Ensuring digital privacy has been the hallmark of Apple’s ecosystem. Continuing its policy of user privacy, Apple introduced a lot of changes in 2021 with iOS 14 which had a massive impact on Facebook and its advertising platform.
Facebook expects revenue losses of up to $12.8 billion in 2022 alone and you can imagine the impact it is having on advertisers.
It’s been quite sometime since these changes were made, iOS 15 & 16 have subsequently been released, nevertheless iOS 14.5 has undoubtedly had the biggest impact on the digital advertising world.
But what specifically did Apple do to iOS last year that led to this huge impact on Facebook advertising ecosystem?
To put it simply, iOS 14 puts Apple users back in control of the data they were previously sharing unintentionally with apps. It limits the ability of apps like Facebook to collect and use data for key areas such as targeting, reporting, and optimisation.
Let’s dive into the details of iOS 14 and the changes that are affecting advertisers across the globe.
Apple has limited the ability of advertisers to track user activity which is vital for enhancing the effectiveness and conversion of advertising campaigns on Facebook & Instagram.
Now mobile devices don’t use cookies and instead use IDFA to facilitate app tracking activity. However with iOS 14.5, Apple has introduced the app-tracking-transparency (ATT) and turned off IDFA by default.
Users now have to actively opt-in to allow apps like Facebook to collect data. This is where it gets interesting, only 17% of the users worldwide and 10% of US users are opting in for app tracking which is seriously hurting Facebook Ads.
Due to a low number of people opting in, Facebook is getting less data from its iOS based apps which results in inferior tracking, targeting and reporting of ad campaigns leading to lower ROI for advertisers.
This is why it’s important to understand the changes in detail before considering the steps to minimise impact on your advertising campaigns. Here is how it impacts the 3 key areas of Facebook advertising (targeting, reporting and optimisation).
1. Targeting
Retargeting and the ability to target lookalike audiences is one of the most celebrated features of Facebook Ads which allows advertisers to reach their target audiences effectively and get better ROI & ROAS.
However as explained earlier, the majority of Apple users are opting out of in-app tracking which is reducing the size and quality of retargeting and look alike audiences.
This means that your ability to create targeted and personalised ads for your audience has been decreased significantly because of the recent changes.
2. Reporting
Advertisers and business owners usually use Facebook pixel conversion metrics like ROAS, CPM and CPA to determine the success of their campaigns.
However with the release of iOS 14.5, Facebook advertisers are seeing inaccurate reporting which makes it difficult for them to judge the success or failure of their campaigns thus creating uncertainty and fear in addition to making it harder to scale campaigns.
3. Optimization
Before iOS 14, advanced Facebook advertisers (cough cough) relied on the algorithm for optimising their campaigns. This would happen when the algorithm gets the conversion data from the Facebook pixel thus helping it identify and target similar people who are most likely to convert.
However due to a decrease in user data, the effectiveness of campaign optimisation has decreased significantly.
Apple now only allows advertisers to track 8 conversion events per website which means a lower number of data points for the algorithm. This especially affects advertisers and small business owners with low budgets as they’re unable to gather enough data points to let the algorithm optimize their campaigns effectively.
For the first time in the company’s history, Facebook reported a loss in the latest earnings report. The impact is not just limited to Facebook, ecommerce store owners which rely primarily on paid advertising on its platforms to drive sales are also experiencing a drop in revenue.
Facebook Ads conversion rates have decreased by 5.89% YoY. Decreasing conversion rate means a reduced ROI for the advertisers and business owners.
Fig. 1 Facebook Conversion Rate (Common Thread Collective)
The average daily CPM is now up by 21.94% within last 28 days YoY with Facebook responding by announcing they are planning on reducing CPMs in a raft of planned updates.
Fig. 2 Facebook Daily CPM (Common Thread Collective)
Why It’s Never Been More Important to be In Control Of Social Media Advertising Performance
All is not lost due to the iOS 14 update!
Changes like these will continue to happen and the advertising world will continue to shift and adjust accordingly. With the right strategy and execution, brands can still grow and thrive with social media advertising on platforms including Facebook, Instagram and TikTok.
How To Minimise iOS 14 Impact?
We’ve outlined below some of the ways we’ve minimised impact and continued to scale our client’s accounts across ecommerce and lead generation niches.
1. Prioritise First Party Data
First party data is anything that happens in app, as the platforms owns the data. We can track and measure this data and as such, it now forms an important part of the advertising strategy.
Video and engagement audiences are excellent examples of this and can be used in both top of the funnel and also retargeting.
2. Verify Your Domain on Facebook
You can verify your domain on Facebook Ads Manager to prove that you’re a legitimate business and it can help you in using Facebook Pixel Data. This makes it easy for you to select the conversion events that you want to be tracked.
3. Select 8 Conversion Events
Facebook automatically selects conversion events that will be tracked by the pixel. However there is an option of manually choose the 8 conversion events allowed by Apple in the Facebook Business Manager that are most suited for your business i.e. purchase or leads.
4. Implement the Facebook Conversions API
Since Facebook Pixel is no longer as effective in tracking data due to the update, it’s best to use Facebook Conversions API. It allows you to track data directly from the server to Facebook.
5. Condense Audiences
Audiences have been reduced with people opting out of tracking, by condensing audiences, we give the algorithm more data to match and maximise performance. This approach is especially useful with retargeting audiences.
6. Create Compelling Ad Creatives
While targeting, reporting and optimisation in Facebook can currently be challenging, nothing beats a solid creative. We advise all clients to have a creative testing framework which will help improve ROAS and ROI.
7. Third Party Tracking Software
Third party tracking can bypass pixel issues and track via UTMs and integrations with the API. We advise all clients to implement this to provide clearer insights on advertising performance across channels. Feel free to get in touch if you would like recommendations on service providers.
Summary & Way Forward
Apple will keep introducing changes and marketers will keep evolving advertising strategies and tools to get the best ROI for their customers. Platforms affected by changes such as Facebook and Instagram will also offer updates in an ongoing battle to protect advertising revenues.
IOS 14.5 has provided unique challenges to overcome however there are so many exciting opportunities arising due to latest advancement in technology, that nothing stands still for long in an ever evolving space.
We have outlined 7 recommended steps above which will help to minimise impact while providing a framework to grow your brand through social media advertising.
Please consider introducing this framework to your strategy and feel free to get in touch with any questions on this blog topic.
References:
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Ensuring digital privacy has been the hallmark of Apple’s ecosystem. Continuing its policy of user privacy, Apple introduced a lot of changes in 2021 with iOS 14 which had a massive impact on Facebook and its advertising platform. Facebook expects revenue losses of up to $12.8 billion in 2022 alone and you can imagine the […]
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