By Bob Brady
Remember the date of April 26, 2021 – it’s the day that Apple put more power (and of course privacy) in the hands of its users when it comes to being tracked on their apps, such as Facebook.
It’s also marked day that many businesses, marketers, advertisers and communications would have to start rethinking how they should best spend advertising dollars on Facebook.
In the simplest of terms, when Apple released its iOS 14.5 update, it gave people the opportunity to opt out of being tracked and having their data shared by and between their apps. It may not sound bad for the iPhone or iPad user, but the App Tracking Transparency (ATT) which asks users for permission to share data, will have an impact on a company’s ability to advertise to its target audience.
In addition, companies could see a drop in ad revenue, including Facebook which in 2020, received nearly 98 percent of its global revenue from advertising.
And this is a lot of money – more than $84 billion.
It’s also estimated that the majority of 10 million active advertisers on Facebook are small businesses, who, in general, have limited capabilities to reach their customers.
But back to the sharing of personal data. That’s an important part of this iOS update because overall, anyone who uses an Apple product with an iOS 14 update can say “No” to being tracked and sharing data, which will reduce the ability of advertisers to optimize ads.
Location-based targeting is a prime example of the type of advertising that relies on this data-sharing.
It also means that conversions (completing a form or making a purchase) made by any users who opted out of being tracked, won’t be tracked. So, measuring overall success of campaigns will be harder.
The overall level of impact varies across the board for organizations that advertise. Some experts estimate that only between 5% and 20% of users will opt-in for apps to share their data. This varies by industry of course, with financial and health related data expected to be on the low end.
Since the new iOS only came in April, Facebook and advertisers are still looking at various ways to overcome the new ad challenges posed by Apple.
Until they do however, an important question that needs to be asked by companies is if it is still worthwhile to advertise on the social media platform.
It depends, but we do know that advertising dollars need to be spent smarter, and there needs to be a clear understanding that the value of ads may not be as high as it once was on Facebook. It could even mean that companies need to spread the wealth and look for other advertising opportunities outside, but possibly in addition to, Facebook.