The New Apple™ iOS 14 Update and What it Means
THE NEW APPLE™ IOS 14 UPDATE AND WHAT IT MEANS
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Marketers are freaking out about the new Apple™ iOS 14 update due to roll out early this year – and if we’re honest, we have our concerns. There is a lot we still don’t know, but we’ll break it down for you so you know a bit more about what’s coming. If you are in the e-commerce space or running paid ads we highly encourage you to familiarise yourself with this. ⠀
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The Privacy Update
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With the forthcoming privacy update users will be able to learn about how an app uses their data. Developers will also be required to provide details on their privacy policies, the data they collect, and how they intend to use it. So far so good. I think we can all agree that we should be able to know how our data is used. ⠀
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However, apps will also be required to get permission for the person to be tracked. This happens already. But rather than opting out, users will be required to opt-in. It’s a big change in wording and accessibility. It’s safe to assume most people will opt-out. Lots of people assume that their data is being used in malicious ways. Facebook™ cops a lot of flack for this. But actually it’s just an algorithm that tries to deliver content it thinks you’ll be interested in based on what you engage with online. So if you love obscure hats, it will send you ads and posts from an obscure hat maker in a far flung part of the world you may not have otherwise been aware of.⠀
Some tracking makes sense and makes life better for users.⠀
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There are other changes, such as limiting advertisers to 8 conversion events per domain, including pixel events. An event is for things like add to cart/purchase. These events are set up to retarget consumers with images of products they, for example, added to cart but did not yet purchase. ⠀
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All of these restrictions limit the algorithm’s ability to learn and grow. Meaning that targeting will become more difficult and advertising costs will rise.
Apple’s Motivation⠀
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Let’s be honest, Apple™ and Facebook™ are two of the biggest tech companies and this war was waged a while ago.
It’s all well and good to say that as a big tech company you care about people’s privacy. But let’s be clear. Apple™ is not doing the same for their own products. They are still tracking you. You do not get the option to opt in to their own tracking. However, Apple’s revenue derives mostly from hardware products and software licences. This business model requires large upfront investment and constant innovation, but is difficult to copy (due to patents, technical capacity and talent) and creates high barriers to entry.
Facebook™ is adamant that Apple’s business stands to gain from these changes. “Apple™ is behaving anti-competitively by using their control of the App Store to benefit their bottom line at the expense of creators and small businesses,” said Dan Levy, the VP of Facebook™ Ads and Business Products.
Facebook™ has long criticized Apple’s 30% fee for in-app purchases for certain services that moved online because of the pandemic. Apple™ said it wouldn’t take such a cut through the end of 2020 and then extended that waiver through part of 2021.
Facebook’s™ Response
In a post called Speaking Up for Small Businesses, Levy claims that the “new iOS 14 policy will have a harmful impact on many small businesses that are struggling to stay afloat.”
Levy believes the changes will impact businesses in these ways:
-Force businesses to turn to subscriptions and in-app payments
-Make advertising less efficient and effective
-Cause a loss of personalisation that could result in 60% fewer website sales from ads
-That loss of personalisation could lead to a drop in revenue by 50% resulting from Facebook™ app install ads
-Make it more difficult for small businesses to reach their ideal audience, limiting growth
The social media giant has also released a toolkit of collateral for you to use with the hashtag #SpeakUpForSmall.
Levy also wrote, “Small businesses have small budgets. For these small budgets to work, they have to be targeted at the customers that matter. It doesn’t do a local wedding planner any good to reach people who aren’t planning a wedding. Likewise, it doesn’t do a small e-commerce outfit selling customised dog leashes any good to reach cat owners. Put simply, by dramatically limiting the effectiveness of personalised advertising, Apple’s policy will make it much harder for small businesses to reach their target audience, which will limit their growth and their ability to compete with big companies.”
Levy went onto cite a recent study by Deloitte, that found 44% of SMBs in the U.S. began using or increased their use of targeted advertising on social media since the start of the pandemic, and those that did were twice as likely to report increased revenue.
The fact of the matter is that, yes, this will hurt small businesses currently running paid ads.
Unanswered Questions
There’s a lot of questions we simply just don’t know, and we won’t know until the update starts to roll out. Facebook™ is scrambling to put solutions in place, but it’s safe to assume whatever strategy you are currently using will need to be tweaked. Some other questions include:
-What does Facebook™ see as a real way forward on tracking and attribution?
-What will the delay in reporting be?
-What percentage does Facebook™ think they’ll lose on tracking for ROAS (return on ad spend)?
-What is Facebook’s™ blueprint for in-app purchases?
-What you can do in the meantime
What You Can Do from Today
Make sure you verify your domain with Facebook™. Secondly, ask your ad agency how the strategy they currently implement will be impacted by these changes. Depending on whether they do micro or macro targeting, their troubleshooting will be different. If you are an app business, an ecommerce business relying on retargeting, or see much of your revenue from audience network or iOS, you will need to ask your ad agency how this change will affect you.