Where Mobile Advertising is Heading in 2022

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In early 2021, mobile advertisers expected the sky to fall with the effective deprecation of Apple’s Identifiers for Advertisers (IDFA), or at least they saw a very dark cloud. In response, the ad tech industry began developing other means for identifying those iOS users who really, really wanted their private information to be tracked. And although developers who were creating apps for Apple devices initially saw reductions in user acquisition and revenues, most app categories bounced back and returned to earlier levels.

Why? Eyeballs are still eyeballs, and apps provide value for advertisers who still want to reach mobile audiences. Not surprisingly, those advertisers who didn’t rely solely on Apple apps for user acquisition and out-of-network performance revenues were spared many sleepless nights.

Still, there were casualties, probably the biggest of which was Facebook. Having built its revenue model on targeted advertising, Facebook took a broadside hit, as recently shown in its reported earnings.

So, where is mobile advertising heading? Here are a few predictions, including a blend of performance and brand marketing, added audio inventory, and an embrace of AR and VR.

A Move to Blended Advertising

Looking outside of Facebook and other out-of-network sources, mobile advertisers needed a way to replace the user acquisition campaigns they had been running. In many cases, they’ve put this spending into less expensive ad units that mostly reach the same eyeballs.

Since Apple gave users the choice to block IDFA at the app level last year, app display advertising has experienced a surge that has grown these less costly, yet safe, audiences, which leads to my first prediction: There will become less of a division between performance-related cost per acquisition (CPA) mobile advertising and branding cost per impression (CPM) mobile advertising.

By moving toward a CPM model, mobile advertisers have begun the “big blend,” and as privacy efforts continue to grow, that blending will become more weighted.

Added Inventory with Mobile Audio

Whether free or paid, advertising supported or subscriber supported, businesses will always use their mobile apps to increase revenues. The IDFA earthquake shook the tree and has given developers a reason to look for new ways to acquire users or at least maintain their Return on Advertising Spend (ROAS) and build revenues.

Many industry watchers believe native ads will make a comeback, but those ads still use the same real estate that already exists in apps today and would basically just be swapping one type of ad unit for another. Native would have to provide a greater value to make that move, which leads to my second prediction.

Mobile audio ads will finally start to break through and demand serious consideration for new ad types, such as rewarded audio ads in mobile games. Video and interstitial performance ads have been a mainstay for apps, but audio ads, specifically rewarded audio, will open a new revenue stream. 

Expanding into Augmented Reality and Virtual Reality

Not wanting to sit on the sidelines while the meta universe evolves without them, even the most casual mobile game developers realize the landscape is dramatically changing, which leads to my third prediction.

Mobile game developers will have to expand into augmented reality and virtual reality or slowly be pushed toward obscurity. Mobile devices are becoming more powerful, and the bandwidth available to those devices is becoming more robust. There may always be a need for casual experiences, but gaming and user experiences on every level will expand. As a result, my previous prediction around mobile audio ads becoming more prevalent will be a nice component of the AR/VR revenue model.

Driving the Mobile Ad Industry Forward

My fourth prediction is more desire than divination, but it is a driving factor for the other three predictions. I have been a big proponent of user privacy, and I hope 2022 will be the year that user anonymity reaches a tipping point in the mobile media sector.

Powerful players who rely on user identity data will continue to spend their budgets on lobbying, influencing, and directing regulations and industry standards to their benefit. However, if 2021 taught us anything, there is an overwhelming movement to enforce user privacy. I look forward to a mobile media sector that is predominantly based on anonymous moments, where user identity is not part of the value offer.

Getting to that point will require improved standards across the industry, not just anonymizers or systems that basically still access users’ private information and whitewash anonymity so only the originator effectively knows, digests, and profits from the user information. I don’t see how these tactics to sidestep anonymity solve anything, except to maintain those companies that already profit from data identity. 2022 will be the year we as an industry start to plug these holes and initiate the effort toward real privacy protection.

So where do we go from here? I expect 2022 will be a great year for mobile media. Yes, we will always have new challenges and tests, but as an industry we are heading in the right direction. Combining the predictions, I see a growing mobile device app sector with less reliance on out-of-network identity-related performance advertising, revenues from emerging ad unit types that work better within new user experiences and a more equal operating field where app developers start to wrest some control back from those that have historically directed the sector through data identities. 

Todd Wooten is the Founder and President of VRTCAL.