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Caught in the Crossfire: Apple vs. Facebook Disrupts Social Media Advertising and Signals Long-Term Change

By Bryan Noguchi

Challenge & Summary:

Changes to app privacy settings on Apple iOS 14 devices may severely impact how advertisers are able to target and measure advertising effectiveness on social media platforms. Brands and marketers are going to take a short term hit on conversion rates, cost-per metrics and retargeting efficiencies and should prepare to lower performance expectations across these and other key metrics.

This is as an opportunity to assess and redefine what targeted paid media can do, how we set objectives and success metrics, and to invest in solutions that address an evolving advertising future.

The Situation: 

Beginning in the spring of 2021 Apple will implement “App Tracking Transparency” across all iOS14 devices, prompting users to “opt-in” to data tracking across all apps they currently have installed. Announced by Apple in 2020 as an aggressive commitment to user privacy, its launch was delayed amid an immediate and public protest from Facebook that indicated it could be detrimental to small business advertisers, and potentially devastating to ad revenue.

Until now, iOS device users have been allowed to “opt-out” of tracking via a convoluted process that resulted in an estimated 15-30% of iOS devices not being tracked on Facebook and other platforms.

Marketer and industry expert opinions vary, but the switch to tracking consent to as an “opt-in” choice may render as many as 70% or more of Apple device users un-trackable on Facebook and Instagram. Currently, iOS devices may account for about 50%-60% of the users of these two platforms in the United States.

Despite its protestations, Facebook has recently been preparing itself and advertising partners for the change. Confusion across the industry and within Facebook is widespread, with adjustments to the ad management platforms evolving in real-time.

Known and Anticipated Effects:

The impact on advertisers will be governed by two factors which are still not well quantified:

  • Though Facebook/Instagram have indicated that changes to its ad platform will be global (applied across all advertising instances regardless of device OS) it is not currently clear if responses from other social ad platforms will also be global or limited only to addressing the absence of iOS device data.
  • We don’t yet know how many individuals will opt in to tracking nor how quickly this will occur.

We can assume the following impacts across all platforms that have historically leveraged Apple’s IDFA (mobile device tracking ID):

  • View-through data (i.e., user was exposed to an ad, did not click, but arrived at destination at a later time) will no longer be available
  • Ad retargeting and lookalike audience modeling will no longer work for targets who have not opted in to tracking
  • Ad personalization may be unavailable for iOS devices
  • Ad frequency capping may not work for iOS devices
  • Targeting based on geography and demographic should still be possible, but reporting based on these factors will no longer be available for view or click-based actions
  • On Facebook and Instagram Specifically:
    • Click conversion window reduced to 7 days
    • Conversion events at the domain level only, limit 8
    • Potential reporting delays of 1-3 days (app install campaigns, or if changes to optimization events have been made)

What does the future hold?

This Apple/Facebook showdown is the first in a series of actions likely to occur over the next 12-18 months. How the Android platform and Alphabet/Google will respond or if they have similar plans of their own is still unknown.  Google’s planned suspension of third party cookies on the Chrome browser in late 2021 or early 2022 already had advertisers and agencies planning for increased targeting and measurement blindness.

Regarding iOS14, clients and programs that are reliant upon direct-click measures, or are focused primarily on key, front-end engagement measures (shares, likes, views, etc.) may experience very little disruption.  We should nonetheless expect to see incremental decreases in volumetric measures (view-based arrivals, conversions, etc.) and incremental increases in certain “cost-per” metrics, particularly those concerned with desired conversions (CPA, for instance.)  As adoption increases, these trends should grow as more and more users decide not to opt in. Ideas Collide anticipates that worst case declines/increases may manifest as a roughly 35%-45% negative impact across key metrics on some platforms.

In 2021, across all paid social channels, we anticipate:

  • Reduced ability to directly tie conversions to digital and social ad exposures
  • Fewer capabilities around retargeting and custom audience segmentation
  • Declining traffic quality – lower propensity for conversion to desired actions
  • Lower reliance upon view-based conversions or actions and shorter attribution windows
  • Increasing audience dissatisfaction with ad experiences – low context, low-relevance, high frequency ads
  • Growing pools of “organic” and “unattributed” site visits and conversions – it’s important to realize that we’re still going to be able to reach iOS device users, we just won’t recognize them when they visit or take action.

2021 is an opportunity to honestly assess what certain media can do for us: we need to start investing our budgets based on what these channels are actually good at and not simply in what could once be easily quantified and reported upon. And there are things they’re still going to be good at:

  • Reach – there are still hundreds of millions of individuals on the platforms – we’re just going to have to be more mindful of their wishes and how we do or don’t leverage their personal data
  • Engagement – good content will still garner positive things for our brands: content (not quantity, not eyeballs, not conversions) is king.
  • Traffic – the social platforms are still going to be a strong source of cost-effective traffic, though the back-end quality will be harder to assess
  • Advocacy – the people who choose to engage with us have the potential to be our best amplifiers: it will be up to us to make sure that we set up equitable value exchanges for their affinity

Let’s leverage the strength of our brands to maximize the best that our paid channels have to offer. Let’s focus on establishing 1:1 relationships via email collection, and securing the permissions we need in order to garner real value from them. The keys to this will be a dedication to valuable content, transparency, and the establishment of trust.

We want our audiences to think, laugh, and share. Our content must be stronger than ever – purpose built with the aim of growing and engaging brand communities.

Our targeting must be based on insights gained outside of the platforms and married to and contextualized through compelling creative ideas.

2021 is forcing our hand: iterations of the naïve notions that a-click-equals-a-visit-becomes-a-sale are simplistic and convenient fabrications of a fictional universe that we need to abandon immediately.

Resonance lives at the intersection of creative and media, and it absolutely can manifest itself in bottom line success.  We must dedicate ourselves to establishing that connection and explore the use of advanced algorithmic attribution to properly assign credit where it is due.

It’s time to take a step back and take in the totality of our activities and examine how they collectively contribute to success. It’s messy. It’ll be complex and seldom crystal clear. But—we survived 2020, so this should be totally achievable!

*Leslie Cole and Alex Morgan contributed to the development of this blog post.