iOS 14 and Facebook Ads: What We Know

3 weeks ago 34

You’ve undoubtedly heard that Apple is making big changes to data tracking permissions in iOS 14 that could significantly impact Facebook advertisers, publishers, and app developers. You’ve surely heard of this news in stark terms, that advertising will be less effective and businesses will suffer.

What’s true? Let’s be very clear: WE DON’T KNOW.

We know some things. I shared a video that detailed my initial impressions. But there’s a lot happening, and I want to make sure I fully understand how this might impact you.

The point of this post is to help walk you through all of what I know about this to help you prepare.

What concerns me is that Facebook is clearly concerned. Based on their response, I’d even call it panic. And why would they panic? If these changes do in fact make advertising less effective, advertisers will spend less. If advertisers spend less, Facebook takes a big hit to their revenue.

This certainly has my attention, and it should have yours. But the sky is not falling (yet, at least). Let’s make sure that we understand what’s happening and prepare ourselves the best we can.

Ready for this monster topic? Let’s do it…

The iOS 14 Update

Privacy and data usage take center stage in the latest updates to Apple operating systems (iOS 14, iPadOS 14, and tvOS 14). Within each app’s product page, users will be able to learn about how an app uses their data. Developers will also be required to provide details on their privacy policies, the data they collect, and how they intend to use it.

These updates seem harmless enough — if not necessary. But the iOS 14 change that is most likely to impact Facebook advertising is related to permissions. Going forward, apps will be required to get permission from users to track them or access their device’s advertising identifier.

Here’s where it gets interesting. Getting permission isn’t as simple as a buried paragraph on your privacy policy. Developers can’t flash an announcement with a big “OK” button and a small link to update your settings. Users will need to explicitly opt-IN (not opt-OUT) to provide these permissions.

When it comes to privacy and data collection, Facebook tends to work in an opt-OUT fashion. They may alert you to the data that is collected and how it is used, but you need to update your privacy settings to opt-out of these practices (almost no one does this).

The main exception to this is when you use an app that integrates with Facebook’s systems. In this case, you are normally prompted for more explicit permission opt-in.

The Apple prompt will function more like a Facebook app integration permission flow and will make it clear that the app wants permission to use your data with two simple buttons:

Allow TrackingAsk App Not to Track

This prompt will appear when using all iOS apps. That includes:

Apps within the Facebook family (Facebook, Instagram, Messenger, WhatsApp)Apps that monetize with Audience Network, a placement utilized by Facebook advertisers

Examples of data tracking that will require user approval include (from Apple’s announcement):

Displaying targeted advertisements in your app based on user data collected from apps and websites owned by other companies.Sharing device location data or email lists with a data broker.Sharing a list of emails, advertising IDs, or other IDs with a third-party advertising network that uses that information to retarget those users in other developers’ apps or to find similar users.Placing a third-party SDK in your app that combines user data from your app with user data from other developers’ apps to target advertising or measure advertising efficiency, even if you don’t use the SDK for these purposes. For example, using an analytics SDK that repurposes the data it collects from your app to enable targeted advertising in other developers’ apps.

Facebook’s Reaction

If you are unsure whether the iOS 14 update has the potential to cause chaos, observe Facebook’s major PR reaction.

In a post called Speaking Up for Small Businesses, Dan Levy, the VP of Ads and Business Products, claims that the “new iOS 14 policy will have a harmful impact on many small businesses that are struggling to stay afloat.”

Levy believes the changes will impact businesses in these ways:

Force businesses to turn to subscriptions and in-app paymentsMake advertising less efficient and effectiveCause a loss of personalization that could result in 60% fewer website sales from adsThat loss of personalization could lead to a drop in revenue by 50% resulting from Facebook app install adsMake it more difficult for small businesses to reach their ideal audience, limiting growth

Facebook created a page for small business owners to “add your voice” in opposition to the iOS 14 updates. Facebook even created a toolkit to help you share posts, videos, and stories to #SpeakUpForSmall businesses.

The emphasis, if you haven’t noticed, is on small businesses. Facebook claims that the greatest impact will be felt by the most vulnerable businesses, rather than the big brands with deep pockets.

Impact to Audience Network

Facebook Audience Network is a network of ads that appear mostly on mobile apps, outside of the Facebook family. There are two primary sides to Facebook Audience Network: Publishers, who place ads on their apps (and sometimes mobile websites) to monetize their product; and advertisers, who spend to reach their targeted audience while using these apps.

A post by AdScholars helps explain how this impacts Audience Network:

Apple assigns IDFA or Identifier for Advertisers to an iPhone across apps. This tracking mechanism is basically their cookie and advertising platforms rely on the data to target ads… This identifier was always present by default for iOS users but Apple’s new privacy change means that users cannot be tracked by default anymore. Many advertising industry insiders believe users will refuse… data tracking permissions if given a choice. This means no data for ad targeting which eventually will make ad placement a task. Fewer ads on Facebook’s Audience Network will lead to less revenue for publishers.

In Preparing Audience Network for iOS 14, Facebook says that they “will continue to serve ads, however our ability to deliver personalized ads on iOS 14 will be limited.” They tell publishers to expect ad revenue to decrease.

How bad will it be? Facebook says it “may render Audience Network so ineffective on iOS 14 that it may not make sense to offer it on iOS 14 in the future.” Wow.

That sounds bad for publishers who monetize their apps. What about advertisers who use Audience Network among their ad placements to reach their audience?

According to Facebook, the ability to deliver targeted ads via Audience Network will be impacted. Some users may not see ads while others may see less relevant ads. The result should be lower CPMs, which means less revenue for the publishers.

That may mean lower CPMs for the advertiser as well, but it certainly sounds like this placement will provide little bang for that minimal buck.

Now, this is a big deal if you monetize your app with Audience Network and rely on that revenue. But, advertisers have seen inconsistent results from this placement. I’ve found it’s prone to accidental clicks, bot clicks, and click fraud.

I’ve also seen that the percentage of ad distribution to Audience Network is mostly negligible — but that’s if I use the placement at all. I often deselect it, particularly if I optimize for traffic or reach.

So, from an advertising perspective, is this it? Unfortunately, the issues with Audience Network are only scratching the surface…

Preparing for iOS 14

In a blog post to advertisers, Facebook announced a series of their own upcoming changes to address the iOS 14 update. While it was looking as though the impetus of this update would fall on Audience Network and mobile apps, Facebook indicates that this change “will have hard hitting implications for businesses that advertise on mobile devices and across the web.” (emphasis mine)

The posts goes on to say that once Facebook and Instagram are forced to show Apple’s prompt to users of the Facebook family of apps, “those that optimize, target, and/or report on mobile web events from any of our business tools will be impacted.” So, the impact is likely to extend beyond Audience Network.

So, we are now talking about the impact to advertisers as a result of people not giving Facebook’s apps permission to track them. It will, as Facebook says, impact optimizationHow you optimize impacts who sees your Facebook ad. Facebook will show your ad to people most likely to perform your desired action., targeting, and tracking across the mobile web. Why?

Imagine a user opts not to allow the Facebook or Instagram app to track them. They click a link shared to their news feed. We then, I presume, end up with a black hole. Facebook can’t track that user’s activity on the websites clicked from Facebook so that activity can not be used for targeting and conversion tracking.

Remember that this is mobile only. If a user visits your website directly via desktop or clicks a link from desktop on Facebook that drives to your website, the Facebook pixelThe Facebook pixel helps advertisers track events that occur on their website and reach people who performed those events with ads. should be functional. That is, of course, if local laws and browser settings allow it. That’s a whole different issue.

Back to iOS 14. Facebook is making several changes to prepare for this update that will go into effect in early 2021. Let’s cover those now…

Event Management

First, Facebook is making a couple of changes related to events occurring on iOS devices once Apple begins showing the permissions prompt. “Events” refer to actions on your website or app, typically reported using the Facebook pixel (on your website) or Facebook SDK (on a mobile app). Examples of events include purchase, complete registration, lead, and many more.

Aggregated Event Management: It’s unclear what this actually is. Facebook says this will “help you measure campaign performance in a way that is consistent with consumers’ decisions about their data.” I’m assuming this has something to do with grouping all events (mobile or pixel) performed on devices running iOS 14 since that information is likely to be incomplete.

Event Limits: Advertisers will be limited to EIGHT conversion events per domain — including pixel eventsPixel events allow you to track specific actions on your website that can be used for reporting, targeting, and optimization. AND custom conversionsCustom conversions let you create rules for events or URLs so that you can better track and optimize for specific actions with Facebook ads.. Currently, no such limit exists.

This is where it gets weird (if it wasn’t weird already)…

Facebook indicates that no changes will need to be made to your pixel or Conversions API implementation. Instead, all changes will occur within Ads Manager in early 2021. There, you’ll configure your eight priority events, ranking them in order.

What happens if you have ad setsAn ad set is a Facebook ads grouping where settings like targeting, scheduling, optimization, and placement are determined. optimizing for events that aren’t among those primary eight? Those ad sets get paused.

Additionally, consider a situation where a visitor comes to your website (page view), goes to the product landing page (view content), begins the purchase process (add to cart) and completes the purchase (purchase). Facebook will only report on the purchase — or the highest-ranking event.

Now, maybe reporting only the highest-ranking event in a series isn’t a huge deal. We can make some assumptions. If you purchased, you likely also added to cart and viewed content. But, there are undoubtedly some reporting and optimization issues here if you start digging. For example, it seems you won’t be able to identify if you have certain products that have a high purchase abandonment (e.g. adding to cart but not completing purchase).

I also have a really hard time understanding the 8-event limit. First, we know that you can still differentiate product details with parameters. Most businesses can get away with only eight pixel events. But that number includes custom conversions? That’s a big blow to product-specific optimization and tracking.

At the very least, it seems we might need to significantly restructure the way product-level optimization occurs. It’s unclear if Facebook will make any changes to their systems to help streamline such a restructure.

An important question: Does this only apply to iOS traffic? If so, maybe it’s not quite as impactful (though trying to manage this separately sounds like chaos). Still, I see no indication from Facebook documentation that these event changes only apply to iOS 14.

I can’t help but keep asking: What does this have to do with iOS 14? Why will we now be limited to eight conversion events? At this moment, it doesn’t feel connected or make a whole lot of sense.

Regardless, plan for eight events per domain. And to avoid any other issues with this rollout, make sure you get your domain verified (follow that link since I’ve covered this before).

Delivery and Optimization

First, the obvious and unspoken point: If Facebook is tracking fewer events, it will be more difficult to effectively optimize your ad sets. Advertisers optimize for an action so that Facebook shows their ads to people most likely to perform that action. But volume is necessary (or you’ll fail to exit the learning phase).

Outside of the likely impact to optimization due to an expected drop in event volume, Facebook is making changes to Value Optimization. VO allows you to bid for your highest value customers, rather than a specific action only.

If you haven’t used or heard of Value Optimization before, you aren’t alone. It’s used mostly by advertisers with the highest volume and budgets.

Why? To be eligible for Value Optimization, you must satisfy these requirements:

Have an active pixel, SDK, or product catalogSend and optimize for Purchase eventsGenerate 100+ optimized purchases over the last 7 daysHave at least 10 distinct values over the last 7 days (cumulative purchase values)

You undoubtedly have a pixel and send/optimize for purchase events already. But the 100+ purchases and at least 10 distinct values over seven days is going to limit whom this applies to.

If you do use VO, a value set will need to be enabled in Events Manager. Turning this on immediately uses up four of your eight events used for optimization.

Why four? No idea. But using VO may help you optimize more efficiently for high-value customers (assuming you qualify).

Dynamic Ads

Facebook says that there aren’t any immediate changes you need to make if you utilize dynamic ads. That said, expect performance and audience sizes to suffer when running retargeting campaignsThe campaign is the foundation of your Facebook ad. This is where you'll set an advertising objective, which defines what you want your ad to achieve.. You shouldn’t see much impact to broad targeting campaigns.

To prepare, Facebook suggests using only one pixel per catalog and to avoid links in your catalog that send users to another domain.

Measurement

First, we’ve known for a while now that Facebook is moving to a 7-day click and 1-day view attribution window. What this means is that Facebook reports on a conversion, by default, when a user sees your ad without clicking and converts within a day or clicks your ad and converts within 7 days. This is moving from a 28-day click and 1-day view window.

You should still have access to the 28-day window now. If you customize your columns in ads manager, you can add columns for multiple attributionAn attribution window is the number of days between when a person viewed or clicked your Facebook ad and subsequently took an action. windows, including 28 days.

Every business is different. Get a sense of how many of your conversions tend to be beyond a 7-day click because those are about to go away.

Once the iOS 14 updates go into place, Facebook is expecting a loss of conversion reporting. As a result, Facebook will utilize modeling to help fill in the blanks.

From Facebook (emphasis is mine):

Statistical modeling will be used for certain attribution windows and/or metrics to account for less data availability from iOS 14 users. In-product annotation will communicate when a metric is modeled.Certain attribution windows will have partial reporting and metrics will not include all events from iOS 14 users. In-product annotation will communicate when a metric is partial. This will launch in early 2021.

It’s unclear how this will be displayed and how Facebook will handle this. Essentially, Facebook knows that your conversions are underreported, and modeling helps them understand by how much.

Advertising for Your App

Facebook also expects the iOS 14 update to impact the effectiveness of advertising that promotes app installs and engagement. If you run ads to drive conversions within your app, it is recommended that you update to Facebook’s SDK for iOS 14 version 8.1.

Updating to the latest version of the Facebook SDK for iOS will allow you to personalize ads delivered to people using iOS 14 devices and continue to measure and optimize for app install ads, among other things.

The biggest change is that Facebook will require advertisers to create separate app install campaigns for devices running on iOS 14. Additionally:

Your app can be associated with only one ad accountThe same ad account can be associated wih multiple apps, if you own multipleEach app is limited to 9 iOS 14 campaigns at onceEach campaign is limited to 5 ad sets of the same optimization typeAuctionFacebook uses an ad auction to determine the best ad to show to a person at a given point in time. The winner of the auction is the ad with the highest total value, based on bid, estimated action rates, and ad quality. is the only buying typeThere are two buying type options when determining how you will pay for a Facebook ads campaign: Auction and Reach and Frequency. available

To be clear: These limitations ONLY apply to app install ads on iOS 14. This does not impact other campaigns.

There’s actually quite a bit more documentation for app developers and advertisers on this topic here, and Facebook seems to be updating this information quickly.

My Concerns

Look, I’m not going to lie to you (do I ever?). I’m concerned.

I’m most concerned about negatively impacting or even losing some of the strategies that have made my advertising so successful. Most specifically: Targeting.

I thrive on microtargeting my most engaged audience. I create audiences based on pages visited and quality of visit, and I have a ton of success with this approach.

But, let’s say that suddenly my volume for these audiences is cut in half. Additionally, audiences for conversions become less reliable because they leave out the people who refused tracking. This would hurt.

All true. But, it would force me to reassess and maybe change my ways. It would force me to get outside my comfort zone and try something new.

What’s Going to Happen?

If after reading all of this, you still don’t know precisely how the iOS 14 update is going to impact you as an advertiser, GOOD. It shouldn’t be clear. It’s not clear. We really won’t know until all of this rolls out — and we’ll probably need a few months after that to get an accurate measure.

Facebook threw around some scary stats related to how this might impact small businesses, but we just don’t know. Don’t freak out yet.

My best summary is this:

Updates to iOS 14 will lead to less tracking of people on mobile devices. This will impact the pixel and everything associated with it (conversion tracking, optimization, targeting). It will impact mobile app ads. Audience Network publishers will take a hit, and the placement may be less effective. This may even spill over to location targeting and actions performed within the Facebook app.

All of these things may be true, but we just don’t know about the extent to which it is true. It could be a small blip or it could be catastrophic. And that may be the case for the entire industry, or it may differ from business to business.

Lots of things may impact the impact on you.

How many people in your audience use iOS devices? How many will opt not to be tracked?

How much targeting will we lose? Will this force us to make adjustments? How will our new efforts fare?

How much conversion reporting will we lose? If we’re still getting these conversions, but it’s not attributed directly to our ads, how much does it matter? It certainly matters some, but how much?

If the volume of events impacts optimization, how much will efficiency suffer? Will it suffer at all? If it does, how will we adjust?

How will you adjust to using eight conversion events? Can you get by, or will it negatively impact your results?

Bottom line: I see this as a dress rehearsal. Maybe the impact will be minimal for now. But, this train started moving with GDPR. More changes will be made. Emphasis on privacy and data tracking is not going away.

I have a hard time believing that the Facebook ads market is going to collapse. New tools will be created to solve problems. If advertisers initially drop out, that decreases competition and CPMs.

And maybe that takes us back to small businesses. Maybe they will suffer initially. More accurately, I’d suggest those who are less savvy, regardless of business size or budgetA budget is an amount you're willing to spend on your Facebook campaigns or ad sets on a daily or lifetime basis., are most likely to struggle.

But, none of this is clear. We can only predict and prepare. I hope this post helps.

How Big Could the Impact Be?

While we don’t really know how much these changes will impact Facebook advertisers, we can evaluate the size of the Apple iOS mobile audience to determine the pool of users we’re dealing with. We can do this using Facebook’s Audience Data.

You can uncover the audience of Facebook users on iOS when building an audience in an ad set. Under Detailed Targeting, select the Browse option, then Behaviors → Mobile Device User → All Mobile Devices by Operating System.

This data indicates the primary mobile device used to access Facebook (there could be people using multiple device, but there is only a single primary device associated with a user).

We can use this data to evaluate differences between potential audience groups. As a very general example, we can see that the potential impact would likely be much more significant in the US than it would be elsewhere:

These differences can be assessed for your own advertising by selecting whatever applies for the normal audience you target. Of course, what we don’t know is how long it will take for the entire user base to be active on iOS 14 or higher, and of those users, how many we should expect to opt-in to tracking.

Links and Resources

This is A LOT! I summarized the best I can, but I’m pulling from the following articles. Feel free to click through for more details:

Apple Developer: User Privacy and Data UseApple Developer: App privacy details on the App StorePreparing our partners for iOS 14: Mobile Web AdvertisingEligibility Requirements for Value OptimizationHow Apple’s iOS 14 Release May Affect Your AdsFacebook Domain Verification: Link Ownership ControlUse the Facebook SDK for iOS, App Events API and Mobile Measurement Partners to Reach Devices on iOS 14Preparing our Partners for iOS 14: Impacts to App Advertisers and DevelopersUse Facebook Pixel to Reach Devices on iOS 14Preparing Audience Network for iOS 14Explained: Why Facebook thinks Apple’s iOS 14 privacy push will have a severe impact on businessSpeaking Up for Small BusinessesBreaking Changes For SKAdNetwork Campaigns

Your Turn

What’s your interpretation of how this will impact Facebook advertising and your business?

Let me know in the comments below!

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