Subscription apps and SKAN 4: #winning?

This is a guest post on subscription apps and SKAN 4 by Rich Jones, a product director at Dataseat (part of Verve Group)

While SKAdNetwork version 4.0 has been well received by privacy-oriented ad tech, adoption still lags far below 100% after almost a year and a half in the wild – with 15% of OpenRTB traffic still preferring v3.0 as of May 2024 and many advertisers also sticking with lower versions.

From the perspective of app advertisers, there is a significant difference between SKAdNetwork versions 3 and 4. As we approach more news about the next iteration of SKAN, now is a great time to remind ourselves why updating to the latest version is valuable for app marketers, especially subscription apps.

The benefits are clearest for subscription apps, where better in-app conversion tracking presents a giant leap forward in possibilities.

Subscription apps and SKAN 4: let’s dive into the benefits 

Getting straight to the point: if the key success metric you want to measure is a subscription, then SKAdNetwork 4 is likely to be an excellent solution for your campaigns.

Because SKAN 4 offers the ability to measure conversions and conversion values for up to 35 days post-install, you can differentiate between lower, medium, and higher value subscriptions (or similar In-App Purchases, aka IAP).

For example, TV subscription apps may use different conversion values to differentiate between lower (e.g. ad-supported) and higher cost (e.g. premium) membership tiers. Other subscription apps may use the lowest conversion value to indicate continued use only (up to date 35), while still retaining the ability to differentiate between two different paid subscriptions occurring during that period. Accordingly, unlike some other app categories, subscription-based apps can often report accurate Return On Ad Spend (ROAS) using SKAN only – without the need for heavier-weight solutions.

This is great news for developers running user acquisition campaigns in the post-App Tracking Transparency world since SKAN can accurately highlight which media channels drove the most – and highest value – subscribers, allowing budgets to be allocated based on ROAS, driven only by SKAN.

Will SKAN 4 work well for my app?

There are two elements of SKAN to consider when evaluating the suitability for your app:

1. Is the conversion window long enough to capture key IAPs?
2. Are three conversion values available enough to differentiate your long-term IAP values?

Conversion window suitability

The key thing to consider is the limit of 35 days post-install for measuring conversion events. For many apps, if the user fails to convert within 35 days then it becomes increasingly likely that they will churn. This scenario is well suited for SKAN 4, since you can rely on it to measure most of the events which are useful for judging user value driven by different paid media channels.

Conversion Value suitability

SKAN 4 offers the ability to separate your second and third postback conversions into three different levels – ‘low,’ ‘medium,’ and ‘high.’ For subscription apps running on Dataseat, we often see this as being enough to cover the different subscription values available.

However, apps presenting users with lots of different conversion opportunities may find this to be too restrictive. Many retail apps fail the test here: if purchases of many products can be made (e.g. from $1 to thousands of $’s), then three conversion values cannot give a complete picture of ROAS. (Note: ROAS measurement is likely to improve further with the next version of SKAN with re-engagement measurement expected. And, if your retail app has relatively immediate conversions, you can capture more data in your first postback’s conversion value.)

Additionally, if it’s important for the retailer to track many purchases per user, then the same limitation also presents a challenge. Apps that need to track conversion events with a large spread of IAP values, or repeated conversions over a long period, will struggle to report return on ad spend using SKAN.

This is why apps monetized by subscriptions are often good candidates for SKAN: with one key IAP event to track – the subscription itself – and a relatively small number of different values.

Should I update now, or wait for SKAN v5?

With WWDC 2024 just around the corner, we should expect to hear news on the next round of updates to SKAN – where the ability to support re-engagement tracking is expected.

As this will build on top of SKAN 4, developers looking to upgrade from version 3 will still need to define their Conversion Value schema to power improved ROAS tracking – whether upgrading to v4 or waiting for v5. For subscription apps in particular, you might as well do this sooner rather than later.