Are the iOS 14.5 privacy settings taking a bite out of sales?

by Laura V. Garcia

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Released on September 16, 2020, Apple’s revamped version of its operating system, iOS 14, was one of the company’s most significant updates to date, introducing some pretty big changes for users and advertisers alike. The update brought changes to the design of the home screen, updates for existing apps, a new, smarter Siri that could answer more questions as well as send audio messages, along with some major new features and refinements that streamlined the interface.

Apple's iOS 14.5 is a game-changer when it comes to targeted marketing

On April 26, 2021, Apple released an update that meant users would now need to opt-in or grant permission for an app to track the user’s activity outside of the platform, limiting certain data tracking and sharing unless users chose to opt-in.

Suddenly, marketers were lacking cookies and riding blind. Their once laser-focused ads that had been based on consumers’ online behavior are now less personalized, and therefore, possibly less effective. Concern was this would lead to smaller audiences and less useful data, and take a giant bite out of sales, courtesy of Apple’s new privacy enhancements. Furthermore, the change also meant advertisers would be capped at eight conversion events such as lead or landing page views from a single website domain. 

The operating system’s default is for tracking to be disabled. However, according to a sampling of 2.5 million daily mobile active users taken by analytics firm Flurry, after updating their device to iOS 14.5, only 4% of iPhone users in the U.S. have actively opted into app tracking, far less than industry experts were expecting.

The update also gives users the ability to cloak their personal info by blocking their IDFA, a random identifier assigned by Apple that advertisers use to track and identify a user and deliver customized advertising. 

So, why the change?

Well, Apple says that users deserve the right to choose whether their data is collected or not. Not surprisingly, however, Facebook had a big concern over the change, running both print and digital ads in the New York Times, The Wall Street Journal and The Washington Post stating that they were standing up to Apple for small businesses everywhere.

“While limiting how personalized ads can be used does impact larger companies like us, these changes will be devastating to small businesses, adding to the many challenges they face right now.”

Facebook says the change will severely reduce the efficacy of advertising on their platform. Citing tests and use cases, they claim that for every dollar spent, the average small business advertiser stands to see a cut of over 60% in their sales. If that’s the case the dramatic drop in sales would drastically reduce the ROI of Facebook ads and could have some very dire consequences for your future digital campaigns.

Facebook’s full response can be found here.

We don’t necessarily agree with Wired’s assessment that Facebook is being a little “extra” and are mainly protecting their own self-interests rather than being authentically concerned about the impact on small businesses. The company does bring up some very valid points, after all. 

Yet, so does Apple, who in response to the backlash, released the following statement:

“We believe that this is a simple matter of standing up for our users. Users should know when their data is being collected and shared across other apps and websites — and they should have the choice to allow that or not. App Tracking Transparency in iOS 14 does not require Facebook to change its approach to tracking users and creating targeted advertising, it simply requires that they give users a choice.”

Let’s just hope that in the end, as Wired predicts, the change benefits all by creating a more fair ad marketplace. But only time will tell just how the privacy changes will ultimately impact ad campaigns.

In the meantime...

What can advertisers do about iOs 14.5?

Privacy updates are quickly becoming the norm, so having some strategies in place to help you claw back what may be lost is a good idea. Here are a few different strategies advertisers are using to mitigate the risks brought on by the latest iOS update.

  • Consider how you can better utilize already owned data. Retargeting an email list or using lookalike audiences is a cost-effective way to drive a little more traction from your current assets and improve your return on ad spend.
  • Redistribute some ad spend and diversify with platforms like Google where users can be targeted based on search intent.
  • While you may choose to continue to run some campaigns through Facebook, there are options when it comes to reporting. For instance, by adding UTM parameters to their URLs, companies may choose to leverage Google Analytics to track Facebook ad activity.
  • To continue targeting your audience on Facebook, start conversations and generate a lead from users who click on your ad. You can also create a lead-generating chatbot on Facebook Messenger using the messaging objective. Users who contact you through messenger can also be retargeted.
  • Check out Facebook lead ads. When lacking cookies, you can generate leads and capture first-party data using Facebook lead forms.

Although it may require a little “outside the box” thinking to devise new ways of approaching your ad campaigns, despite the changes, there are still effective ways of targeting your audience and generating leads from Facebook. And luckily, the iOS 14.5 update also included new Memoji options. Thanks to improved facial and muscle structure, advertisers can vent their frustrations with a more expressive Memoji than ever before.

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