When Apple launched iOS 14 in April 2021, the upgrade went further than simply adding jazzy new features. At the center of the new operating system was a fresh approach to privacy through App Tracking Transparency. Apple’s new policy affects more than just the 30% of mobile users who use iOS. It’s already cost social media platforms some $10 billion and has sent shockwaves through the marketing world. Here’s why iOS 14 is so significant and what it means for paid search and paid social marketing.
iOS 14 101: Inside the Upgrade
The intention of iOS 14 is to establish a new baseline for online privacy. From now on, whenever an iOS user downloads a new app, they will have to give explicit permission for that app to track their activity, or they can choose to opt out of tracking entirely. Every iPhone comes with an Identifier for Advertisers (IDFA) that provides advertisers with aggregate data on the user’s behavior, although it doesn’t identify the individual. With iOS 14, users can turn that tracking off. The function isn’t itself new. iPhone users have always been able to withdraw permissions in their settings, but now the issue is brought to the forefront. The most likely scenario is that given the option, most users will opt out, with some predicting that as many as 80% of users will switch off tracking.
What’s the Big Deal?
From a user perspective, iOS 14 is about peace of mind. Although 70% of iOS users were willingly sharing their IFDA before the update, many have long had concerns about the extent of the permissions that come with every app download. For app developers and advertisers, on the other hand, iOS 14 presents a serious headache. Tracking user behavior within an app and across iOS is essential for ad personalization and better profiling. And for marketers, the loss of data makes campaign planning, attribution, and measurement far more nebulous. Without the ability to track what users download, click, or purchase, marketers are severely limited when it comes to planning paid search and paid social campaigns. Not surprisingly, the update has already caused a 20% drop in revenue for iOS advertisers and prompted a big shift in their budgets toward Android.
How the Update Affects Marketers
The update effectively makes ad measurement, attribution, and retargeting redundant once users opt out of sharing their IDFA. Marketers are bracing themselves for the following:
Lower Opt-In Rates
When tracking is framed as an opt-in decision rather than buried in the settings, users are more likely to think of the disruption and nuisance it poses rather than any value it provides. As a result, they will inevitably opt out.
Less Intelligent Data
Gone will be the granular data that marketers rely on to inform their campaigns. That will ultimately lead to marketers and advertisers having to cast a wider net — and thus spend a bigger budget — to reach the targeted audiences they could nurture when tracking was on. For app developers in particular, it will be harder to demonstrate to advertisers the success of ads shown through the app without the corresponding attribution and conversion data.
Difficulties in Paid Search Advertising
The upgrade reduces visibility for advertisers into key metrics when it comes to paid social and paid search advertising. App developers who run Google ads, for example, cannot retarget iOS users who match their target audience profile, because this information and behavior is now hidden. Likewise, paid social marketing becomes more difficult without the intent signals to trigger targeted ads.
A Direct Challenge to Facebook
Even if you missed the full-page press ad that Facebook issued in response to the Apple update, there’s little doubt that Facebook and its associated stable of apps — Messenger, Instagram, and WhatsApp — stand to lose the most. Although these apps will still be allowed to share data between themselves, each relies on tracking data to build up profiles and target segments. Similarly, the apps that use the Facebook Audience Network to host and monetize ads will also sacrifice a considerable portion of revenue.
Small-business marketers who run campaigns on Facebook are now deprived of vast resources of essential user data tracked from off-platform events, putting the onus back on first-party owned data tracking. With less data to work with, small businesses face the prospect of spending more for their advertising only to generate less accurate insight.
How should marketers respond? We recommend downloading the Hawke Marketing Guide to Paid Social as a first step. Find out how to turn the restrictions posed by the iOS 14 update into an opportunity, and what the measures are you need to take right now in order to advertise successfully across paid channels. Gain access by starting with Hawke Media today!