Apple’s changes – what it means for your digital marketing efforts?

Posted on March 22, 2021 under Uncategorized

How Apple’s Changes Could Significantly Limit Your Marketing Efforts 

In June of 2019, at its annual Worldwide Developers Conference (WWDC), the tech giant Apple announced policy changes that would limit device fingerprinting and impact data sharing across iOS.

The first iOS 14 version was released on September 16, 2020, but after the public response that was nothing short of messy, Apple delayed the privacy changes until early 2021. 

Given the updates that will go into effect any day now, the advertising industry has been raising several burning questions:

Can personalized ads and user privacy coexist? When do pro-privacy regulations overstep their bounds to become anti-competitive?

But the biggest question seems to be:

How exactly will Apple’s iOS 14 updates impact digital marketing?

Read on for a detailed take on how Apple’s changes may significantly limit your marketing efforts

 

Apple’s Big Privacy Changes & Their Impact On The Marketing Industry

Privacy has been at the forefront of the digital discussion in recent years, leading to discussions regarding how user data is being collected, analyzed, stored, and shared.

This privacy-focused conversation is anything but new. The EU implemented its “General Data Protection Regulation” (GDPR) in 2018, and in 2020, California announced it would enforce the newly-passed “California Consumer Privacy Act” (CCPA).

We already live in an era of consumer data protection. Apple’s iOS 14 update is nothing but the latest development in the existing digital privacy narrative – albeit one that holds enough power to reshape the digital ad market single-handedly.

Apple has long been portraying itself as the defender of user privacy and security. The changes it’s making to iOS devices – again, in the name of privacy – shouldn’t come as a huge shock. 

It’s the extent to which Apple’s proposed changes could limit your advertising efforts that seems to be the issue here:

iPhone users will now have to opt in to sharing their IDFA and allow data tracking for advertising purposes when they first launch an app that uses the Identifier for Advertisers (IDFA). They will see a pop-up that warns them about the app collecting IDFA data, along with an option to allow tracking. 

Facebook’s in-app prompt, for instance, might read something like:

“Facebook would like permission to track you across apps and websites owned by other companies.” 

Even though it’s generally a legitimate privacy-promoting move, putting the user in control in such a way – explicitly asking them to opt in to sharing their IDFA rather than disable tracking – would likely lower the percentage of tracked users. 

As a result, advertisers might not have as much definitive data to work with when creating their advertising campaigns.

That’s the short version of the story behind Apple’s iOS 14 privacy update, though. We’ll go into the details of who will take the biggest hit and how the value of advertising might decline due to these changes below. 

 

A Closer Look At Apple’s iOS 14 Updates & Privacy Changes

iOS 14 was designed as a core update of the iPhone experience. Home Screen widgets, App Library, messaging-related updates, all-new Translate app; it’s among the most significant iOS updates to-date.

However, it’s the update to the privacy policy that rocked Apple’s ecosystem and left the mobile ad industry scrambling to develop a plan B.

The overview of the iOS 14 update published on Apple’s website underlines that privacy should be a fundamental human right and Apple’s core value: 

“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.” 

iPhone users are already able to set limits on the amount of data that the apps are tracking and sharing. But in the past, they had to actively search and change the settings hidden somewhere in their phone – and many of them never bothered to take that extra step.

As part of the iOS 14 update that is expected to occur on Apple’s entire product portfolio, app tracking transparency takes center stage. Rather than burying this option somewhere in the Settings menu, it will now appear as a pop-up, front-and-center window within each app.

It will grant users the ability to block the IDFA identifier at the app level, allowing them to opt-out of targeting and tracking. How the user answers to the prompt will essentially determine whether or not their IDFA gets shared.

And no, app developers have no choice but to show Apple’s prompt and ask for permission to track users’ data as they use the specific app. Otherwise, they risk being removed from the App Store

Some, including Facebook, were quick to label Apple’s move and new tracking rules as a matter of profit, not user privacy. Either way, the side you choose to support says something about who you view as a representative of your interests in the digital landscape, be it as a consumer or an advertiser. 

 

How Apple’s Enhanced Privacy Features Will Impact Digital Marketing Landscape

Digital marketing campaigns are predominantly mobile – and mobile is primarily iOS-based:

The changes proposed by the forthcoming iOS 14 update will have a fundamental impact on the digital marketing landscape as a whole and the mobile ad industry in particular.

The effectiveness of digital advertising on platforms such as Facebook or Google relies heavily on data collection and analysis, enabled by “cookies” – data points stored on a device that can identify a consumer and their online behavior.

Such information could then be passed to advertising platforms and be used to show users the ads that might be most relevant to them and their interests.

But if advertisers are no longer able to track your online behaviors, such as previous purchases and websites you’ve visited, how can they know more about your interests? 

How can they, in turn, know what ads to show you? And will the lack of data lead to a significant drop in conversion rates? 

There are many hypothetical questions one might ask here.

However, they all point to a significant impact on digital marketing in targeting, optimizing, and tracking on iOS devices.

Targeting-wise, the implications of the iOS 14 update are clear. Given the IDFA’s central role in everything from targeting, retargeting, and personalization to analytics, it’s hard to imagine how advertising would look for users who opt-out of sharing their IDFA.

Granted, platforms such as Facebook and Google have access to other deterministic variables – email and phone number, for example – that they can use to identify devices. However, other platforms may not possess such information, meaning they will likely see a decline in targetable audiences.

The implications for ad campaign measurements and attribution doesn’t look well, either:

Mobile Measurement Partner (MMP), a third-party platform used for tracking, organizing mobile app data, and providing marketers with a unified view of their ad campaign performance across multiple channels, is built around the IDFA.

Given that the update will render IDFA useless through the opt-in mechanism, Apple proposed a replacement – the SKAdNetwork API. The idea behind this privacy-focused framework is that iOS itself takes on a central role, facilitating marketing attribution that does not contain a device ID or any personally-identifying information.

And while the SKAdNetwork API is a good attempt on Apple’s side to mitigate the problems, the conversion data sent from iOS apps would be limited in both scope and timing. 

 

Facebook Ads & The Impact Of Apple’s iOS 14 Update

Apple’s iOS 14 updates seem harmless enough – even inevitable in a world where user privacy is seen as a “trend” and a necessity. But that doesn’t make its impact on the advertising industry any less radical and disruptive.

Facebook’s colossal size and world-wide popularity allow it to track user activity across several apps and websites owned by Facebook Inc., making it an Internet advertising giant. But Apple’s recent move will limit access to the user’s activity outside the Facebook app.

As such, it would impact the effectiveness of its targeting tools, Facebook ads, and performance reporting on iOS 14 devices.

Again, the App Tracking Transparency framework requires that apps display a pop-up prompt to iOS 14 users, asking them to opt into what Apple defines as “tracking.” It’s expected that many users will opt-out given the opportunity, limiting ad personalization and performance reporting. 

Facebook addressed the impact of iOS 14 changes on Audience Network, stating: 

We know this may severely impact publishers’ ability to monetize through Audience Network on iOS 14, and, despite our best efforts, could render Audience Network so ineffective on iOS 14 that it might not make sense to continue offering it on iOS 14 in the future. 

Small businesses advertising on Facebook will likely be the ones to take the brunt of limitations posed by Apple’s updates. These policy changes can potentially make identifying and reaching the target audience harder for smaller businesses, which would, in turn, limit their growth.

Facebook’s analysis of over 25,000 global advertising campaigns makes for an excellent case in point: 

Without collecting and using their own data, the businesses running ads on Facebook’s family of apps saw a cut as drastic as 60% for every dollar spent on relevant, personalized ads. 

Facebook quickly provided resources and guidance to those advertising on the social media platform, hoping to bridge the gap between user privacy and Facebook’s ad campaigns’ effectiveness. 

The updated version of Facebook’s SDK will offer support for Apple’s SKAdNetwork API – but there is some definitive ad creation and reporting limitations you should keep in mind when advertising to iOS 14 users. 

You can observe the negative impact of the proposed iOS software and privacy updates in the following aspects of Facebook advertising: 

  • Ad Creation Limitations – When advertising to iOS users, you can associate your app with a single ad account, limited to nine iOS 14 campaigns at a time. Each one is limited to five ad sets with the same targeting, scheduling, optimization, and placement type.
  • New Delivery Statuses – Facebook introduced new delivery statuses to Ads Manager that apply only to iOS 14 campaigns. “Updating Limit” and “Pending Limit” apply to app campaigns, while “Unsupported Event” and “Setup Error” apply to web event conversion campaigns. “Updating Events” applies to both.
  • Reporting Limitations – Real-time reporting won’t be supported; data could be delayed by up to three days. Delivery and action breakdowns won’t be supported on the app and web conversion events, either. iOS 14 requirements will also change account attribution window settings; a 7-day click attribution window will be set as default.
  • Targeting Limitations – If iOS 14 users elect to opt-out of Facebook’s tracking through the prompt, it would severely diminish the effectiveness of full-funnel targeting, the ability to create hyper-personalized ads, and the size of your retargeting audiences. 

 

Industry-Wide Response To Apple’s Privacy Policy Changes On iOS 14

When Apple first announced product and policy changes at the annual Worldwide Developers Conference (WWDC) event – changes that would impact data sharing across iOS – it sparked an industry-wide response.

Facebook, the world’s biggest social media platform, quickly criticized Apple’s privacy policy updates on iOS 14.

In the response that followed the announcement, Facebook said that they support the proactive, take-charge approach to privacy and data transparency but disagree with Apple’s proposed iOS changes.

Facebook then warn how the limits this update places on advertising would affect the ability to effectively target, reach, and engage iOS users on mobile devices and across the web. 

They don’t expect that Apple’s attempt to interfere with the online ad ecosystem would lead to a total loss of personalization. However, they warn about the impact on ad performance, increase in cost per action, and effective personalization.

Facebook continued this public attack on Apple’s forthcoming iOS privacy updates with a series of full-page newspaper ads. These ads appeared in the Washington Post, New York Times, and The Wall Street Journal, featuring a hard-to-ignore headline: 

We’re standing up to Apple for small businesses everywhere.

It’s not the first time that the two tech giants have butted heads in recent years – and likely won’t be the last, either.

But Facebook wasn’t the only one to push back following Apple’s announcement. The marketing industry has raised its concerns about the seismic changes implied by the iOS 14 updates – and the lack of precise guidance.

Global marketing professionals sent a letter to Apple’s CEO, Tim Cook, welcoming transparency and customer-centricity of the new features while noting that they have strong reservations and concerns about the proprietary IDFA opt-in pop-up.

It wasn’t until Apple received a slew of complaints from marketers and app developers that they decided to postpone the enforcement of these changes from September 2019 to early spring of 2021. 

 

Digital Marketing In A Post-IDFA World

Hard limits on the kind of user data advertisers can collect, how they can store it, and what they can do with it are necessary – crucial, even.

But given how Apple’s changes may significantly limit your marketing efforts, it’s normal to wonder about the extent to which one company can single-handedly shake the entire industry to its very core.

The enforcement of Apple’s IDFA changes, scheduled for the spring of 2021, will be a significant turning point for many businesses in the online space. Companies that are unable to adapt and move forward by aligning with where the privacy standards are already headed might not have a future in a post-IDFA world.

How will your business adapt its Facebook advertising strategy to comply with Apple’s changes? 

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