Looking Ahead to 2023: A Recovery of the Mobile Landscape

M&A is changing the advertising landscape

Social media and the race to monetize

Social Platforms Shape Gen Z Ad Expectations

Gen Z adults (18 to 26 years old) are surrounded by YouTube and TikTok, and short video is now a ubiquitous entertainment option. The fight for attention means ad campaigns are becoming shorter and it is even more important to seize the "golden seconds" and find better tricks for attraction and retention.

As a result, the monopoly of the two giants, Meta and Google, is changing.

On the one hand, advertising budgets are shrinking again and advertisers are more cautious than ever. According to the AppsFlyer Performance Index (15th Edition), app activation ad spending budgets fell 14% YoY in Q2 2022 after a 2% increase between Q4 2021 and Q1 2022. Average budgets for apps fell by 12%, with budgets dropping on Android slightly more than on iOS. A year-over-year comparison even shows that the overall mobile ad market will lose four times as much money in 2022 as it did in 2021.

On the other hand, Apple's moves on anti-tracking have caused major disruptions to both companies' advertising businesses, greatly changing their user targeting methods and data benchmarks. While Meta has transitioned safely to the SKAN framework, it is still hurt by ATT. Unlike Meta, which takes apps as its main asset, Google's main business asset is search engine, which is less directly impacted by ATT. However, its media channels, such as YouTube, will certainly be impacted by pop-ups, and thus may still cause Google to miss some business opportunities.

In 2022, mobile developers in almost all markets ran into some difficulties. Many were investing in their titles but seeing stagnating returns - largely due to the decline in users and the global economic environment.

As 2023 gets underway, developers will shift their media buying strategies to focus more on ad quality and efficiency. Being stringent with testing will help ease the pain of reduced budgets and help drive ROAS.

As the cost of media buying rises worldwide, video ad formats will continue to engage and convert users well. An advertiser's creative approach will become especially important, as will looking to new emerging markets where the growth rate continues to be much higher. Southeast Asia, Latin America, and the Middle East are all worthy of mention and each holds a distinct advantage depending on app vertical, budget consideration, etc.

As the cost of media buying rises worldwide, video ad formats will continue to engage and convert users well. An advertiser's creative approach will become especially important, as will looking to new emerging markets where the growth rate continues to be much higher. Southeast Asia, Latin America, and the Middle East are all worthy of mention and each holds a distinct advantage depending on app vertical, budget consideration, etc.

The call by consumers for control over how companies use and protect their data is still triggering a wave of regulation around the world. While the effects of Apple's ATT frameworks and previous regulations such as GDPR have waned, the industry waits for Google's Privacy Sandbox for Android to be implemented in 2024.

The call by consumers for control over how companies use and protect their data is still triggering a wave of regulation around the world. While the effects of Apple's ATT frameworks and previous regulations such as GDPR have waned, the industry waits for Google's Privacy Sandbox for Android to be implemented in 2024.Since the recent push for privacy, we've found advertisers shifting from ad giants such as Meta and Google and testing more test more third-party channels as well as different forms of advertising; in addition, forward-looking advertisers are also paying more attention to building up first-party data tech as well as strengthening their creative and content capabilities.

In the current marketing environment, data is an important asset. As marketing technologist, Scott Brinker said, "In modern enterprises, there is a huge data ecosystem, with front-end applications and operations producing massive amounts of first-hand data...This data is also used in systems for data science, machine learning and business intelligence, which then feeds into the application and operations that are at the top of the hierarchy. These are the systems that marketers rely on."

Building first-party data protections and systems is now an industry standard. It is a sign that companies are more efficiently analyzing this data and developing advertising strategies that fit into the privacy protection framework.

2023 will be a crucial year for the mobile industry as it continues to recover from the pandemic. Mergers and acquisitions, strategic partnerships, and the race to monetize social media will shape the advertising landscape. TikTok and other social media platforms are attracting Gen Z users, who are more sensitive to privacy policies. The monopoly of Meta and Google is changing due to declining advertising budgets and Apple's anti-tracking measures. Winning the global market is becoming increasingly difficult for mobile developers who are facing stagnating returns. With these challenges and opportunities, entrepreneurs must remain vigilant and adaptable in the constantly evolving mobile landscape.

XMP is a one-stop cross-channel intelligent media buying platform dedicated to improving the efficiency and effectiveness of advertisers. It integrates global top media, SDK Ad Networks, and mobile measurement partners and enables advertisers to manage their advertising campaigns, creatives, and data across multiple channels all in one platform. Contact the XMP team today to start your journey to success!