GDPR/CCPA compliance is a no-brainer for us. We’re super clean and compliant on that angle. Some of the other first-party players are going to continue to struggle with that. We don’t use SDKs as well. Now what we’ve gotten as a result of that though, John, is really an advancement of our capabilities with AI.
John Koetsier: Yeah.
Ted Krantz: So scarcity helped force some innovation for us. What we do to cover the whole curve based on a high quality panel, not just a relentless pursuit of quantity at a panel level, and then use AI to not only publish historical estimates, but move to prediction, which we’ve done with the release of our mobile app — I don’t know if you’ve checked it out, but if you haven’t, check out App Annie Pulse — it’s an executive view into app performance and it’s using predictive qualities to assess your performance score much like an Experian or a FICO score. And now what we’re going to do moving forward is move from prediction to prescription, start prescribing based on unified dataset, some limited first-party data views, market data views, and suggesting what you should actually do as a result of those datasets.
John Koetsier: Wow. This is interesting, because I have seen the news — I have not experienced it; I haven’t checked it out personally — but this is interesting because it kind of ties with where I wanted to go.
App Annie’s always been kind of the top ecosystem view, ecosystem analytics, what’s going on with mobile. And as mobile, as we talked about earlier, has become more central in our lives and our economies, that’s a really kind of cool bird’s-eye view of what’s happening and what’s going on. Now you’re taking those big-picture insights and you’re drilling them down to my specific app and letting me know, hey, I should be doing this, or I should be doing that?
Ted Krantz: Yes. Yeah, I mean ultimately, like I said, we want to be the first SaaS provider in the cloud to solve for insights and outcomes, not just on mobile as we do today, but bet on us for digital in the future. And what that will require is a broader ecosystem than we’ve had before. We’ll continue to make investments on the product side, but M&A considerations and ecosystem are going to play a big part in terms of the orchestration of our strategy.
And what’s also interesting is that given some of the limitations with first-party under fire, the importance of market data, the imperative that it plays in terms of really being able to make great decisions on what to do, the bar is only going higher in terms of the importance of market data source, so we’re super excited about that. The other trend that we didn’t talk about that I think is interesting too, ’cause we talked a little bit about back to the future, but I also think zero-party plays a role too … survey-based forms, you know, capturing data that way is another angle that I think will actually become more in vogue too.
John Koetsier: Do you know what is super interesting — total different track that we’re going on — but what’s super interesting, I’ve talked to a number of CMOs, mobile brand CMOs over the past, I’d say six months, that have said the same thing, that they’ve actually gotten tremendously valuable data by — get this, high tech coming here — asking their customers. [laughing]
Ted Krantz: Yeah, exactly. Right. Yeah, imagine that.
John Koetsier: Exactly. Asking their customers, you know, ‘How did you find this?’ Look, I mean, five years ago we would have laughed in mobile if we’d said, ‘Oh, pop up a survey in your app: how did you find this?’
Ted Krantz: So true.
John Koetsier: And it’s like, we know! We know where you saw the ad. We know where you clicked on it. We know when you installed it. We know when your last session was. We know when you dropped us for like three weeks like a hot potato and you hated us. We know when we re-engaged you and you saw that ad and you clicked on it and you went back in there. We would think you’re an idiot.
But I’ve heard multiple of these CMOs, and they’re also ones who deal with cross-device and cross-platform journeys, say this is super helpful. Now it’s not deterministic. It’s not a hundred percent accurate in every case, ’cause guess what, would you really know how in every case you saw something? Sometimes we don’t even notice when we get marketed to, right?
Ted Krantz: Yeah.
John Koetsier: And it’s the accumulation, slow accumulation of some brand, imagery, and ads that overcome us over time. But these CMOs are saying, ‘This is super valuable and it’s actually governed where I’ve sent my spending.”
Ted Krantz: Yeah. Well, the reality too, I mean, to make world-class decisions, John, you know you put yourself in a brand or a publisher position, you’ve got all these first-party datasets that are all disparate. You’ve got spreadsheets all over the place. Right? You’ve got agencies involved. You’ve got, in most cases for world-class mobile decisions, you have big data science teams.
What we’re on a path to do is democratize data science, take it away from these big in-house teams and start relying upon us to trust for insights and outcomes, and minimize the complexity of these data sources, and the agencies and manual intervention that’s all over the enterprise. That’s a massive unsolved arena in the enterprise, maybe the last big, messy, manual part of the enterprise yet unsolved. And so that’s what we’re seeking to solve and become the next cloud player that’s really using AI.
Because most of the advertising plays out there, even the big cloud providers are not really driving much from an AI perspective. We’ve got a great deal of experience there and we think we can do more.
John Koetsier: Well, I love it because that is a huge need. You see the companies that are super successful in mobile, and there’s a limited amount of talent that’s available there.
Ted Krantz: Right.
John Koetsier: There’s also a very significant budget if you’re going to buy all the tools and buy all the expertise that you need to interpret the data, bring it together and everything like that. There’s a limited number of companies that are really super successful there. And there’s a vast array of brands and small startups and large enterprises that aren’t necessarily in all cases, either mobile-first or they’re not large and well-funded, that need great insights. So, interesting. Ted, this has been a lot of fun. It’s been interesting. It’s been relevant. Any last thoughts?
Ted Krantz: No, thank you for the opportunity, John. I loved the conversation. Like I said, we’re excited to set course as the first unified data AI company out there, take on this big challenge. It’s not for the faint of heart. And if you haven’t checked out App Annie Pulse, please do, it’s something that we spent a great deal of time on. I know there’s a number of executives that have participated today, but it’s a great way to get a taste of the data and be able to interact with it daily without necessarily a power user view. So, thank you for the time.
John Koetsier: Excellent. Have a wonderful day!
Ted Krantz: Thanks, John.
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