It’s been a few years now that browsers and legislators have brought increasing complexity to the collection of user data. With Chrome’s announced removal of third-party cookies planned for 2023, the countdown to the cookie apocalypse has not just begun, but is in fact well underway.
In this war between identifiers bearing the standard of privacy (whether rightly or wrongly), it’s Apple that has launched the latest offensive with its announced release of iOS 14, which includes functionalities related to privacy management. The main victims of the update? Mobile app developers. In this article we’ll be focusing on the effects on the Facebook family of applications.
While we would like to apologize for the length of this article, you should know that this news item will have a major impact on your media investments and digital revenues. If you don’t want to miss any coverage of these changes, subscribe to our newsletter to learn all about the cookie apocalypse.
According to Apple’s App Tracking Transparency (ATT) framework, the information collected and used to track a user via IDFA (basically, the Apple IDFA is used to identify users by digital measurement tools, similar to cookies on the web) must now be clearly revealed by the app’s developer in the App Store before the app is downloaded (Figure 1).
When the application launches, the user has two options (figure 2):
In this case you can clearly see that it’s no longer possible for apps to hide the information used for user tracking and that the wording of the pop-up is very explicit. This is a shift from the former situation—where information collection was implicit with a predominant “Accept” button—to a situation where the user can clearly see what information is collected. Users now have the choice, at the touch of a button upon launch of the app, to accept or refuse tracking by the application.
But what is considered to be tracking and what does the ATT affect? Here are a few examples from Apple:
The notification appears when using any iOS application, including also the Facebook family of apps (Facebook, Instagram, Messenger, WhatsApp), but also apps monetizing their platforms through Audience Network.
In 2020 in the United States, over 30 percent of iOS users had already activated the “Limit Ad Tracking” (LAT) function even without the new functionality brought by iOS 14, according to a Singular study. Alex Austin, CEO of Branch Deep Linking, admitted to Ad Exchanger that he wasn’t hoping for more than 5 percent opt-in on iOS 14.
The cookie apocalypse and IDFA are underway and Facebook’s advertising ecosystem is about to pay the price.
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The Apple ATT is without doubt a major advance in privacy management for users—from the point of view of a user. However, Apple is known for its unilateral decision-making and the release of iOS 14 is no exception, as Allison Schiff explains in her column on Ad Exchanger. By forcing through this change, Apple has created a seismic wave with this announcement that is throwing mobile advertising industry stakeholders into disarray.
If we take a look at the underside of this announcement branded as a “Privacy” functionality of Apple’s ATT, it’s important to emphasize that Apple is currently in the midst of expanding its activities related to advertising services, notably through Apple Search Ads. As Eric Seufert effectively points out on Twitter, by blocking the collection of user data by mobile apps, but exempting its own advertising network from these limitations, Apple is creating a definite competitive advantage for itself.
It looks like Apple is exempting its own ad network from the IDFA-related privacy changes in iOS14. iOS14 includes a separate setting for Apple Ads personalization: (1/X) pic.twitter.com/cc0ZoAhuR6
— Eric Seufert (@eric_seufert) August 7, 2020
As you can imagine, Facebook is getting whipped by Apple’s OS updates.
In reaction to these announcements, Facebook tried to find common ground with Apple, but without success. In December of 2020 they published a press release in the name of small business (which, by the way, aren’t the only entities affected by these changes) to present the impact created by iOS 14.
Like other industry players, Facebook rebuked Apple for using privacy protection language when their decisions were motivated more by profitability. With potential reductions in monetization through Audience Network, Apple is forcing these companies to turn to subscriptions or payments through the application, though these are subject to an Apple tax ranging from 15 to 30 percent.
As far as advertisers are concerned, advertising will become less effective and efficient. Facebook studies demonstrate that without personalized advertising powered by first-party data, small businesses could see advertising-generated sales through their website reduced by over 60 percent.
On the publisher side, the loss of personalization could lead to a 50 percent reduction in advertising revenue from Audience Network. In August of 2020, Facebook mentioned that Apple’s updates could make Audience Network so ineffective it might not be smart to continue to offer it on iOS 14. The changes imposed by Apple will have major repercussions for Facebook, but also for other companies using Facebook as a revenue generator.
So Facebook finds itself facing a dilemma (though perhaps not a real one):
Facebook doesn’t really have the choice to adapt its advertising abilities such that they conform to the App Store’s new rules. It’s important to note that the changes presented below affect all web and app traffic, not just in iOS (at least until we have indications to the contrary).
Here is a recap of the changes Facebook has made to Facebook Ads. We will then present the steps to follow that will have a major impact on media investments over the next few months on the Facebook platform.
We summarize the changes that are to come here, then we will later present the next steps to be taken.
Attribution of conversions on the date of the conversion instead of the impression
The discontinued attributions are in red
The steps that advertisers should expect will be subject to change, but here are the main ones you should follow starting today:
Understand that the number of events will be limited to 8 per domain name. The goal of this action is to avoid any conflict between various Business Managers that may be using the same domain name and exceeding the 8-event limit. Here is more information on the procedure.
For most companies, the 8-event limit will easily apply. On the other hand, in the case of international sites, for example, if events were created by region, the event architecture will have to be completely reviewed.
Example: (4 regions: US, CA, FR, DE) x (8 events) = 32 events
The preselection of 8 events will be made by Facebook based on the volume of investment made in each, but it’s crucial to anticipate this change in order to proactively modify the selection of the date for the change in Aggregated Event Measurement.
If you create your conversion reports on the Facebook platform and 28-day click attribution data are important to you, consider downloading a historical report. After the change date, historical data will no longer be accessible through Ad Manager (it will remain on the Ads Insights API).
If automatic rules were established based on rules that included the 28-day click, these need to be updated to avoid any undesirable impact on campaigns.
With so many changes being made to the heart of the Ad Manager ad platform, you must take the time to analyze the campaign architecture of your accounts. Audiences used as well as bidding strategies should be re-evaluated.
The ATT is merely a new piece in the puzzle of regulations involving trackers (IDFA, AAID and cookies). The volume of constraints and speed of new changes will only increase in the coming months. Newer generations of tracking rely on server-side integration. Starting today, advertisers using server-side integration have more control and will generate more performance with a pixel installed on the client side. Without doubt, Facebook will put more emphasis on server-side integration of its Conversion API with related new products and services.
The adaptation of the technology stacks of ad industry players has begun, and 2021 will only see this process accelerate. Apple has forced Facebook to take a giant leap forward into a future where user tracking as we currently know it will be transformed. As a marketer, it’s crucial to adapt your services and strategies to the disruptions caused by changes to legislation (GRGP, CCPA, etc.) and to browsers (ITP, ETP, ATT, etc.).
Personally, I think that these changes are a good thing and will make the next few months and years even more exciting. By redefining the super-quantifiable, super-trackable side of digital marketing and reshuffling the deck of the ecosystem’s big players, we will be forced to return to the basics of marketing and of measurement.
If you have any questions, please do not hesitate to contact us. The changes that will occur in the next few months will have a major effect on the digital advertising industry, and brands that understand how to quickly adapt will be richly rewarded!