A mobile gaming company buys an ad network.
An ad network buys a marketing measurement company.
Ad networks buy app development companies.
And the consolidation just keeps coming in mobile.
According to App Annie CEO Ted Krantz, iOS 14.5 is driving a lot of the sweeping change in the mobile ecosystem, because it changes the game in terms of what data you can collect and what data you can see.
“What I think the landscape does is it changes pretty dramatically … in terms of the elimination of all these point solutions,” Krantz told me in a recent episode of the TechFirst podcast. “It makes the opportunity ripe for consolidation.”
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The first implication of iOS 14.5?
One: First-party data wins.
“What we’re seeing is an opportunity to actually aggregate as much first-party data as we can,” Krantz told me.
The mechanism here is simple: iOS 14.5 makes data about mobile users much less available. As I wrote a few weeks ago, the moats around the castles of big tech just got taller. iOS 14.5 makes personal, private data and metadata much harder to get, store, and share, and that means platforms with a lot of first-party data get more valuable, but connectors who rely on siphoning data from momentary touches on devices all around the internet are significantly impaired.
That fuels the second implication of iOS 14.5.
Two: Consolidators win.
“I think the consolidation of what we would describe as these super ad networks … is really kind of what’s going on right now,” Krantz says. “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.”
Listen to the interview behind this story:
In other words, if you’re not a platform or you’re not a walled garden — in other words, you’re not a destination for hundreds of millions of consumers who use your services and trust you with their personal data — you need to built your own castle.
And that’s driving a wave of consolidation across the industry.
The same prime mover — an impetus to privacy that is shutting down data aggregators — is also powering the third major change: the demise of SDKs.
Three: SDKs lose.
The mobile industry is built on SDKs: software development kits that contain code that you can insert into your app. That allows you to offer functionality to users or customers that you don’t have to built. Google’s Firebase, for example, helps app developers build, monitor, and market their apps. Facebook’s SDK allows you to offer social login services.
The problem is that in a new privacy-focused era, you are responsible for all the code in your app … including code from SDKs.
In April, that meant Apple rejected app updates with an SDK that, according to Apple, violated users’ privacy. In August last year, an allegedly malicious SDK focused on ad fraud that caused problems for 1,200 apps.
The result: mobile app publishers are becoming more and more careful about which SDKs they allow into their apps.
Four: “super apps win.”
Super apps are a particularly Chinese phenomenon exemplified in apps like WeChat which combine social networking, payments, shopping, messaging, banking, ride-sharing, and much more in a single app. Western market have previously seen the opposite impulse: separating apps down to the smallest possible amount of functionality.
A good example is Layout from Instagram.
Instead of being able to make collages of your photos in the Instagram app where your photos actually live — that would be way too simple and easy — Instagram wants you to download a whole separate app just to arrange the photos you’ve already uploaded to Instagram in new ways.
However, now we are starting to see signs that this is reversing. Uber is an example, Krantz says, in that it’s starting to incorporate more of a lifestyle play. Other apps that grow huge audiences — Krantz mentions TikTok — also have the potential to do more inside the app. (And TikTok is indeed bringing commerce functionality to its app.)
The simple fact: user data is first-party data once you’re in an app. Not having to share it with other apps in order to sell product or enable social networking or other functionality means that all the data stays inside.
In iOS 14.5, that’s now a major positive.
Five: more power to market signals and aggregate data
If personal data is more rare, harder to come by, and less likely to be shared, ecosystem data might just become more valuable, Krantz reasons.
“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,” Krantz says.
That of course plays into App Annie’s hands, because it’s always been about big aggregated data on installs, penetration, usage, and spend, without the messy implications of personal data. Now App Annie is instrumenting that with AI to help mobile publishers understand ecosystem data as well as their own first-party data to help them grow faster.
And, of course, manoeuvring in a changing mobile landscape to position itself well also.