30-second summary:
- In light of the iOS 14 update, Apple CEO Tim Cook emphasized the importance of responsible data usage, and that advertising can be successful without collecting vast amounts of personal data
- Many brands have become heavily reliant on platforms such as Facebook for data collection and measurement, but this is not a sustainable strategy
- Brands that have diversified their measurement strategies and prepared to be independent of third-party cookies will be less affected giving them a vantage point as competitors struggle
- The best solution for brands is to focus on independent measurement and attribution, using only the data that customers are willing to share and have permission to use
At the recent 2022 IAPP conference in Washington, D.C., Apple CEO Tim Cook commented on the importance of responsible data usage in technology. “Those of us who create technology and make the rules that govern it have a profound responsibility to the people we serve,” he said.
Many brands have become heavily reliant on platforms such as Facebook, which possess large quantities of personal data, to drive customer acquisition. However, it is not wise to solely rely on such platforms for measurement of performance.
Brands that have acknowledged this and made efforts to diversify their measurement strategies are better equipped to handle the impact of iOS 14 on Facebook’s data collection and the subsequent effect on attribution.
How is iOS 14 different from previous Apple updates?
The recent implementation of iOS 14 requires all apps to present an App Tracking Transparency prompt (ATT) to users, which requests their consent for the collection and sharing of personal data, as well as the tracking of their activity (Read more...) the app and mobile web. This has a significant effect on the use of Identifier for Advertisers (IDFA) for tracking, which is how advertisers identify individuals using Apple devices, as well as Facebook’s 3rd party cookie solution.
As a result, there are restrictions on Facebook’s ability to track user activity after clicking on an advertisement for users who opt out. This poses significant challenges in terms of measurement and audience-building for Facebook.
Additionally, the change has a direct impact on revenue, as Facebook will not be able to determine the effectiveness of an ad or whether to remarket to users if they are unable to track conversions, sign-ups for mailing lists, or abandoned items in a shopping cart.
The rapid and far-reaching implications of these changes have caused confusion among marketers. It is important to note that these changes not only affect app tracking on Apple devices but also limit the data shared with Facebook by users of apps on Apple devices.
In response to this, Facebook has made universal changes to their attribution model, such as removing the 28-day click-through, 28-day and 7-day view-through attribution windows, and implementing a default 7-day click attribution.
Why is this an advertising measurement problem?
In brief, the changes brought about by iOS 14 will have an impact on the effectiveness of certain Facebook ads for all brands. Due to users opting out of tracking, targeting prospects and retargeting campaigns will no longer be as precise. However, brands that have diversified their measurement strategies and prepared well will be less affected by these changes and well-positioned to take advantage of the uncertainty it creates for their competition.
It is important to note that these changes are not just a problem in and of themselves, but rather a symptom of a larger issue: an over-reliance on ad platforms to drive sales and measure performance. This dependency on ad platforms, particularly on the vast amounts of data they possess, has been accepted as the norm in the digital advertising industry.
However, this data-driven approach is flawed and does not accurately reflect the complexity of the customer journey across channels and devices. As a result, each advertising platform tends to take full credit for sales it is only partially responsible for generating. This has led to an over-reporting of conversions. The fact that this problem is accepted as standard in the industry shows how hard it has traditionally been to solve – although flawed, this measurement has been the devil that marketers know. The disruption of Apple’s update, however, has cast new light on the pitfalls of measuring in this way.
What is the solution?
Brands now have two options available to them considering the recent changes brought about by iOS 14. They can make minimal adjustments in the short-term, such as modifying their attribution window in Facebook, re-optimizing their campaigns and accepting a decrease in return on advertising spend as their ads become less effective. Alternatively, they can take up the challenge posed by Tim Cook and focus on the larger picture.
Historically, data regulations and restrictions have been subject to change every few years, such as the removal of access to Double-click IDs by Google post-GDPR and the restriction of user-level data sharing by Facebook in the wake of the Cambridge Analytica scandal. Throughout these changes, it has become evident that brands that rely less on ad platforms perform better. These brands place a strong emphasis on their first-party data and independent measurement and attribution, as a means of understanding the relative effectiveness of their cross-channel marketing activities. They only utilize user-level data that customers are willing to share, have permission to use and do not require any more. As a result, they are proactive in collecting this data and maximizing its value.
In contrast, brands that heavily rely on ad platforms for measurement and attribution are subject to the limitations and conflicts of interest inherent in this approach. Facebook’s announcement of an “aggregated event measurement” solution is a step in the direction of independent measurement, but it is still controlled and operated by Facebook.
This approach, however, is not a new concept, and independent measurement providers such as Fospha have long advocated for the use of first-party data as the foundation for deterministic attribution and the combination of statistical modelling of third-party aggregated datasets to measure the effectiveness of activities where user-level data is not feasible.
In conclusion
The impact of iOS 14 on advertising and marketing is a reminder for brands to strive for ethical, data ownership to refine independent measurement. Failure to do so will result in continued vulnerability to external forces and decremental deterioration with every update such as GDPR, CCPA, or iOS14.
iOS 14 has challenged brands’ online advertising, especially for those invested in Paid Social, but it has exposed pre-existing data and measurement flaws. The lesson here is clear: the privacy movement is here to stay. Brands that get ahead of these changes will have an advantage over their competition when changes like iOS 14 come into play.
Jamie Bolton is a ClickZ Advisory Board Member and head of Growth at Fospha, a leading marketing measurement platform for ecommerce.
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