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.
App Tracking Transparency framework: iOS 14 changes will devastate Facebook’s business model
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).
Figure 1
When the application launches, the user has two options (figure 2):
- Accept the collection of personal information by the application
- Refuse the collection of personal information by the application
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 display of targeted ads in your application based on user data collected from other companies’ applications and websites;
- the sharing of location data or lists of email addresses with data brokers;
- the sharing of email lists, advertising identifiers or other identifiers with a third-party advertising network that uses this data to retarget these users in other developers’ apps or to find similar users;
- the placement of a third-party SDK that combines data from users of your application with those of other developer apps to target advertising or measure advertising efficiency, even if you don’t use SDK for these purposes. For example, using an analytics SDK that reuses data collected by your application to enable targeted advertising in the applications of other developers.
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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Facebook’s reaction
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):
- remove itself from the App Store; or
- adapt its advertising abilities to advertisers.
Changes to the Facebook Ads platform
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.
Advertising tools: Number of events limited to 8
- Advertisers will be limited to using 8 conversion events per domain name, including standard events AND personalized conversions, for the purposes of optimization.
- Advertisers will receive partial reports in the ad manager and event manager for additional events beyond the 8 prioritized events. This will not prevent advertisers from being able to use events outside of their 8 events to create personalized audiences. The choice of events will be made in a new dedicated section of the platform called Aggregated Event Measurement.
- The 8 conversion events per domain will be classed according to campaign expenses over the last 28 days. If tracking is refused, if several events are undertaken by a user (for example, a page viewed, an addition to a cart, then a purchase), only the highest prioritized event will be reported. The analysis of certain ratios (such as Cart to Buy rate) will need to be re-evaluated and data analyzed in a more holistic way.
- By using Value Optimization, each purchase event will count for a minimum of 4 events within the 8-event limit.
- When an event is modified, this triggers a 72-hour pause before campaigns can be relaunched using the modified events.
Targeting and delivery
- Default attribution windows change from 7-day click and 1-day view to 7-day click only. This affects all conversion and catalogue campaigns. Advertisers should expect that delivery will be less efficient compared to historical performance. The efficiency and profitability of campaigns will be deeply affected.
- The size of personalized audiences and their performance will diminish due to the loss of certain events from users of iOS 14.
- New iOS 14 campaigns can no longer use personalized audiences based on events from included mobile applications.
- New iOS 14 app install campaigns[Prf1] can no longer use app connections targeting.
Optimizations
- Facebook is maintaining the possibility of creating app install campaigns by using optimization of mobile app installation, optimization of events in the app, optimization of value, and the installation of applications with optimization of events through automated application ads.
- Given the limited measurement capacity of Apple’s SKAdNetwork API, Facebook expects an impact on the performance of all app campaigns, which will probably lead to an increase in costs per action.
Measurement and reports
- The attribution window for accounts will be replaced by a new attribution parameter related to all selectable ads during the creation of the campaign. This parameter will guarantee that the conversions measured will be the same as those used for the optimization of campaigns. It will also offer flexibility and clarity when it comes time to analyze ad performance.
- Conversion events on websites will be indicated based on the time the conversions took place instead of at the time of the ad impression. Furthermore, there could be a delay of 24 to 48 hours when a conversion is indicated for iOS users.
Attribution of conversions on the date of the conversion instead of the impression
- Facebook can no longer handle attribution windows of 28 days for clicks, 28 days for views and 7 days for views. Certain conversions will be subject to modelling to make up for the loss of data.
The discontinued attributions are in red
- Segmentation by delivery (placement, device, etc.) or action (product, carousel card, etc.) will not be supported for conversion events on the site. This includes demographic segmentation such as by age, gender and region. With this we are losing a big part of the granularity of reporting.
- Apple’s SKAdNetwork API will be the reporting source for app install campaigns targeting iOS 14.
- Due to the limitations of the Apple SKAdNetwork API in terms of reporting, advertisers must plan for difficulties when it comes to their ability to measure iOS 14 ad campaign performance. Measurements for advertising groups and ads will be estimated. Facebook cannot use its own attribution windows for measurement, which means a reduction in conversions.
Next Steps
The steps that advertisers should expect will be subject to change, but here are the main ones you should follow starting today:
Verify your domain name in your Business Manager
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.
Define and classify the 8 most important events for your company.
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.
Effect on attribution and automatic rules
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.
Review of audience and bidding strategies
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.
Integration of Conversion API (Server-Side-Tracking)
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.