Social media advertisement is the backbone of the modern ad landscape. Over 9 million businesses are currently advertising on Facebook alone, and almost every business (big and small) is active in the social media “ad scape” in one way or another. So, what happens when the way social media ads work changes substantially? Recently, Apple and Facebook have been in a war of words surrounding privacy. Apple’s latest iOS update 14, which includes the controversial App Tracking Transparency feature, due to be rolled out in Spring 2021, is threatening to disrupt many Facebook ad campaigns.
What’s going on? And how can you prepare your business?
Facebook vs. Apple: A Privacy War
Tech giants waging battles in boardrooms, courts, and media isn’t unusual. Amazon and Oracle are going toe-to-toe to secure a multi-billion-dollar government cloud contract, Microsoft and Apple butted heads over the ban of popular video game Fortnite, and Uber and Lyft have regularly accused each other of poaching drivers and stealing business ideas. But most of these feuds happen largely outside the media, and most are warring over financial frictions stemming from a competitive appetite.
Facebook and Apple are having a different kind of battle — one that’s more about philosophy and privacy than money. On January 28th at the CPDP virtual event, Tim Cook — CEO of Apple — thundered, “An interconnected ecosystem of companies and data brokers, of purveys of fake news and peddlers of division, of trackers and hucksters looking to make a quick buck, is more present in our lives than it’s ever been.” He followed this by discussing how data privacy is more important than ever, and data collection and attribution are polarizing and monetizing humans. Finally, he added, “A social dilemma cannot be allowed to become a social catastrophe.” — a brazen jab at Facebook.
This speech — which seems to be a response to Facebook’s recent advertisement campaign against Apple and its potential upcoming lawsuit — all centers around a new Apple feature rolling out in Spring of 2021. Apple’s AppTracking Transparency Policy will ask users if they want apps like Facebook to track their data across the web — allowing users to immediately opt-out of data tracking.
Understanding Apple’s AppTracking Transparency Policy
The Apple AppTracking Transparency Policy update — originally announced at WWDC back in June 2020 — will force developers to ask permission before their apps can track/share user data for advertising purposes. To be clear, this is different from Apple’s current iOS, which allows users to opt-out of data tracking. This is an opt-in that displays after users open an app for the first time. In other words, every app will have to explicitly ask permission before sharing your Identifier for Advertisers (IDFA) — a unique identifying number that Apple puts on each device to allow advertisers to track data to deliver personalized advertisements.
In addition to the opt-in, Apple will allow users to turn off a new “Allow apps to request to track” feature to permanently deny apps (no pop-up will even appear) from sharing their IDFA.
This is a massive change. Eighty-one percent of Americans already believe that the risks of personalized ads outweigh the benefits. So, we fully expect the vast majority of users to opt-out of data collection. But what does that mean for businesses?
How Will AppTracking Transparency Impact Your Business?
Apple’s privacy-centric business model (which started around 2010) is at direct odds with Silicon Valley’s ad-dependent financial structure. Apple doesn’t need ads to generate revenue: Facebook does. By association, most businesses that advertise on social media platforms depend on data tracking. It’s the juice that energizes targeting campaigns, re-engagement, and re-targeting. So, what happens when that juice spills out on the counter? According to Facebook, “As more people, opt-out of tracking on iOS 14 devices, ads personalization, and performance reporting will be limited for both app and web conversion events.” And that’s true. The effectiveness of advertising campaigns is about to take a hit, especially for firms that rely on pixel data for personalization and targeting.
Google is warning advertisers that they will “see performance fluctuations” once Apple releases its new update, and Facebook is predicting that this update will make it “much harder for small businesses to reach their target audience.” If no preparations for the upcoming privacy feature are made, you should expect drops in performance on targeted ads, increased ad spend waste, and reduced ad potency. Preparation and attentiveness are key!
Facebook recently released a blog post that suggests that the iOS 14 changes will impact the following in campaigns that rely heavily on the use of pixels:
- Your ability to deliver effective ads
- Your ability to measure and report on conversions
- Your ad relevancy
- Your budget prediction capabilities
And Apple’s recent update isn’t the only privacy-centric update that will impact your ability to serve up hyper-relevant ads. Google has plans to eliminate third-party cookies by 2022. Tech giants (at least some of them) are rallying around privacy as a new pillar of customer-centricity and change. And we fully expect updates like this to continue to be the norm in the ad space.
So how can your business prepare itself for the apocalypse?
Preparing for AppTracking
Note: There are a variety of changes app developers should make such as upgrading their Google’s SDKs and updating their app to include the new opt-in. You can see a full list of those changes from Facebook and Google.
Currently, most material surrounding preparation for this change is targeted towards developers who run the back-end of websites leveraging event triggers and pixels. But what about businesses? How can marketers and businesses prepare for this chaotic change? We’ve identified 7 core preparation messages that will help you digest these changes:
- Diversify: The single most important approach to this change is diversification. To be honest, no one really knows how this is going to play out. Facebook is in the midst of working on new APIs, and they will likely roll out a variety of updates surrounding this change. For now, prepare your campaigns and try out different campaign types and strategies before the ATT rollout is finalized. One alternative you could try is encouraging users that interact with your ads to give you personal information early on. Names, email addresses, and the sort can all retroactively be uploaded back onto Facebook to create custom audiences for retargeting purposes.
- Consider the new limitations: If nothing is done in preparation for the upcoming privacy feature of the update to roll out, Facebook estimates that this update could cause 50% revenue drops for publishers. That’s insane! Imagine halving your ad effectiveness. That’s obviously not ideal. There are real, tangible limitations surrounding this new Apple update. And you need to be fully prepared in order to counter these possible effects as much as possible.
- Re-think targeting campaigns: For years, targeting has been the key to minimizing ad spend waste. After this update, the overall efficiency of this targeting will tank if you rely on pixel targeting. If this is the case, re-think your buyers’ personas and ideal audience. You may need to broaden your horizons and consider new, interesting ways of targeting that don’t rely so heavily on Facebook’s pixel tracking, such as by creating web visit campaigns and using your site’s internal tracking to discern whether a conversion occurred. Facebook lead ads are another effective way for law firms to get leads that do not rely on the Facebook pixel.
- Reconfigure your funnel: You have to reconfigure your funnel. We’re working closely with our law clients to ensure that their entire end-to-end marketing funnel is configured in a way that minimizes the impact of this update. Often, this means re-thinking where Facebook belongs in this funnel, and how we can still use Facebook effectively without relying too heavily on targeting (at least until we see some real-time metrics).
- Prepare your benchmarking arm: Metrics are about to get out-of-whack. Your marketing department or agency should be preparing you thoroughly for these changes. It’s important to set realistic expectations. Your retargeting, lookalikes based on website data and seeds are about to get messy. Carefully examine your campaigns and analyze your KPIs to establish benchmarks that make sense in the context of these adscape changes. Pay close attention, specifically, to the metrics and results that are tied to iOS devices.
- Diversify re-engagement: This is the perfect time to test drive new email, SMS, and push notification strategies. Paid retargeting isn’t going to work as well as it did before in the traditional sense, and even Consultwebs is testing a strategy that involves using video view time and website data as retargeting metrics, so it is safe to say that the more creative you can get with your new strategies, the better. The sky’s the limit, but it would also help to implement tactics outside of the PPC realm.
- Keep watch: Your monetization and revenue metrics are going to be crazy during the first few weeks. The key to winning these changes is reacting early. Keep your eyes glued to the data, and you can quickly pull-back and push-forward on things that are working or not working.
- Prepare your developers: There are tons of back-end changes that need to be made to accommodate this update. You should consult with your developers or website development agency to help you prepare (on an infrastructure level) for this update.
The Privacy Wars Are Taking Shape
As a brand, we’re very conscious of user privacy. Not only is privacy a fundamental right, but privacy-centric practices help brands grow into meaningful and customer-centric centerpieces of their industry. We’re positive that we’ll find a way to continue to bring tangible results to our clients, regardless of these privacy changes. But businesses need to be prepared. This isn’t the time for false promises. There’s a good chance this update is going to wreak havoc on some campaigns that rely on Facebook’s website pixel while others will be largely unaffected. Companies and firms that understand this and have a partner that’s prepared to make both premeditated and nanosecond changes to their campaigns to keep efficiency up are well poised to handle this new privacy landscape.
Are you looking for a boutique marketing and web development agency to help you build effective campaigns in a privacy-forward ad ecosystem? Contact us.