How the Apple iOS 14 Update Will Impact E-Commerce Marketing (It's not good news...)
Apple usually releases around 10 IOS updates every year, with updates typically being insignificant and often going unnoticed. Apple’s recent IOS14 is different.
This is because Apple has finally released their App Tracking Transparency (ATT) feature. The feature was announced as early as 2020, but it has taken two years to finally be implemented. This is due to pushback from large advertisers such as Facebook.
The pushback came because Apple’s ATT feature will mean apps that collect data through Apple’s ID for Advertisers (IDFA) feature will now warn iPhone users that their data is being collected. More importantly, it will offer the option for users to choose whether apps are granted access to their data or not.
So what does this mean? Well, IDFA is what Apple uses to identify people through their mobile devices. It is used to target and measure ads. With user’s now being able to opt out of their data being collected, the IOS14 update will impact how companies such as Facebook are able to process and receive conversion events from tools such as the Meta Pixel.
What Does This Mean for E-Commerce?
E-Commerce stores heavily rely on Meta’s pixel to optimise, target and report on web conversion events. The introduction of IOS 14 will limit an eCommerce store's ability to both personalise ads, target ads and look at performance reports for both web and app conversion events.
With 19.7 million people in the UK owning an iPhone( 40.4% of all UK smartphone users), the implications of this are severe.
For iPhone users that choose to opt out of their data being tracked, only general ads will be shown and they won’t be tracked when they click on an ad and leave Facebook to arrive at your website.
Let’s take a look at how this could impact digital marketing. Ad campaign's in eCommerce often follow a structure such as:
Step 1: Ad campaigns are pumped out to Facebook/Instagram targeting a specific ‘larger’ audience.
Step 2: People start to click on the ad and are redirected to your website.
Step 3: You, the eCommerce store, collects data regarding who is clicking on the ad, when they arrive at your website, who is clicking on what products, who is converting, etc.
Step 4: You retarget more personalised ads to those that viewed products but did not make a purchase.
Step 5: You make a more refined audience based on the analytics of the first campaign.
Step 6: You pump another campaign out to Facebook targeting a more specific audience that is more likely to convert.
I am sure most marketers would agree that the most ROI on ad spend is achieved from steps 4 and 6. This is where you are targeting a higher value audience who are more likely to convert.
IOS14 will mean this will not be possible on as much as 40% of all audiences.
Essentially, marketers' ability to target a more relevant audience that’s more likely to be interested in your product will be limited.
The updates will be particularly damaging to smaller eCommerce stores. Facebook believes that targeting abilities help smaller eCommerce stores get better results with smaller budgets. With Deloitte reporting that SME’s that leveraged targeted ads were twice as likely to report higher revenues, they could be right.
Key Takeaways on How IOS14 Will Impact Facebook Ads
The following are expected across Ads manager, Ads reporting, and Ads Insights API.
Delayed Reporting: Real time reporting is not supported and data may be delayed up to 3 days. Conversion events will be reported based on the time they are reported to Facebook and not the time they occur. Web events will be recorded based on the time the web conversion event occurs and not based on the ad impression.
Estimated Results: Facebook will rely on statistical modeling aggregated at the campaign level to account for some conversions.
No Demographic Breakdown: For both web and app conversions, demographic breakdowns such as age, gender, religion and placement are not supported for delivery and action events.
As more people download IOS14 and opt for their data to not be tracked, the size of your App Custom Audiences, Website Custom Audiences and Facebook App Connection Audiences will decrease.
You will likely need to opt for alternative targeting strategies such as:
What is Facebook doing about the IOS14 update?
As you can imagine, a lot of apps weren’t best pleased about the IO14 update. But Facebook/Meta had the most to lose. Meta owns two of the largest advertising platforms in the world with Facebook and Instagram. Meta’s Pixel, as mentioned above, is widely used in analytics across the vast majority of eCommerce platforms.
We mentioned earlier that Facebook was pushing back the release since 2020. They believe that Apple is “behaving anti-competitively by using their control of the app store” and in doing so, are particularly impacting small businesses. They are standing by small businesses and their use of personalised ads to bring free content.
Facebook said that they will be working with industry bodies that includes the World Wide Web Consortium (W3C), the Partnership For Addressable Media (PRAM), and the World Federation of Advertisers (WFA) to develop and implement standards that will continue to protect users privacy but in a way that keeps content free and allows businesses to grow.
However, it doesn’t look like there is much Facebook and Industry Bodies can do to stop Apple and the ATT framework - at least for the foreseeable future.
To help advertisers, Facebook has set up the Aggregated Events Manager. It is a protocol that was specifically designed to address the IOS14 update. It allows for measurement of web and app events for people using IOS14 or later. However, it is limited to eight conversion events that can help improve conversion optimisation and relies on statistical modeling which provides nowhere near the same accuracy as ad reporting did pre-update.
It could be said that digital marketing was almost made too easy by the likes of Facebook. They provide you all the tools and analytics to target customers specifically without too much effort on your end.
That's not to say digital marketing is easy but it sure was helped a lot by everything Meta's pixel can do and the ability to learn from the data captured by Meta's pixel and create much more targeted ads.
Now a large proportion of people are potentially going to be removed from such analysis, digital marketing is going to get a lot harder. Yes, you can rely on the dataset from non-iPhone users but having a large proportion of data missing from hypotheses will mean your ability to effectively target ads and learn from ad campaign will inevitably be negatively impacted.
It is more important than ever to capture user's email addresses and data about them. Tool such as Bazar's customer insights solution can capture user data such as demographics, awareness of ad campaigns, social media platform usage etc. at the customers will. The rise of zero party data is only going to get more and more significant in the coming years.