Shopify Ecosystem

The Untrackable Future? New Measurement Solutions To Combat Signal Loss

the-untrackable-future?-new-measurement-solutions-to-combat-signal-loss

Any iPhone user knows the rush that’s felt when updating their iOS to fix pesky bugs and, better yet, enjoy exciting new features. But for digital marketers? That’s not always the case, especially with Apple’s most recent rollouts of iOS 14.5+, where consumer privacy comes at the high cost of performance tracking.

As a result of the significant impact of Apple’s App Tracking Transparency (ATT), marketers are quickly learning to traverse a rapidly changing e-commerce landscape, where much-needed consumer insights are disappearing every time a consumer clicks that “Ask App Not to Track” popup.

A part of April’s iOS 14.5 and June’s iOS 14.6 deployments, which have been adopted by over 73% of iPhone users (92% of whom have opted out of app tracking), ATT has resulted in an estimated 40% total signal loss for key performance metrics like performance, revenue, ROAS, and CPA.

What’s more, with fall’s iOS 15 update and the email tracking implications that come with it, digital marketers are losing even more access to the consumer insights that they’ve so heavily relied upon to optimize media-buying strategies. Now, email marketers are just about ready to press the panic button, along with the rest of affected digital marketers.

But, don’t press that button just yet.

As we lose more granular and accurate insights, MuteSix encourages brands to stay the course and turn their attention to less conventional indicators to gauge their performance.

Here, MuteSix dives deeper into the measurement solutions brands will need to know when dealing with signal loss in an increasingly privacy-first world.

Holistic Measurement Strategies

Holistic Reporting is an effective way of measuring overall marketing spend and paid media efficiency relative to sales performance.

In simplest terms: it’s dollars in vs. dollars out. With Holistic Reporting, we’re essentially going back to the “olden” days before app tracking. 

Holistic Reporting is just what its name suggests: A more holistic way of viewing paid advertising’s impact on revenue as opposed to channel-by-channel attribution. The result is a more macro-level analysis of ad spend and revenue as a larger part of the marketing puzzle. 

One measurement strategy is Marketing Efficiency Ratio (MER), which is calculated by the Total Revenue / Total Media Spend. This all-important ratio helps businesses understand the health of backend business objectives as they relate to marketing investments. 

When analyzing MER, brands can make well-informed media spend decisions. For example:

  • A higher ratio than the benchmark KPI indicates room to scale media spend
  • A lower ratio signals an opportunity to decrease spend and seek out efficiencies 

Another holistic measurement strategy is the converse % Media Spend to Total Revenue, which is Total Media Spend  / Total Revenue. As a reference:

  • Many well-established enterprises aim for an 8% of media spend to revenue
  • Go-to-Market and SMBs, on the other hand, shoot for a 20-40% media spend to revenue since they are in the growth stage, aggressively trying to acquire new customers in a very competitive landscape.

Here is what Holistic Reporting looks like, taking MER and % Spend & Revenue into consideration when tracking overall performance:

We recommend to all clients that they use Holistic Reporting by comparing how much they’ve spent with how much they’ve generated, and then correlating that ratio or percentage with what they would typically see in-platform. 

The promising finding with this method of measurement is that while we’re seeing a 40% signal loss in-platform due to ATT, we aren’t seeing anywhere near that percentage in terms of efficiency from a sales to spend perspective, as seen in the graph below.

It’s important to note, with iOS 14.5+ updates, marketers are guaranteed to see underreporting within Ads Manager due to the overwhelming number of app tracking  opt-outs. However, it’s still worthwhile to continue looking at your in-platform numbers for correlation purposes, though you should take them with a grain of salt.

But remember, just because those in-platform numbers point to poorer performance, that doesn’t mean your ads have lost their effectiveness in driving sales. It simply means important metrics like ROAS and CPA are no longer being tracked accurately due to app tracking opt-outs.

Not only is it important for correlation purposes, but Holistic Reporting is also a beneficial measurement for:

  • Assessing how well a business is performing overall and then aligning paid media goals with overall business goals
  • Circumventing the challenges of relying on attribution by removing it from the equation all together
  • Scaling when using spend percentage because it’s scaling based on holistic sales performance, not what your media-buying platform can or cannot attribute

Other Important Measurements: Before and After Comparisons 

In addition to Holistic Reporting measurements, there are other ways to gain marketing signal in the age of ATT. One such alternative is to build models that triangulate the loss of signal resulting from opted-out users on iOS devices. 

A smart way to do this is to measure conversion volumes before and after iOS 14.5+ deployments (April and June, respectively) to see the variance, while keeping a close eye on CPA. 

Another tactic is to compare outbound clicks to landing page views and correlate this percent to the average from before ATT (as seen below). This will provide insight into the customer journey to measure the loss in signal from platform metrics to offsite events. So, while loss of signal is evident below, we can still infer that clicks have remained relatively consistent post the iOS 14.5+ deployments. 

In terms of overall revenue, the graph below compares Facebook spend to Shopify revenue to understand the holistic health of our marketing efforts, by analyzing % Ad Spend/Rev, which has remained flat since the implementation of iOS 14.5+.

An additional way to measure the loss of signal from ATT is to compare backend order volume data to platform pixel data to understand the loss in events being sent back to the platform.

A Final Word: Find the Gains Amidst the Loss

App tracking helps budding brands ultimately grow and scale. The Ads Manager tools on Facebook and Instagram have traditionally allowed companies to make informed media buying decisions with exceptional accuracy and granularity. 

However, such capabilities are no longer available to marketers in the increasingly privacy-first world Apple is creating. By turning to Holistic Reporting and comparing key metrics before and after the loss of signal from ATT, brands will still gain invaluable insights into the health of their backend of their business objectives as they relate to marketing investments. 

As we continue to navigate the iOS 14.5+ landscape, the data and digital marketing experts at MuteSix will continue to stand on the frontlines, looking for innovative and reliable ways to help your brand combat the current and future challenges posed by Apple. 

For more detailed information on measuring ad performance in the age of ATT or a robust analysis of your brand’s ad performance using these new measurements, reach out to our team through our website today. 

Special thanks to our friends at MuteSix for their insights on this topic.
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