Back in June 2020, Apple announced it would be making some substantial changes to how iPhone’s collect your data. The changes include enabling people to share an approximate location (instead of a precise one), adding summaries to the App Store that explain what data each app collects, and requiring third party apps to ask users before sharing their data.
Facebook swiftly responded to these changes with displeasure, specifically taking issue with the consent driven data sharing. By requiring iPhone owners to grant apps explicit permission, Facebook fears the possibility that most users will block them from collecting detailed information. Facebook uses that data to build out detailed profiles that they market to advertisers (including both small and large businesses).
The type of data sharing that is specifically being referred to is IDFAs (Identifier for Advertisers). IDFA’s are unique identifiers for mobile devices and are used to target and measure the effectiveness of advertising on a user level across mobile devices. Currently, about 70% of IOS users share their IDFA with app publishers, after this change it’s estimated that this number will drop to 10% to 15% (source). Currently, users can opt of data sharing, but it’s a buried feature that you have to search out.
If people are blocking Facebook from collecting their data, the value of advertising on their platform may significantly decrease. And with it, Facebook’s revenue may take a severe hit. In 2019, about 98.5 percent of Facebook's global revenue was generated from advertising, whereas only around two percent was generated by payments and other fees revenue (source). Much of that revenue is generated by small to medium sized businesses who count on social media advertising as an important part of their marketing strategy.
It’s important to note these changes aren’t specifically targeted at Facebook – they’re simply one of the biggest companies that may suffer and the company that’s made the most noise about them. The fact of the matter is that every third-party app will have to ask your permission before tracking you.
What does the timeline for these changes look like?
Apple originally outlined these changes in June of 2020 in anticipation of a Fall 2020 rollout. The changes were delayed and in December 2020 the pushback from Facebook intensified.
The changes will begin to take effect as users install or update to the new iOS. When you install those updates a prompt will appear alerting you to opt-in or opt-out of the sharing of this information.
How did Facebook respond?
These latest changes are only the most recent development in a tense relationship. Apple and Facebook have been fighting for years, with their CEO’s often aiming comments at each other (more on that here). In December, Facebook launched an all-out offense campaign to try and combat the proposed Apple changes.
They announced their displeasure on the website/app, took out print ads, and created a subsite for business owners to “voice their displeasure.” Instead of focusing on the potential loss to their own ad revenue, the focus of their latest campaign is that they’re sticking up for small business owners.
The messaging on their website reads:
Here’s what’s at stake with the iOS 14 update.
Apple’s policy could limit your ability to use your own data to show personalized ads to people who are likely to be interested in your business. Now that 44% of small businesses are turning to personalized ads to adapt to the outbreak of COVID-191, this update will be especially hurtful to small businesses in already challenging times.
Apple’s iOS updates make it harder to reach current and future customers.
Measurement of campaign performance will be disrupted, making it harder to determine the effectiveness of ads.
How will this affect my business advertising?
If you rely heavily on Facebook advertising to meet your regular sales goals, there’s a good chance that these updates will impact you. After all, the personal information that Facebook collects is what allows you to target customers with creepily specific ads. Apple allowing people to opt out also ups the chance that people will see ads that are less relevant to them.
Most major platforms are still working through exactly how they will address these major changes – but Facebook confirmed they will not collect IDFA’s on their own devices and will begin updating their SDK to support the SKAdNetwork option. More on that here.
In the immediate future, your advertising may be impacted in two major areas:
Retargeting: Retargeting to users will no longer be possible for people that have opted out. Platforms like Google and Facebook can still identify users through information like their email or phone number, but other platforms will see a drastic reduction in targetable audiences.
Measurement: Ad measurement is built around customers IDFA identifiers – and while Apple has announced a replacement API that will allow for conversion data at the campaign level, there will still be a reduction in the reliability of the data.
What should you do?
As a consumer, we like that Apple is protecting our data and paving the way for further consumer protections to be enacted. As a digital advertiser and social media company, we understand why business owners are frustrated. But don’t let frustration paralyze you!
Now is the perfect time to revisit and revamp your social media advertising strategy. Invest some time into thinking through how these changes might negatively impact your customer acquisition numbers and shift your strategy accordingly.
Hue & Tone Creative: Your Social Media Partner
Not sure what shifting your strategy looks like? Reach out – we can help you create a plan to handle these changes and to futureproof your strategy for future changes. From content creation to analyzing your reach, we’re your partner in everything social media related.
