The iOS Update and Its Impact on The Digital Advertising Industry

Behind the glamorous Apple’s Summer 2020 “Spring Loaded” event, where iPads, iMacs, and a Willie Wonka purple paint job for iPhones were featured, the company quietly announced a small yet important tweak to their operating system.

Apple, specifically lets users know that the next iOS 14 updates will include an option for users to opt-out of any in-app data collection in apps like Facebook and Instagram.

…And, after loads of speculation, the much-anticipated privacy changes are now underway.

Although most companies have been preparing for this moment, in reality, people are ill-prepared and confused about the next move.  No need to panic just yet though, at least not until you carefully go through this primer on what the iOS 14 update means for the digital advertising industry.

So what is going on?

What? By updating their operating system, iOS 14, Apple seeks to limit the amount of information shared with Facebook and other companies, by letting the consumer choose to opt-out of data collection and sharing.

Why? The main motivation of Apple is to use their AppTracking Transparency framework to ensure that users’ data and privacy is protected. According to apple,

“Privacy is a fundamental human right and at the core of everything we do. That’s why with iOS 14, we’re giving you more control over the data you share and more transparency into how it’s used.”

How? All mobile apps downloadable via Apple Store will be required to have prompts to iOS 14 users. The prompt will allow users to choose if to opt-in for tracking.

What will be affected by the iOS 14 update?

Some level of disruption in the marketing efforts for businesses and brands that use Facebook to run ads is expected. Specifically, the update will affect:

• Advertising on mobile Apps
• Ads optimization
• Track web conversion events such as online purchases and form submissions.

Timeline of Updates

Summer 2020 – Apple announces the new privacy feature called App Tracking Transparency (ATT) and says it will come in the fall of 2020.

September 2020 – Apple decides to delay the rollout after much pushback from Facebook and the ad industry in general. Settled on launching in 2021.

March 2021 – Facebook rolls out a resource center to help advertisers understand these changes to the iOS and how it will impact them.

April 2021 – iOS 14.5 launched. Advertisers are officially no longer allowed to capture data associated with a unique ID without the explicit consent of the user.

Jun 4 – iOS 14 achieves a 90% installation rate on iPhones released between 0-4 years ago.

Jul 21– A new update to iOS 14.7 is available to offer protection against Wi-Fi bugs.

Sep 13– Apple releases iOS 14.8 which comes with new security updates and addresses any security oversights present in the earlier options.

How does this Impact Facebook Advertising

Facebook has published public responses, citing tests and cases to show that theiOS 14 will lead to a dramatic reduction in the effectiveness of ads placed via the platform.

In their press release, Facebook highlighted that those small businesses that use Facebook to reach target customers will most likely see a 60% decline in sales for every $1 spent on digital marketing.

Definitely, this is a mega decline in the ROI, and it could have some negative implications on your digital marketing campaigns going forward.

If the new update from Apple is not countered by a favorable update from Facebook, expect your marketing efforts to be affected in two key areas:

• Ad Retargeting: Unlike in the past, if users who have opted out of Identifier for Advertisers visit your website using their Apple iOS devices, you simply can’t retarget them. (Notably though, retargeting is possible if you are using their phone number or email).
• Ad Measurement & Reporting: The inability to accurately collect information necessary to tailor your Facebook ads means that the conversion data will not translate to leads for your business. Moreover, Facebook will have limited ability to check ad frequency for iOS 14 users and get your ads to the most desired audiences.

Advertising and driving conversions will still be possible with the iOS 14 devices, however, there are significant changes that you need to take keen note of as you plan your digital marketing going forward.

#1: Loss In Conversions Tracked

You will most probably witness lower conversions as users who view your Facebook ad and have opted out of tracking will not be tracked.

#2: Delayed Reporting  

Real-time reporting will not be available for iOS 14 users. In fact, if you have a reporting dashboard, expect up to 3 days delay before you can get an accurate picture of your advertising efforts. The delay in reports will be experienced by all advertisers.

#3: Smaller conversion window.

The main reason people love Facebook ads is the retargeting feature. Now, with iOS 14, the retargeting period has been reduced from the standard 28 to 7 days. This is not entirely a nasty thing. In 7 days, your ad is still fresh in your target users’ minds. Prepare your marketing team to make necessary changes to capture the attention of the audience within this shorter window.

#4: Minimum of 100 purchases in 7 days for Value Optimization.

The key strategy to drive sales in Facebook Ads is value optimization. This means that Facebook optimizes an ad space based on customers with the highest potential, a strategy that generates high revenue. With the new retargeting window of just 7 days, Facebook wants you to close a minimum of 100 conversions to allow them adequate data to optimize your ad based on value.

The importance of this restriction is that to run value optimization Facebook ads, you will need to have not less than 100 conversions in 7 days.

The good news? You can team up with an experienced digital marketing agency to help you optimize your ads and meet your business objectives.

#5: Limited to 8 Conversion Events

The vast majority of Facebook ad accounts use less than the 8 conversion events per pixel, but some businesses use up more than eight. As such, you need to inform your team of the need to re-strategize and consolidate your page conversion events. One strategy that you can utilize is to put conversions under overarching events to avoid a scenario where you need more than the set of 8 conversion events.

Facebook will be migrating to a full server-side tracking system in the last quarter of 2021, which will be a departure from the current server-side API. The new system will be the antidote around the eight conversion events limitation.  The system can get data right from your website server, ensuring that the data is accurate and reliable. Moreover, it will get missed data and initiate an automatic process to remove any duplicate information.

For instance, if a user clicks on your Facebook ad and uses the link to visit your website, the Facebook pixel will only fire once. At the same time, a Google Tag Manager will also be fired. However, these events will be counted as one to avoid unnecessarily doubling the data.

Tips for Moving Forward:

All is not lost. You can utilize a few actions to acclimate your business to the changes by Facebook and iOS 14. Here is a to-do- list to keep your business ahead of the changes.

Investing in understanding your customers’ behavior

All these changes are a good reminder that you have to do what you can to understand your audiences and their behaviors as best you can. Invest and prepare your team to carry out your in-depth research on potential customers and their purchase behavior.

Your business can no longer wait for the algorithm to inform you who your potential audience is- you need to know enough about selecting the right target audiences to get your campaigns heading in the right direction.

Shift your budget to what matters

If you notice a decline in the ROI on your Facebook ads, you may consider shifting to other ad platforms. For instance, Google Ads has robust remarketing features and can target users based on search intent.

Email marketing, organic search, and organic social must remain a priority going forward, or if you’ve been neglecting these channels, it’s time to re-invest your time into them.

Finally, do not forget to use your customer lists to enhance the effectiveness of Facebook retargeting. If you have a customer email list you can still upload it and use it in Facebook advertising, as well as it’s lookalike audiences.

Conclusion:

The issue of user privacy continues to grow and evolve, and it will continue to impact digital advertising in the long term. It’s important to partner with an ad agency that is on top of these changes and knows how to pivot appropriately.

Businesses, now than ever, must be flexible to deal with the changes brought about by iOS14, as well as any other big changes that are to be expected fairly regularly in this industry. Your business needs creative solutions and an experienced Facebook ad agency team to remain on top.

We say, don’t be afraid of changes, bring them on, and with the right marketing experts, you’ll always end up on top.