Here’s What We Know About the iOS Update
May 14, 2021
Tech giants Apple and Facebook are amidst a privacy war. Apple has just released an update that gives individual users the option to share their data with third-party apps (like Facebook, Instagram, and more) or not, which would affect targeting abilities of ad networks, which in turn endangers ad revenue. Facebook commands $86 billion in ad revenue annually, and they’re undoubtedly peeved by the hit to their earnings. If you’re craving a deep dive, check out this great breakdown at CNet, but in summary, Apple argues that users should have as much control as possible, and Facebook claims that while Apple says this move comes out of empowering the consumer, it is really just trying to squeeze out the competition.
We’ll have to wait to see how a lot of this shakes out. Streetsense works with a number of clients that invest in social media advertising. At the moment, here are the top three things on our minds about the iOS update:
The effects of the update will heavily depend on what percentage of users actually change their privacy settings. We’re about to see just how many people care enough about their own privacy to take action, and how successful both Apple and Facebook’s respective messaging campaigns will be.
As we currently understand the update, the changes will certainly affect these two key areas:
– Retargeting: with more social and web users opting out of sharing their data, advertisers will miss out on a segment of people that may have previously expressed interest in a product, service, or website. For example, if 10 people visit a website, but only 4 consent to sharing their web activity, follow-up marketing efforts will only be sent to those four users. Prior to these changes, advertisers would’ve had the opportunity to send that messaging to all 10 users.
– Measuring performance through pixel events: pixel events allow advertisers to see what types of actions users take on the website. For example, we can track key events like an “Add to cart” click or a form submission. Once users opt out of sharing their data, we will no longer have that window into these on-site conversions.
The good news is that this doesn’t necessarily move the needle negatively for most brands.
That said, it’s likely that we’ll see increased costs to advertise on Facebook because ad CPM (cost per 1000 impressions) will likely rise, as our lower funnel audience sizes (retargeting and other custom audiences) decrease in size.