Are you curious about the impact Apple’s iOS 14.5 App tracking transparency update will have on your Facebook conversion data?
With approximately 60% of devices in the United States running on iOS, this update could impact your reporting and results significantly.
Apple’s privacy update allows users to select whether they would like to be tracked or not. Facebook is accusing Apple of hurting their business growth, by limiting the data available for marketers to use.
It is no surprise that getting Apple to reverse this decision is not an option, so marketing professionals are going to have to adjust. Below we walk through what to expect and the potential impacts on Facebook Ads from the iOS14.5 update.
Apple’s iOS 14 Privacy and Data Use Update
The update controversy focuses on:
- SKAd Network
IDFA- Identifier for Advertisers
Beginning with iOS 14.5, iPadOS 14.5, and tvOS 14.5, applications (like Facebook, etc.) will need to receive the user’s permission through the AppTrackingTransparency (ATT) framework to track them or access their device’s advertising identifier. This Identifier for Advertisers (IDFA) is a specific Apple ID unique to each device and is consistent across a single user’s applications. This is known as the Google Play Services ID on Android devices.
These IDFAs allow apps to track, target, and personalize in-app advertising. Tracking refers to the act of linking user or device data collected from your app with user or device data collected from other companies’ apps, websites, or offline properties for targeted advertising or advertising measurement purposes. Tracking also refers to sharing user or device data with data brokers.
Quick Tip: Think of IDFAs as the cookies-to-browsers that allow you to proactively track, target and personalize your advertising efforts.
The SKAd Network refers to how Apple’s software development kit (SDK) interacts with advertising. After iOS 14’s been updated, app installs as the result of in-app advertising will then be mediated by the SKAd network.
In the future the SKAd Network will offer click-through attribution for:
- Publisher ID
- Campaign ID
- Conversion Value
It will not include view-through attribution for applications and click-through attribution for browser, email, and external ads. These changes mean Facebook will have less insight into the apps their audience use, and that lack of knowledge will extend down to eCommerce advertisers using that platform.
ATT- App Tracking Transparency
Apple’s update is giving its users the option to let applications track their info, or to opt out. A universal prompt to users will appear as below:
Examples of tracking include:
- Targeted advertisements based on user data collected through apps and websites owned by other companies.
- Sharing location or email lists with a data broker.
- Sharing IDs with third-party advertising networks.
How Will iOS 14’s New Policy Affect Facebook Advertising?
In understanding how this new update will affect Facebook advertising, we look to the past. Some of you may remember when iOS 13 was introduced, there was a prompt asking users where or not they would like to share their geographical data “with apps when they’re not in use.”
This lowered geographic information data from 100% to below 50%. That’s a big drop.
Facebook’s statements reflect similar projections: “In testing, we’ve seen more than a 50% drop in Audience Network publisher revenue”; and, “Our studies show, without personalized ads powered by their own data, small businesses could see a cut of over 60% of website sales from ads.”
These changes mean Facebook will have less insight into the apps their audience use, and that lack of knowledge will extend down to eCommerce advertisers using that platform.
Facebook relies heavily on understanding user’s behavior – i.e. – places they shop, things people look at before and after purchasing products, the food they like, where they work, websites they visit, places they eat, friends they are connected to, things they are interested in, etc. All of this data is used to build a profile around users. These profiles are used to target similar groups of individuals as defined by interests and behavior that are setup via Ads Manager:
Advertisers are aware of the “learning phase” when trying to optimize ad sets. Advertisers work hard at getting through the learning phase so Facebook has enough purchase data and can deliver ads to the right audience at the right time. This will likely alter that learning phase drastically and make it harder to get through that process since the amount of data they are collecting is going to become a lot more limited.
This is an expected drop in data collection and information available to Facebook for use in personalized advertising. While these changes will likely hurt Facebook’s data stores, and therefore their wallet.
Regardless of the messaging from Facebook’s PR teams would have you believe, we want to help your business to continue and excel in online advertising. Let’s explore how we can do this to prepare yourself before the IOS 14.5 update rolls out.
What Do You Need to Do as an Ecommerce Brand to Prepare?
You have likely been preparing for this day since the announcement back in 2020 that they would be implementing privacy measures. However, if you have not, here is a reminder of the things you need to do ASAP:
a. If you purchased your domain from Shopify, this can be done by going to your Shopify admin and selecting Online store > Domains > DNS Settings.
b. If you used a third party site to register your domain (GoDaddy, Domain.com, Name.com, NameCheap, BlueHost, etc.) you need to do the following:
1.Log into your domain registrar and go to the DNS records section (usually under the Manage DNS).
2. Add a new TXT record in your DNS configuration using the Facebook verification:
3. Add @ in the Host field (if your domain host requires it)
4. Wait for the DNS configuration changes to be made on your website’s domain servers (this could take up to 72 hours), then click Verify.
2. Set up your eight events in Aggregated Event Measurement in order of importance. Go to Events Manager > Data Sources > Aggregate Event Measurement.
The eCommerce events you can track are:
- Add to cart
- Email Leads
- Ad Engagement
When you click the Edit Event button, like in the example above, you will see a prompt that notifies you that once Apple IOS 14 updates roll out, if you try to change the Events it could take 72 hours or longer to update in Facebook. The biggest issue is that any ads running will be paused while the events update.
If you have not gone through the verification and setting up the eight events in aggregate events manager in order of importance, you need to do that ASAP.
One you have gone through the process as outlined above, there are some additional things you can do to minimize the impact of the IOS14 update once it has launched with the 14.5 update.
Leverage Email Capture Solutions
Leveraging email capture solutions to build an email list is going to become more valuable as a way to have a strong remarketing audience for your business.
Depending on your industry, email marketing is already an incredible marketing channel for an eCommerce business. According to one study done in 2019 by DMA, every $1 spent on email marketing can generate $42 in return. The ROI on email marketing is massive. It not only contributes to an increase in sales, but it also plays a large role in customer retention and repeat purchases.
This already valuable channel is going to become even more important for your paid Facebook and Instagram ad performance. You will need to use your email lists to build remarketing, lookalike, and other interest-based audiences for your paid social ads to be highly effective.
Here are some tried and true email capture solutions:
End of Content Pop-Up
Users that visit your site decide whether to subscribe or not to your site after reading your content. Triggering a pop-up at the beginning of the user’s experience can immediately turn them off to your site, allowing them to read the content they came for before being asked to subscribe can leave the user with a more positive experience.
Plan to have a pop-up appear when a user signals they are about to exit. When the user is about to close the browser, a pop-up will encourage a user to stop and see what popped up. Although many people hate pop-ups, they are still effective, why? Pop-ups are becoming more sophisticated and personalized. According to omnisend, these personalized pop-ups have been shown to increase success rates from 1.9% to almost 8%
Page Scroll Pop-Up
A subtle way to capture an email address is to slide a request for a user to subscribe once a user scrolls to a set location of a page. The pop-up can slide in from a corner making it a quiet entrance.
Tools to consider:
Slide-In, a simple marketing tool that allows you to build messages that slide in at the exact moment you select. (WordPress Plugin)
Sleeknote, a paid tool that allows you to place a popup promoting eBooks, content, and discounts at the exact moment you please. (WordPress Plugin)
Top Bar Subscribe Notice
A simple bar that sticks to the top of the screen as you scroll with a subscription note will remain in the user’s sight at all times as they browse your site. While this feature is beneficial, it can be even more effective when you use this tool in addition to other pop-ups.
A recent study from Omnisend found that sites that incorporate multiple pop-up features are most successful at list building. More specifically, they found that an immediate pop-up was successful at fast list building, exit-intent and after-few-clicks were successful in engaging visitors to purchase your products, and top bar subscriptions will consistently add to your list building efforts.
It seems that you should use different ones depending on what you want to achieve: an aggressive immediate pop-up for faster list building, or exit-intent and after-few-clicks pop-ups to convince engaged visitors to purchase your products.
Homepage Capture Form
If you are opposed to setting up popups for fear of causing a bad experience with your web visitors, simply include a section on your homepage (or pages on your site that drive a lot of traffic) where people can put in their email addresses in order to get updates about product launches, discounts, and other exclusive offers.
There are numerous popup solutions for Shopify sites that allow for customization with how and why the popup gets triggered.
Switch to a 7-day Reporting and Attribution Window
As of January 19th, Facebook has updated the reporting window to the new default 7-day click and 1-day view attribution window. Before the switch, they were using a 28-day click and 1-day view. This is not a massive change since many businesses look at the 7-day click already to understand how things are performing.
We anticipate that companies can expect to see a 10%-40% reduction in conversions with this default change depending on how you build your lists for retargeting site visitors. If you rely heavily on Facebook to build you audience lists’ then you will likely feel the impact a lot more.
You will be able to show the attribution setting defined on the ad set level under Optimization & Delivery. Now conversions in your reporting will match the conversions being used for optimization.
If your campaign was completed by January 19th, it will still show the default reporting window prior to this change. You can add an Attribution Settings column to properly identify what attribution setting you are looking at in Facebook Ads Manager.
Facebook will adapt to the iOS 14 Privacy Update, and will only report on a max 7-day post-click and 1-day post-view attribution model. Companies need to make this change today if you have not already. You will better understand how to optimize your campaigns with the given information moving forward in your advertising.
FB Attribution Update: Attribution Setting is no longer available in your account level settings, which was – Facebook Ads Manager > Ad Account Settings > Attribution. You can change your attribution setting during campaign creation.
In addition to the 7-day click 1-day view, Facebook is changing how purchases are being reported. Here is where things start to get messy. Facebook has historically attributed purchases to the date of the last ad interaction. Meaning, if someone clicked on your ad on Saturday and then bought it on Monday, the purchase value would show up on Saturday’s ad performance. This is where delayed attribution comes into play.
Now, Facebook will be attributing purchases to the same day, making delayed attribution no longer a thing. That means all of your historical data and reporting is now obsolete.
Bottom line, you have got to get better at targeting an individual when they are close to purchasing and get them to buy quickly.
Understand Customer Acquisition Cost
Customer Acquisition Cost (CAC), can be calculated by dividing all the costs spent on acquiring more customers by the number of customers acquired during the time the money was spent.
For example, let’s say your marketing budget for a given year is $1,000 and you converted 250 new customers. You would divide $1,000 by 250 new customers and get a total CAC of $4.
It is important to address a few caveats about using this metric before you apply it. We will break down top-of-funnel advertising expectations versus bottom-of-funnel expectations.
Top of Funnel Advertising CAC
It is crucial to identify what stage in the marketing funnel your advertising audience may be in. Individuals that are at the top of the marketing funnel may require more advertising touches before they are willing to convert. This may directly impact CAC.
Bottom of Funnel Advertising CAC
Customers that are at the bottom of the marketing funnel have performed research, compared competitors, and ready to purchase. Acquiring a customer that has already been educated is extremely valuable, and can result in a much lower CAC.
The iOS 14 Privacy Update will reduce conversion tracking in Ads Manager. As a result, this will lead to an increase in cost per acquisition.
Understanding this, you need to not rely solely on Facebook to report on the success of your ads.
Use additional tracking via Google Analytics, Adobe Omniture, Core Metrics, etc. to better understand how your ads are doing. This seems like you should be doing it anyways but with large ad budgets comes a lot of ads so it becomes difficult to make sure tracking parameters get set up with every ad under every Ad Set.
It is recommended that you track performance using UTM tracking codes in order to have a better picture of how your Facebook ads are performing. Here is how to do that using Google Analytics.
UTM Tracking Codes
First, let’s recall the social media platforms and how they include built-in analytics. These help users track likes, shares, and click-throughs to your website. However, you don’t get the full picture of how traffic flows to your website.
In 2017, most Fortune 500 companies say they can’t prove social media marketing brings in new customers. This is concerning. What are some of the ways these companies have grown more confident in their customer tracking? Let’s take a look.
Because this data is invaluable to the success of your business, how can you truly track and prove where new customers are coming from? UTM parameters.
UTM parameters sound more technical than they really are. They are short text codes that you add to all the links in your social posts. In return you get three key benefits:
- Track the value of social marketing programs and campaigns.
- Precise data on where traffic and conversions originate.
- Test individual posts head-to-head (class A/B testing)
Use UTM Tracking Codes with Google Analytics
Google makes UTM tracking easy! You can use Google’s free URL builder to generate tracking codes. I will break it down into 5 easy steps below.
- Properly install Google Analytics on your website.
- Visit Google’s free URL generator.
- Generate a unique URL.
- Use your unique URL instead of your website URL.
- In Google Analytics go to Acquisition > Campaigns to measure the results of your unique URL.
You can create goals within Google Analytics to also capture conversion information for custom URLs.
Below is a breakdown of how to use Google’s free URL generator.
All marketers will feel the impact of the iOS 14 Privacy Update. Good thing marketers are fairly used to things being shaken up every now and again. Striking the balance between marketing and privacy is difficult but with a little creativity, marketers can accomplish their goal.
With the proper preparation and changes, you can weaken the impact of the update and you can take the necessary actions to ensure your advertising efforts are successful.