Intro
How will AI *actually* change advertising?
Like most folks, I’m getting tired of AI dominating the narrative of every article. Although there’s a lot of agreement that we’re witnessing a fundamental shift in the world, there's not a lot of intelligent rhetoric on how it will actually change an advertiser’s daily life. You can wade through 100-page manifestos where Open AI researchers claim AI will be “able to automate basically all cognitive jobs”, or watch Elon Musk haltingly hand-wave an assertion that AI will “provide universal high-income [and make] work optional” for all of humanity, but it's not practical or helpful in understanding how it will impact our daily lives.
I can think of four main themes in how AI will change our future as mobile growth leaders:
- ML takes on targeting and campaign optimization: We’re already doing this today; Google’s PMax and Meta’s Advantage Shopping Campaigns are using broad-based ML targeting and feedback loops to increase the efficacy of performance advertising. This takes the bidding and targeting strategies out of advertiser hands and puts them into a much more diligent and scalable algorithm. While it takes away visibility and customization, it allows for very scalable and effective performance advertising.
- GenAI runs ad creative creation and optimization: Again, this is already happening in-market. Meta and Google are testing this today, but there are smaller players already running at scale. The folks at Poolday are auto-generating TikTok creative, creating scary-realistic influencer ads. This will decrease cost and effort in creative production and testing, leading to better performing (and more cost-effective) advertising.
- SEO will become “AIO”: Google has announced the insertion of sponsored results into AI Overviews, hinting at future branded AI suggestions. This is especially advantageous to Google as it can heavily rely on the existing keyword framework — the backbone of its incredibly successful search ads business — for context to intelligently provide helpful AI suggestions with no need to change workflows. As this use case matures, I expect to see innovators quickly start to learn methods for measuring and optimizing this new ad paradigm.
- Finally, Apple Intelligence Advertising: Apple’s WWDC announcement of Apple Intelligence, which allows users to string in-app actions together via the App Intents framework, signals a coming gold rush of opportunity where apps will learn how to choose, market, and measure how App Intents drive user behavior. It’s not a stretch to see App Intents take the shape of the App Search Ads, where apps will bid on popular terms for a chance to get in front of the user. And even if it doesn't turn into an ad network, it’ll certainly be an opportunity for analytics and optimization.
Interesting Reads
The changing shape of marketing measurement
A colleague postulated an interesting theory the other day: “the distinction between brand marketing and performance marketing will evolve into the analysis of where in the marketing funnel the media engages the user.” I think this an interesting concept; the idea that an advertiser can marry “branding” — a traditional broad-based, trust-building media plan — with the novel concept of “performance," a digital-first methodology of paying for specific activities.
This would make for an ideal world, allowing an advertiser to marry these two traditionally federated types of marketing into a unified strategy. The problem is both require accurate, repeatable measurement. Without measuring the outcome, you can’t drive users through the marketing funnel. Without it pointing in the right direction, a funnel is useless.
The reality is the world is drifting further away from accurate measurement. User and data privacy, walled gardens, multiple consumer devices all increase the difficulty and uncertainty of measuring the impact of your marketing. Today’s executive needs to understand the themes and challenges the industry faces to better prepare their business. I tried synthesizing the major trends and how they will reshape digital marketing measurement in hopes that it will help you develop strategies to stay ahead of our ever-changing landscape.
Privacy & Security
Meet AdKit: the new SKAN
Apple’s take on Apple Intelligence — which seems to have resonated very well with the industry — will likely change how we interact with our mobile phones in the future.
But for us in the trenches watching this year’s WWDC, there weren’t that many surprises coming out of Apple’s conference. The most salient for mobile marketers were the changes to Apple’s attribution tools, previously SKAN. The new framework is objectively better — better reengagement support, alternative stores, better engagement-type and late-stage granularity. Is it perfect? Nope, but it’s a step in the right direction.
UX
RIP: "Someone liked your text"
In doing its noble part to combat cyber bullying, Apple slipped in an overlooked feature during WWDC: they will make good on their promise for Rich Communication Services (RCS) support in iOS18. Non-nerd speak: "no more green vs. blue text messages."
While I'd love to believe Apple's pushing for a unified, inclusive, digital utopia, it's far more likely because DOJ prosecutors are pointing out difficulties in "not being able to send my mom certain videos."
Someday, you'll catch yourself regaling youngsters with tales of the ancient struggle of managing group chats...
Data
What's going on with mobile gaming?
For over a decade, gaming has served as the darling of the mobile industry, continually eclipsing record highs and giving FOMO to all who found themselves outside the exclusive circle of explosive growth. But times have changed. By most measures, 2023 was "brutal for folks in the industry" and halfway into 2024, there have already been more layoffs than all of last year. SensorTower’s newly published data shows universal, year-over-year declines in downloads and revenue.
This isn't a mobile-wide problem. Overall U.S. consumer spend is up on apps, but down on games. So what's going on with gaming? The reasons are immensely complicated — rising costs, falling revenue, and shifting consumer attention to name a few — but the outcome certainly makes for a tough market.
Consensus says this is a temporary rough patch and gaming is still — and will continue to be — a powerful sector. After all, $1.5 billion dollars is spent on mobile games every single week, which is great news for anyone wanting to create a viral, breakout business with nearly 1 million concurrent users, aggregating 250 million user hours of playtime, by simply repeatedly clicking on a picture of a banana. (Yes, seriously.)