The mobile app balancing act: Privacy and personalization trends for 2023
If data is the fuel that drives mobile apps towards personalized user experiences, then data privacy is the speed limit – an annoying but completely necessary traffic measure that helps maintain collective safety.
Year after year, the personalization versus privacy debate haunts businesses that connect with consumers via mobile app – How can we strike the right balance and satisfy the demand for both when one could decelerate the other?
As a strategic partner for mobile app publishers, we believe 2023 is no exception. To help businesses manage the mobile app balancing act, Arity’s industry experts compiled a few trends that can help apps effectively achieve both data-driven personalization and data privacy this year:
#1 Apps move toward zero- and first-party data
In the span of two years, we saw major mobile platforms, Apple and Android, update their privacy controls. This shift impacted businesses’ ability to reach new consumers, as well as understand and connect with their current customers via mobile app.
In April 2021, Apple added an “App Tracking Transparency” feature that allows iPhone users to opt out of data sharing with each app. Just six months later, a study found that 62% of users opted out of sharing their information. This statistic isn’t surprising; Arity’s recent consumer report found that more than half of smartphone users have skipped or stopped using apps due to concerns about personal data use.
Then, in 2022, Google announced a similar tweak to Android’s privacy controls, restricting tracking across apps by replacing its advertising IDs – which are used to identify a user’s device – with a more privacy-focused alternative.
As mobile platforms continue to tighten their privacy controls, we believe mobile apps will have to reinvent how they approach gathering user data. Rather than relying on access to user data through Apple and Android, we will see apps move towards using even more zero- and first-party data to continually understand and improve relationships with their users.
#2 Subscriptions evolve the app-user relationship
In addition to an increased reliance on zero- and first-party data, we also predict an acceleration of subscriptions in 2023 – which we view as an opportunity to gain user trust and evolve the app-user relationship.
Over the years, we’ve seen apps’ subscription-based revenue models bring back big success to their businesses. Not only does Apple reward subscriber-retaining apps with a higher revenue split (85-15 versus 70-30), but these apps generally see a more reliable income, a greater revenue stream, and a more engaged audience.
Last year, Tik Tok, the most downloaded app worldwide, took notice and announced LIVE Subscription which targets content creators and offers them a range of perks in exchange for a monthly fee.
Following this trend, we expect to see more businesses add a subscription model to their app or add more benefits to reward new and existing subscribers. For these apps, our recommendation is to leverage their subscription models to gain valuable zero- and first-party data.
Our latest consumer report found that 65% of smartphone users are willing to share their data in exchange for rewards, such as cash, points, products, and insights. Businesses can offer subscribers rewards in exchange for completing customer surveys and/or for granting apps permission to track their activity.
#3 AI generates personalized app content
For years, Artificial Intelligence (AI) has been taking the business world by storm and transforming industries in ways that summoned science fiction. As AI capabilities like art, writing, and customer service further develop and become more reliable, we predict mobile apps will look to AI to generate personalized content for users.
Based on findings from our consumer study, we know that 75% of smartphone users appreciate when apps use their data to provide personalized experiences. One prime example is WeatherBug, a leading weather app and Arity partner. For users who opt-in to share their location, the app continually optimizes its AI so they can get the most reliable and personalized weather information available. Take for example, WeatherBug’s Commuter feature. It helps make commutes faster and safer based on how inclement weather will affect road conditions in a user’s area.
We’ve also seen retailers like Amazon and streaming services like Netflix rely on AI to drive personalized in-app product/content recommendations.
As other businesses look for new ways to increase their apps’ perceived value, AI-generated content could be an innovative and efficient option to provide users with the frequent and tangible value they desire.
If you’re interested in enhancing your app’s data-driven personalization this year, check out Arity’s mobile app solutions:
- Arity’s Predictive Mobility solution enables apps to anticipate what users want based on when and where they drive, so that they can present users with personalized content, offers, and recommendations at the most relevant and useful time.
- With our Fuel Efficiency solution, apps can help their users get the most out of every mile on the road by providing insights into how their driving behaviors impact fuel consumption.
- Crash Detection by Arity is a powerful tool for apps looking to keep their users – and the roads they drive on – safe. The solution can detect crashes in real time and enable responses like alerting emergency services, notifying loved ones, and more.
Ready to learn more? Contact us to start a conversation!