If you have kept up to date with digital marketing news lately, you would have encountered panicked doomsday predictions like:
“Apple just killed Facebook Ads”.
“Facebook Ads are done!”.
“It’s the end of the road for small businesses that are dependent on Facebook Ads”.
Why is everybody flipping out?
Apple and Facebook have been at odds for a while. Tim Cook and Mark Zuckerberg have been involved in a pissing contest, sniping at each other at every turn. This drama reached a flashpoint in June last year when Apple made an announcement, which put an end to anonymous tracking of users by Facebook and other apps.
Apple has positioned itself as a user privacy crusader. With the latest iOS 14 update, Apple has launched the ATT (App Tracking & Transparency) Framework, which gives the user control over whether they want to be tracked by the apps that they use.
With the new update, app developers must prompt users asking for their permission to be tracked.
Giving the user an option to reject tracking, could adversely affect the following groups of people who rely heavily on user data:
1) All app developers including social media platforms like Facebook, Snapchat, TikTok, etc.
2) Business owners who rely on social media platforms to promote their products and acquire new customers.
3) Agencies and other members of the digital marketing community.
When Apple made the announcement, these stakeholders were up in arms. Having the most to lose, Facebook led the protest against the update.
Apple appeared to back down temporarily, by delaying the launch of the opt-in tracking feature but eventually stood its ground.
In the ensuing PR battle, Apple & Facebook traded blows repeatedly. Facebook purchased full-page newspaper ads criticizing Apple and voicing concerns for small businesses. But, Facebook’s criticisms lacked bite and couldn’t convince users as to why tracking was beneficial to them. These attacks mostly backfired and earned them a lot of bad press.
Finally, Facebook tapped out and grudgingly agreed to play by Apple’s rules. In one fell swoop, Apple might have forever changed digital marketing!
Who’s the good guy in all this?
Apple might overwhelmingly seem like the good guy here. Apple is only trying to protect its users from snoopy advertisers and data hoarders. Right?
The reality is not so black and white.
On one hand, Apple seems to genuinely care about their user’s privacy. On the other, this could be a Machiavellian move that intends to subvert its main competitors in the advertising space - Facebook and Google, and prop up their own ad product.
Apple has not made any commitments to play by its own rules. This means that their ad product could very well pry into the user's online behavior. How does it benefit the user if the control of their data merely changed hands from one multi-billion dollar corporation to another?
Facebook is easy to hate. Their platforms are awash with fake news and echo chambers, which sow discord and polarize our societies creating rabid mobs that denounce critical thinking and nuance.
Facebook took tracking too far. They had plenty of opportunities to explain themselves or do right by their users, but they bungled it all. Mark Zuckerberg might have managed the unique feat of becoming a meme on his own platform.
In their PR campaign against Apple, Facebook masqueraded as the savior of small business. In reality, their treatment of small businesses has left a lot to be desired.
Despite their flaws, Facebook and other social media apps are indispensable to the internet. Small businesses and content creators that users have come to love, rely greatly on personalized ads on social media to reach their target customers. These personalized ads are made possible by anonymous tracking.
Depesh Mandalia, the foremost Facebook marketing expert and Facebook advocate, believes that the quality of organic content recommendations could deteriorate if users opt-out of tracking. In a potential worst-case scenario, the user experience could suffer, and Facebook could lose a chunk of its daily active users.
One of the best things about the internet is that it creates a level playing field, allowing small businesses to go toe to toe with large corporations. An e-commerce store selling baby products could precisely target new moms on social media instead of buying expensive ads on mass media.
For a privacy-conscious user, the manner in which a small business promotes to them, might not be a concern.
Privacy is a fundamental human right. Users deserve the space to analyze the world around them without scrutiny and come to their own original conclusions. But, having agency when the choices are limited is no good to the user either. Small businesses offer more choice to a user and their survival should be a priority for anyone concerned with large evil corporations taking over their lives.
It is difficult to choose a side when the benefits that tracking offers come at the cost of user privacy.
Privacy vs Convenience — What matters more?
With such a conundrum, it may be best to let the user decide for themselves without imposing tracking on the user, which is what Apple intends to do.
While that is admirable, one has to wonder, does the average internet user know enough about the issue to choose what’s best for them?
Social media gets hated on a lot. Documentaries like Social Dilemma talk about the perils of social media and how these companies use personalization to keep us glued to the screen and coming back for more like addicts. But do the benefits get talked about enough?
Social media is a quintessential double-edged sword.
While it contributes to mental illnesses, it has also aided in destigmatizing them, making it easier for people to get help. It promotes unrealistic beauty standards, but it also allowed people to embrace body positivity. It may bring bullies and racists together, but it also allows victims of traumatic life events to find community.
You may think it turns us into unthinking consumers. But it enables users with ethical concerns over fast fashion brands to discover boutique fair fashion brands.
There is much to be said for having easy access to memes and self-help. I don’t see any studies on the benefits of the levity and inspiration social media brings to our lives.
Users experience the benefits of social media and anonymous tracking every day. But nobody has bothered to explain it to them. Users without a doubt prefer personalized messaging and experiences and often get frustrated when it’s not. If they didn’t like it, personalized marketing won’t be as effective as it is.
You may be thinking that a user can still get the same benefits without some Artificial Intelligence telling them what to do. If they want a good laugh, they can go looking for memes on Reddit. If they want to support small business, they can find them on Google. This may be true for a few discerning users.
But, the majority of users may not want to make conscious decisions every waking moment of their lives.
On Spotify, curated playlists account for at least 30% of all streams. YouTube gets billions of views every day and 70% of the views are from content recommended by an algorithm. Who knew watching people play with slime could be relaxing until YouTube told us to?
We don’t always seek solutions to the problems in our lives. Sometimes we won’t even know we need some solution until we encounter it.
“If I had asked people what they wanted, they would have said faster horses” — Henry Ford
Without tracking, serendipitous possibilities of encountering a new product or a new content creator that is perfect for us could become fewer.
Some privacy absolutists may decry all tracking despite the benefits. But most users would want to find a middle ground between privacy and convenience. Unfortunately, they might unwittingly choose absolute privacy, if they don’t hear all sides of the story.
In a previous iOS13 update which gave users the ability to reject GPS tracking, more than 50% of the users turned it off. As a marketer or small business owner, it is safe to assume that users won’t make an informed choice and prepare for this new reality.
Are Facebook Ads done?
No. But, it sure got a lot more challenging! This is also true for other social media platforms like Tik Tok, Pinterest, Snapchat, etc.
Before Apple threw a monkey wrench into the status quo, advertisers made use of the Facebook Pixel with great success.
According to Facebook, the pixel is an “ analytics tool which measures the effectiveness of your campaigns”. Actually, the primary function of the pixel is to match user actions on the advertiser’s website to the user’s Facebook profile.
For example, when someone makes a purchase on an e-commerce store that has the pixel installed, the purchase data is passed along to Facebook. If the same person has a Facebook profile, Facebook is able to match the purchase action to the profile. This allows advertisers to effectively remarket to their website customers.
On top of it, it allows them to create “Lookalike audiences” of people who purchased, enabling advertisers to discover new prospects that are similar to their existing customers.
The pixel is housed on millions of websites around the world and it is continuously collecting and analyzing behavioral signals from billions of users. Facebook’s machine learning algorithm has a deep understanding of who buys what, why, and when.
Advertisers have come to depend on the algorithm to find their target customers. So much so that they are setting up their campaigns with broad targeting, instead of using any of Facebook’s targeting filters. But, the glory days of the algorithm might be over.
When a user declines tracking on the ATT pop-up, the app developer can no longer track IDFA (Identifier for Advertisers) which is an anonymous identifier for an apple device. IDFA does not carry any personally identifiable information of a user. It enables advertisers on the app to target the device user with precision. In simple terms, IDFA is to iOS apps, what cookies are to browsers. Facebook will be in violation of Apple’s ATT Framework if it tries to match website actions to the profile of a user who has opted out.
Apple devices make up 27% of all mobile devices. With a majority of them likely to disable tracking, this is going to create a gaping void in Facebook’s data. The algorithm is only as smart as the data it is fed, and a data loss of this size could disorient it.
Some of the impacts are:
- Broad targeting could become imprecise
- Custom audience (Remarketing audience) sizes could see a decrease as they wouldn’t include iOS 14 users who have opted out.
- Exclusion targeting could be affected. If you want to target only new prospects and leave out existing customers in your targeting, you may not be able to do so.
- You can only optimize for 8 website events. You can still track many events and create custom audiences out of them. You would have to pick which events matter the most to you and optimize only for those 8 events in your campaign settings. This 8 event limit affects advertisers who use different subdomains for different geographic locations to track different sets of events.
- If you work with many agencies, and they each have their own pixel installed on your website, you will no longer be able to do so. There can only be one pixel per domain and all parties involved have to agree on which events to track. You will have to share the website audiences with your agencies.
- Reporting can be inaccurate. Facebook will report fewer conversions overall. Reporting breakdowns along parameters like gender, age, etc. will no longer be available
- The 28-day click attribution window and all view-through windows will be done away with.
What do you need to do as a business owner/marketer?
This issue is developing every day, and it may be impossible to predict each and every downstream impact and prepare for all scenarios. You can take a little bit of comfort in knowing that this affects everybody, including your competition.
Your business needs to be agile in this state of flux, display an ability to take setbacks on the chin, and adapt as required. With a combination of Facebook recommended actions and marketing best practices, you can still find ways to help your customers discover you and buy from you.
1. Verify your domain
Facebook requires you to verify your domain in order to ensure you have the authority to set up and prioritize events on the domain. You can follow the guide here to complete verification.
2. Prepare for the 8 conversion events limit
Facebook, initially will choose 8 events for you based on which events record the most conversions. According to some sources, the highest priority event like the Purchase will be tracked even for users that opt-out.
All ad sets that are optimizing for events outside the 8 will be paused. If you are selling two or more products and have set up different purchase events for each, you won’t be able to do that going forward.
In the coming months, they have promised to launch a feature that allows advertisers to pre-select which events matter most to them. Prepare ahead to decide which events lead to the most profitability for your business.
3. Rethink performance evaluation
In the absence of accurate information, take a holistic approach to read your reports.
With Facebook unable to report accurately on conversions, metrics like RoAS (Return on Ad Spend) and CPA(Cost per Acquisition) will not realistically reflect the health of your campaigns.
If Facebook & Instagram are no longer pulling the weight for your business, you might have to diversify into other traffic sources to acquire new customers. Attribution was already a nightmare, to begin with. Apple’s update takes us all back by a decade, to times of decreased visibility into performance.
We have to start considering metrics like eROAS which is Total Revenue / Total Ad spend to judge how our campaigns are faring.
Half the money I spend on advertising is wasted; the trouble is, I don’t know which half. — John Wannamaker
This quote rings true to this day. Without sophisticated reporting, all advertisers can do is to aspire to be everywhere their target customers are, test different channels and budget allocations, and discover a sweet spot where they attain the most profitability.
4. Deploy CAPI
Cookies are on the way out. Especially, 3rd party cookies. Even Google plans to end 3rd party cookies on their Chrome browser by 2022.
A first-party cookie is created by the website that the user is currently on. A 3rd party cookie is created by domains other than the one the user visited. If you want to know more about the difference, you‘ll find a good explanation here. The Facebook pixel creates 3rd party cookies to track users.
Facebook has built CAPI (Conversion API) to replicate the functionality of the Facebook pixel and become the preferred tracking tool of the future. CAPI is no workaround for the ATT framework impositions. The 8 event limitation will apply to CAPI as well.
Currently, CAPI is designed to work in parallel with the Facebook pixel. These are early days for CAPI and there are some issues that need to be ironed out. For example, CAPI and the FB pixel are not supposed to double report conversions and must remove duplicate conversions on their own. But, some instances have been reported where they are not doing the deduping right.
Learn more about how to deploy CAPI here.
5. Explore alternate traffic sources
Facebook and Instagram are still the top platforms for small businesses and e-commerce stores to advertise to their customers.
“Our jobs as marketers are to understand how the customer wants to buy and help them to do so.” –Bryan Eisenberg
So far, your potential customers are still on Facebook & Instagram and are very much in the habit of buying from social media ads. Having said that, they need no longer be the only places you reach your customers at.
Amazon and Google will be the unintended gainers of the privacy update. Advertisers who were apprehensive to try out these platforms might be more open to them now. So should you
Set aside small budgets to test Native Ads, Display ads, Influencer marketing, etc.
6. Focus on customer retention and loyalty
One of the most crucial steps in marketing is the follow-up. The majority of your prospects are not ready to do business with you right away. You need to follow-up with them from time to time in order to find them when they are ready.
As we have already seen, data shows that personalization is highly effective. If you are not able to achieve this through ads, strive to build relationships, with the customer directly.
Direct relationships are more valuable than 3rd party audiences. Your ad account could get banned, your social media profiles could be de-platformed, but your audience is yours, and nobody can take that away from you. It is also a moat that your competitors cannot breach and poach your customers.
Invest in email marketing. Give your customer a reason to share their email ids and phone numbers. Make them look forward to receiving emails and other communication from you.
Pay attention to your customer service process and seek to delight the customers. Inspire loyalty and have them coming back for more even if you go cold on them for a while.
7.Increase conversion rates and lifetime value of a customer
Let’s look at the e-commerce growth formula
One way to grow your business is by increasing the number of visitors to your store.
Instead of casting a wide net, you can also increase the likelihood of you converting a customer, by improving the conversion rate.
If you also manage to up-sell, cross-sell, and retain your customer, you would extract more revenue per user, increasing your LTV.
Invest in UI & UX design and landing page copy to create frictionless user journeys that have high conversion rates.
8. Return to fundamentals
Facebook’s robustness might have made us all lazy.
Advertisers get results with poorly conceived campaigns and lazy creatives. This may no longer be possible.
This new reality will test our mettle as marketers. Brands that were entirely data-driven in their approach and paid no mind to consumer psychology and fundamental copywriting principles, will need to up their game.
If accurate targeting is not possible, we have to write copy that attracts the right customers from a large group of prospects. The creative is our targeting!
Most first-time website visitors leave your website instantaneously, on account of a bad user experience or because of not being able to make a buying decision right away.
Before iOS 14, we could conveniently retarget website leavers. Now, retargeting may not be as effective as it used to be. Improving landing page experience and collecting email addresses is paramount now. No more linking ads to product pages and expecting sales to multiply.
We also need to become content machines! Most small businesses don’t have the resources to invest in organic social content creation and SEO content creation, and they are often the most ignored aspects of marketing.
We cannot afford to ignore organic content any longer. Engagements on a Facebook page or Instagram profile is first-party data. This is a retargeting audience that the iOS 14 update won’t impact. How many of us really have an organic audience worthy of retargeting?
Final Thoughts
This update is definitely concerning. But it is in no way a doomsday scenario.
In a way, this existential crisis that the marketing community is having is good for everyone involved. It allows us to take a moment and ponder on our methods and their sustainability.
Small businesses are resilient. They may be shutting down at an alarming rate due to the pandemic, but 2020 also witnessed a significant increase in online shopping and online ad expenditure.
The market is there. It just got a little harder to reach the customer. If Facebook’s performance declines significantly, the cost of advertising will drop, allowing us to reach more people for less.
The thing is, everybody else also has the same problem. If we stay informed, adapt as needed, and manage to be better than the average, customers will love us and reward us with their patronage.
If we are truly committed, nothing can stop us from building honest relationships and delighting the customers.
Learning Resources
If you want to learn more about this issue, you can check out the following resources
