iOS 14 Privacy Changes – Everything Advertisers Need to Know

Last Summer,?Apple announced it will be giving users the choice to block the Identifier For Advertisers (IDFA) feature at the app level. Though iOS users had already been able to block?IDFA?tracking at the device level for a few years,?they had to know where to look in order to do so. This new change puts the choice front and center, and is likely to lead to a much higher rate of IDFA blocking.

Apple hasn’t announced an exact date for the new system to go into effect, but by the end of Spring 2021, each app will be required to ask users’ permission to?use IDFA to?collect & share data about them. This includes?the data used to track the effectiveness of digital advertising.??

For advertisers, the results of this change will vary based on the type of targeting used, type of advertising used, and the length of their conversion funnel. It will also vary based on how dependent each advertising vendor is on tracking via IDFA. Some advertisers, like Google and Facebook, have other ways to identify users, since most users are logged into Facebook or one of Google’s products at any given time. Other advertising vendors rely solely on IDFA for tracking.  

We won’t have clarity on how each ad vendor will be affected by these changes until they go into effect. In general though, Demand Side Platforms (DSPs), Facebook, Twitter, Google Ads, etc, will report fewer tracked conversions within their user interface. Because the changes will not affect same-session activity, impression-focused channels like programmatic and Facebook will be affected more than click-focused channels like paid search. 

What Will Apple iOS 14 Users See? 

Currently, about 30% of iOS users have opted out of tracking. Once every app is required to actively ask permission, it is possible that this number will rise to 70% or higher. Apple will allow apps to tell users why they should allow tracking, and it is possible that certain apps will develop messaging that convinces a majority of users to opt in to tracking. We won’t know until the changes go live. 

Users who have installed iOS 14’s recent updates are already seeing this notice when they view an app in the app store. It is located below the reviews for an app: 

Facebook Advertisers Brace for iOS 14 Tracking Prompt Fallout

Once Apple requires the tracking changes, a?message like this will pop up when the user goes to install the app:

?Facebook is already testing messaging, so some users installing Facebook are already seeing this message.

How Will The Apple iOS 14 IDFA Update Impact Advertisers? 

Advertisers will be impacted in four main areas: 

Audience Targeting?

Advertisers’ ability to target ads to iOS 14 users who have opted out of tracking will be limited.?

  • The scale of this will be dependent on opt-out rates. 
  • It’s important to remember that this only applies to iOS devices. Most people use 5-7 devices on a regular basis, so advertisers will be able to target them on other devices, such as desktop & OTT, so long as advertisers are using an audience provider that targets individuals across all their devices. 

Ad Retargeting?

Any retargeting to users (based on device-level targeting) will no longer work for users that have opted out of sharing their IDFA, if that retargeting is based on IDFA. Platforms like Google and Facebook have other deterministic variables they can use to identify devices (email, phone?number) but other programmatic platforms that don’t have such deterministic ID graph information are likely to see a reduction in targetable audiences.?

Ad Measurement?

Though Apple’s new?SKAdNetwork?(an Apple-controlled tracking system for apps) will allow for conversion data to be passed back at the campaign level, advertisers will still see a reduction in the data they can use to?evaluate?performance on iOS devices.?

  • Importantly, this change will not affect the tracking of conversions that happen during the session created by a click on an ad that lands the user to a website/app. Instead, this will affect ad engines’ (and websites’/apps’) ability to tie conversions back to impressions/clicks/sessions that happened prior to the session during which a user converts.  

Reach & Frequency On Multi-Channel Initiatives?

Advertisers using a multi-channel, audience-targeted approach will likely note?a?different distribution of reach and frequency than before.?

  • The audience pool of iOS 14 devices that are reachable within any given channel will be smaller than it was before these changes,?likely?resulting in higher reach to other devices.?
  • The effect on individual channels will not be spread evenly.??
    i.e.: Facebook may convince a higher percentage of its iOS 14 users to?accept tracking than Twitter.?
  • It is possible that frequency caps may combine with the smaller pool of iOS 14 devices to artificially limit spend. 
  • Advertisers will need to monitor their campaigns’ reach & frequency by device type, and may need to proactively adjust the mix.

How Have The Advertising Vendors Responded? 

Ad vendors have responded to the impending iOS 14 changes in a variety of ways. We can’t go into each one here, so we will detail the response of two of the biggest vendors: Facebook and Google. 

Facebook’s Response  

Facebook has the most-developed response to iOS 14 out of any of the vendors Path works with. Due to the severity of Facebook’s response. Path expects Facebook to exhibit the largest performance variation of any advertising channel due to two reasons: 

  1. Facebook usually performs a mid-funnel role in advertising, driving impression-based conversions along with click-based conversions. Facebook’s decision to no longer optimize based on impression-based conversions (also known as view-through conversions) will reduce the amount of conversion information available to its bidding algorithm. 
  1. Facebook is applying these changes to all Facebook ads instead of limiting them to ads shown to iOS 14 devices that have opted out of tracking.  

Specifically, Facebook is making the following changes: 

Tracking Setup?

  • Advertisers will be limited to using 8 conversion events per domain, including both standard events and custom conversions, for optimization. 
  • This won’t affect Facebook advertisers that use fewer than 8.  
  • For those using more than 8, Facebook will initially configure the conversion events it believes are the most relevant to their business, based on their activity. If necessary, Advertisers will then be able to change the configuration via a soon-to-be launched section in Events Manager. 
  • Importantly, advertisers will be able to use events outside of the prioritized events to create website custom audiences. 

Targeting & Optimization?

  • Default attribution windows?for?Optimization?are moving from 7-day click-through?plus?1-day view-through to 7-day click-through?only?for all conversions and catalogue sales objective? campaigns.?
  • This will reduce the amount of data that Facebook has to work with. This should not affect accounts that drive numerous conversions but may reduce the effectiveness of accounts with minimal conversion data. 
  • Advertisers using Dynamic Ads for retargeting may see performance and audience size decrease due to the loss of some events from iOS 14 users. 

Reporting?

  • Website conversion events will be reported based on when the conversions occur instead of the current practice of reporting based on when the impression occurred.  
  • For advertisers with longer sales cycles, this will require advertisers to work harder to understand the effectiveness of any short-duration initiatives 
  • Additionally, there may be a 24-48 hour delay when an offsite (to Facebook, “offsite” means off of the Facebook platform) conversion is reported from iOS users.  
  • Facebook will no longer be able to support 28-day click-through, 28-day view-through, and 7-day view-through attribution windows?for?Reporting.?
  • Delivery and action breakdowns will not be  supported for any conversion events that don’t happen within Facebook’s platform. 
  • In other words: if we send an ad click to your website, Facebook will not provide us with demographic breakdowns for any conversions that take place on your site.  
  • The demographic breakdowns are age, gender, and region. 
  • This will make it more difficult for advertisers to develop & act on demographic insights within Facebook. 

Google’s Response 

Google has not put nearly the amount of effort into changing its advertising tools or to alerting users to the change as Facebook. Unlike Facebook, Google has stated that its approach will be to simply stop using IDFA in its iOS apps, so users will not see the prompts. 

We estimate that the iOS 14 privacy change will have varying levels of effect on the various Google Ads products, depending on the importance of impressions to the effectiveness of those products. However, the scope of the effects remain to be seen, and will depend on two factors: 

  1. The speed with which Google completes its move to targeting ads via a Google-owned ID system that it is developing 
  1. The accuracy of the modelling that Google will use to estimate conversions from iOS 14 devices. 

On a channel-specific basis, we expect the following: 

Paid Search?

  • The effect on paid search campaigns will likely be much lower than on YouTube or GDN campaigns, though the effect will vary greatly depending on industry and targeting. 
  • Most paid search conversions happen during the first session after a click, so the pool of conversions affected by the iOS 14 change should small to begin with?
  • Most campaigns contain a blend of desktop, Android, and iOS clicks?
  • So, for most campaigns, the number of conversions that are attributed to an iOS device that clicked on an ad but converted at a later date will make up a small percentage of total conversions, meaning that the change should not affect most paid search campaigns in a significant way.?

YouTube and GDN?

  • Due to their Upper-Funnel nature, Path expects YouTube and GDN campaigns to be affected much more than paid search, and it seems that Google agrees. Per Google: “Advertisers running Display, Video and other campaigns promoting web-based conversion goals may see performance fluctuations as Apple’s ATT policies go into effect. During this time, we will be expanding modeled conversions to more iOS 14 traffic.” 
  • The use of “modeled conversions” is key here. It means that Google will estimate how many conversions a campaign should have generated from iOS 14 devices, and it will report out those conversions as if it actually tracked them. Google has already been doing this on a limited basis, but now plans to expand the scope of these estimates. 

Path Interactive’s View 

Effective digital marketing demands constant adaptation, and Path views the iOS 14 tracking changes as another in a long line of industry changes that speed the adaptation process. While the loss of tracking (along with the publishers’ response) on some iOS 14 devices will challenge many advertisers’ current strategies and optimization practices, it also opens up opportunities to revisit their strategic approach in order to find new ways to grow their business. 

In our view, the largest need for adaptation will be caused by the reduction in conversion reporting. That said, this is another opportunity for advertisers to adapt their approach. Though the information will be more difficult to acquire, we will still be able to gauge the effectiveness of Facebook impressions (and any other type of advertising) via one or a combination of other measurement techniques, such as: 

  • Correlating overall performance with advertising investment; 
  • Using Matched-Pair DMA tests, PSA tests, or some other test & control methodology . 

Apple’s changes also will speed the industry-wide shift to using first party data (personal identifiers such as email address, phone number, etc.) to target ads as much as possible. Because the average person uses 5 or more devices on a regular basis, advertisers will be able to reach targeted individuals even if they opt out of tracking on their iOS device. Any advertisers not already focusing on first party targeting should speak with their agency about it.  

We also have the option of using other targeting methods. Audience-based targeting has become the primary targeting method over the past few years, but placement- and context-based targeting continue to be effective, and deserve another look. Lastly, new ID-based targeting methods are being developed by the advertising industry, and Apple’s decision will only serve to speed those efforts up. 

In summary, Path Interactive recognizes that Apple’s tracking changes may have a significant effect for some of our clients. However, our teams are already working on new solutions to help grow our clients’ businesses. All advertisers should be doing the same. 

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