Does digital advertising create demand? Or does it simply route existing demand to the destination of greatest monetary impact? Some thoughts in this thread (1/X)
2/ In this article, I posit that digital advertising primarily exists to pair users with the products for which they have previously exhibited some affinity. Digital advertising is mostly an exercise in profiling and prediction, not in aspiration mobiledevmemo.com/does-advertisi…
3/ This is apparent in the way that big ad platforms do targeting: they segment users by previous behaviors, which are signals of existing demand. If this wasn't the case, then eg. IDFA deprecation wouldn't be problematic: if ads created demand, behavioral profiles wouldnt matter
4/ But the direct response nature of digital advertising means that immediate measurability creates a monetization feedback loop that is paramount to any assumptions or anecdotes that the advertiser might have in targeting an audience
5/ Brand marketers sometimes bristle at this dynamic because it puts a natural constraint on their field of vision. We don't need to "guess" at who our audience is if we can quickly and efficiently establish its boundaries with ad conversions mobiledevmemo.com/the-uncomforta…
6/ And of course it's true that new products get launched all the time for which no existing demand exists; users need to be educated on value propositions (think Uber: did demand for on-demand car service exist in the formal sense before the concept was proven?)
7/ But the vast majority of digital ad spend isn't dedicated to exploration, it's dedicated to exploitation, as ad systems are built on Bayesian feedback loops. The bulk of advertising revenue is pointed at demand fulfillment, not creation
8/ And thus we get to Facebook and Google, which have become the pre-eminent digital demand fulfillment services, front-running organic discovery by efficiently pairing users with the products w/ which they'll monetize to the greatest possible extent. That's what an auction does.
9/ So if digital ads dont create demand but optimally route it to highest-monetizing destination, what happens when ads cant front-run organic discovery in the post-IDFA world? A common hypothesis is that Apple's services revenues drop
10/ Digital ads are run on very tight margins. Lower efficiency = lower ad spend = lower app revenue = lower Apple 30% cut. mobiledevmemo.com/what-happens-t…
11/ But demand doesn't go away with ads inefficiency because demand isnt created by advertising. If ads efficiency drops by 50%, revenue doesnt correspondingly drop by 50%: ads efficiency only produces marginal increase on the baseline revenue produced through organic discovery.
12/ Meanwhile: Apple regains editorial control of App Store, and perhaps its ASA ad network becomes more attractive. The net impact to Apple is not negative. Apple loses some platform fee revenue because monetization optimization isnt core focus of discovery anymore. But not all.
• • •
Missing some Tweet in this thread? You can try to
force a refresh
The black box inside the black box: Google announced yesterday the availability of its Generative AI-based creative tools in Performance Max campaigns. What considerations should marketing teams make in expanding total campaign automation to creative production? (1/X)
2/ First, dispelling two myths. The first: marketing teams view Generative AI as a novelty or a toy that is not yet practically useful. This simply isn't true: I've seen marketing teams that have radically improved their workflow with Generative AI tools already.
3/ Second, wholly automated campaign optimization tools like Advantage+ and PMax are naturally hostile to advertiser goals. This isn't true, either. These tools can present competing incentives, but many advertisers benefit materially from their use. mobiledevmemo.com/google-pmax-me…
The control exerted by Apple & Google over the consumer internet is often expressed in terms of content discovery / distribution & payments. But a more subtle and esoteric form of control is emerging: advertising attribution. (1/X)
2/ Both Apple & Google have launched native advertising attribution frameworks for their mobile platforms & browsers. These dictate how and, crucially, how accurately digital advertising can be evaluated, based on rules set by these companies.
3/ These frameworks have been introduced alongside, or as components of, privacy policies that were authored by the platforms themselves. Moreover, it seems that the platforms' privacy restrictions don't consistently apply to their own advertising products.
Meta announced changes to its Aggregated Event Measurement (AEM) protocol this May. Meta introduced AEM a few months after Apple revealed (but before it rolled out) the App Tracking Transparency (ATT) privacy policy. (1/X)
2/ AEM was initially modeled on Private Click Measurement, Apple's own privacy-focused attribution framework for web-to-web and web-to-app advertising campaigns. Meta stated as much in an early version of its documentation for AEM.
3/ But I noted when Meta first announced the changes coming to AEM that the reference to PCM had been removed from its documentation. I interpreted this as meaning that AEM would no longer be tethered to the PCM design imperative.
Yesterday, The Verge reported that Meta will introduce a direct-to-install advertising product on Android in the EU once the DMA goes into effect next year. Some thoughts on the efficacy of such a product and its impact. (1/X)
2/ First, I believe the DMA will be systemically disruptive (in the EU). It has broad implications for all "gatekeepers" / large platform operators, not just on mobile. To my mind, the DMA represents a fundamental reset on competition in consumer tech. mobiledevmemo.com/a-deep-dive-on…
3/ Meta says that its ad product will allow consumers to install apps on Android directly from an ad click, sidestepping the intermediate step of visiting Google Play. This has the potential to meaningfully improve conversion rates (and thus decrease acquisition costs).
Yesterday, Apple announced its new Privacy Manifests feature, which takes direct aim at device fingerprinting on iOS. Privacy Manifests will hold SDK publishers and app developers accountable for how user data is collected and utilized. (1/X)
2/ Apple explicitly stated in its blog post announcing Privacy Manifests that their intended purpose is to disrupt device fingerprinting to force app developers to indicate a legitimate use case for data collection by potentially non-compliant SDKs. From the post (emphasis mine):
3/ Apple's approach here is, to my mind, ingenious: by effectively segmenting SDK permissions from general app permissions and forcing developers to certify that SDKs are behaving in accordance with App Tracking Transparency, Apple places the onus of compliance on developers.
Apple seems to be saying that app developers will be held liable for the validity of SDK data use attestations through the privacy manifest system. Will a BigCo legal team be willing to sign off on data usage claims by a third party that it knows to be practicing fingerprinting?
I’d characterize this list of SDKs as “commercially sensitive.”