TikTok Doubles Share Of Ad Spend, AdTech Consolidation Hits 29%

The number of top ad networks dropped by about a third in the last year as the rich got richer in mobile advertising. TikTok, in particular, grew very fast, doubling the share of ad spend it captured. So did Apple’s ad network, Apple Search Ads, which grew about 33% last year.

What precipitated the consolidation?

Apple’s introduction of App Tracking Transparency in 2021, which Meta/Facebook has blamed for reducing ad effectiveness.

The consolidation data is from the 2022 Singular ROI Index, a report that analyzed data on over 300 of the world’s largest ad networks, 5,000 apps, and $20 billion in revenue. (Full disclosure: I wrote the report for my consulting client Singular.) While the previous year’s index showed that 42 different ad networks ranked on at least one of the various top lists for regions and verticals and platforms, this year only 30 names made the index.

In fact, if you list acquired networks that still have their own brands with their new parent companies, the list gets even shorter: down to 24.

That checks out because, as Statista reports, the number of adtech mergers and acquisitions were three times higher in 2021 than in the previous year, with 90 major deals including:

Apple’s new privacy technology, App Tracking Transparency, doesn’t actually ban the collection of data, however. What it does do is make sharing data across companies harder, because adtech players need to get consumer consent first, and most people don’t want companies sharing data about them with other companies.

(Shocking, I know.)

The net result is accelerated adtech consolidation because when ad networks acquire competitors, they aggregate more first-party owned data. They can use that data to understand audiences and target ads better, and they don’t need to get as much shared data from other companies, or share insights out to them.

Big winners in this new reality include platforms like TikTok, mostly because it’s fast-growing in general, but also acquisitive adtech companies like AppLovin and ironSource. ironSource has acquired at least nine companies over the past few years; AppLovin has acquired or invested in at least six, including two massive billion-dollar deals.

Interestingly, Google and Facebook both rank very well in the report even though their recent quarterly results show significant divergence.

(Facebook face-planted while Google had a breakout result.)

Meta is showing the impact of heavy reliance on Apple’s iOS platform and therefore losing significant amounts of user intent signal — especially for the lucrative mobile user acquisition subset of the mobile advertising ecosystem — when ATT impaired the flow of data from third-party apps. Google, however, has its own mobile operating system and app acquisition ecosystem in Android and Google Play, and also has the benefit of being a search engine. Search means intent, and intent means profitable advertising opportunities, because a search like “best app for banking” shows significantly higher levels of probably future action than merely browsing social media.

However, Google’s impressive results suggests that while Meta needs to make more changes, it still should be able to adapt and do just fine with the huge quantities of first-party data it has. After all, billions and billions of people use its Instagram, WhatsApp, Facebook, and Messenger platforms.

Sure, perhaps not quite as fine as before, but Meta is still in an enviable position.

Apple itself, of course, has benefited from the new rules on iOS — as we’ve seen in other reports on Apple Search Ads growth in 2021. It’s important to note that Apple’s ad network was doing well before the introduction of iOS 14.5 and ATT as well. The new privacy regulations helped, however.

One huge reason Apple Search Ads is doing well?

It combines intent data (searches on the App Store) with contextual data (ads are placed near complementary apps) with behavioral data (Apple uses data from other Apple apps in a privacy-safe way to target ads to groups of people). That’s a trifecta of relevance, and the result is that Apple Search Ads ranked at the top of all ad networks for iOS.

Here are the top mobile-oriented ad networks ranked by number of mentions on various ROI Index lists:

• ironSource
• Liftoff+Vungle
• Google
• Meta (Facebook)
• TikTok
• Moloco
• AppLovin
• Snap
• Unity
• Twitter