2023 Digital Advertising Outlook
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The only constant in digital marketing is change. The most recent example is Apple's announcement that iOS 14, an update that changes the way apps ask for and collects user data, is launching in early spring. Basically, this update requires each person using an Apple device to give consent that their user and device data can be tracked by each app individually.
As you can imagine, this is causing quite a stir for digital marketers and platforms like Facebook, who are concerned that this will impact how we can target campaigns and attribute results across apps. Though these changes may seem daunting, there's a path forward. One thing to keep in mind; this change will only impact iOS app traffic, most specifically campaigns focused on acquiring new customers, which in AdRoll's impact analysis is actually a small portion of traffic. Not only that, but our customers will see minimal impact based on our machine learning's ability to optimize toward available traffic sources based on our customers' goals.
Here's everything you need to know to prepare your e-commerce brand for the iOS 14 update.
IF YOUR TIME IS SHORT:
Suppose an iPhone or iPad user does not want their iOS apps to track or collect their browsing data (also known as Identifier for Advertisers or IDFA). In that case, they can go to "Settings" and opt-out of tracking.
However, once users download iOS 14, apps will be required to ask users for permission to collect and share data via an App Tracking Transparency (ATT) pop-up prompt. By opting out, users can completely block their data from being shared with the apps they use — essentially limiting all personalized advertising, retargeting, segmentation, lookalike audiences, and exclusion targeting.
Upon initial launch, a smaller pool of users opted-in will limit marketers' ability to target and attribute campaigns that include app placements. This will have the largest impact on Facebook campaigns that include app placements.
There's a good chance that all of this is inspiring feelings of stress and panic. Keep reading! We'll get to concrete actions you can take to minimize the impact on your campaigns.
Apple has long branded itself as a privacy-first tech company, so the changes to their IDFA were not unexpected. In the last few months, the company has:
Apple's transition to a more privacy-friendly approach to technology is in line with new data regulations and browser updates stemming from concerns about election interference, political polarization, and social media companies' responsibilities.
iOS 14 is simply the latest step in Apple's strategic stance of demonstrating that users should have the power to take back control of their digital footprint. In the iOS 14 announcement, Apple said, "Privacy is a fundamental human right and at the core of everything we do. That's why with iOS 14, we're giving you more control over the data you share and more transparency into how it's used."
For a consumer privacy 101:
iOS 14 will have far-reaching effects, especially for:
E-commerce companies rely heavily on Facebook advertising for two main reasons — it's affordable and offers enormous reach. With the average cost per click for a Facebook ad being approximately 33 cents, smaller companies with limited budgets can easily develop Facebook ads and still capture thousands of users' attention.
Compared to newer social media platforms such as TikTok or Snapchat, Facebook's ad platform has evolved into a well-oiled machine providing advertisers with robust information for optimization purposes and easy access to hyper-relevant targeting.
With the iOS 14 update, Facebook will see significant limitations to their existing tracking capabilities — specifically, they will no longer have access to data on what their iOS users click or search for outside the platform. Because of the reduced available data, Facebook's dynamic ad units — which include specific products that users have shown an interest in — will also be disproportionately affected. For users who opt-out of tracking, Facebook will be unable to determine the impact of its ad campaigns on eventual conversions.
Given these new limitations to Facebook's targeting audience and ad platform, iOS 14 will force marketers to think outside the proverbial blue and white box. They'll also have to look forward to what we already knew would be a more privacy-centric future and find ways to target customers in relevant but less invasive ways.
While there's still a lot of uncertainty around iOS14 and its actual impacts on brands, we have some recommendations to help marketers prepare, strengthen their campaign strategy overall and minimize the effect on their bottom line.
First: Don't panic. We're all in the same boat, so think of this update as the start of a new era for the digital marketing world. We know that it's in everyone's best interest to find a way forward to empower brands to market and sell online and respect users' privacy. AdRoll is on the front of helping to create this solution, and we are highly optimistic.
Here are several action items you can do right now to prepare:
According to Facebook, the most urgent thing you'll want to do is verify your domain in Business Manager. This is especially important if you have pixels used by multiple Business Managers or ad accounts. By verifying your domain, you can ensure that the iOS 14 update won't disrupt your ability to configure conversion events.
Take a quick look at how your acquisition budget is currently being spent. Does it rely heavily on Facebook, particularly campaigns with app placements? Brands that rely on Facebook advertising will find themselves in a tougher position than those who diversify their marketing budgets between various types of social media ads, web display ads, email marketing, and direct mail, for example.
Therefore, if your entire digital marketing strategy revolves around Facebook ads, you'll want to start investing in other channels as soon as possible. You don't have to do away with Facebook ads completely (remember: the iOS 14 update will only affect iPhone users), but start exploring other marketing opportunities, such as digital events, video or podcast content, a user-generated content campaign, or organic social media marketing can only help you drive more site traffic. Expand your funnel, and you'll capture more leads.
Just driving new site traffic alone isn't enough – every marketing effort you implement should contribute towards the goal of capturing a lead's email address, phone number, or both. By gathering this valuable first-party data, you'll be able to use personalized Facebook retargeting ads on them and communicate with them more directly through other channels like email and SMS.
For more on acquisition marketing:
Low cost and highly compelling when done right, email marketing has always been touted as one of the most valuable marketing tools. With the iOS 14 update, the almighty branded email has become even more relevant and useful (especially for retargeting purposes!).
Once you've successfully earned the email address of a potential customer, the possibilities are endless. You can use emails to:
Pro tip: We predict more brands will start to leverage email marketing. Given concerns over data privacy, marketers must be meticulous about obtaining permission from shoppers before you add them to your email list, as well as capping email frequency to no more than one blast every few days. Stand out by being respectful of peoples' inboxes — the last thing you want is to come off as spammy.
To learn more about how changing global data privacy laws affect email marketing:
In the first few weeks of the iOS 14 update, you might find it tricky to attribute conversions correctly. As a result, you'll want to start thinking about other attribution sources.
Beyond reviewing Google Analytics (which won't be affected by Apple's changes), consider developing post-purchase surveys to better understand whether Facebook ads motivated potential customers to check out. This could easily exist as a pop-up on the checkout page or be included in a post-purchase receipt email.
If you own a branded app, you must publish a privacy disclosure in your app description explaining what user data you collect and how you use it. You can prepare for the opt-in/opt-out pop-up by running A/B tests with different language on why your users should opt-in, helping you determine what copy to use when the time comes.
For marketers running Facebook ads, you must narrow down your conversion events to eight. Facebook will be limited to eight conversion events per domain, which means ad sets not using these chosen eight events will be automatically paused when iOS 14 rolls out. You'll need to manually rank each conversion event within Ads Manager, prioritizing them for tracking and optimization.
We won't sugarcoat this fact: The iOS 14 update will inevitably complicate your 2021 marketing strategy. It could very well mark the end of Facebook's hegemony and the e-commerce industry's reliance on social media ads. We predict retailers will pivot away from over-reliance on single channels and start developing campaigns that span various channels based on their ability to measure and attribute results. We also think this will lead to an increased focus on brands owning and gathering data themselves, rather than relying on third-party sources.
This doesn't mean your sales numbers have to suffer or that you have to rethink your customer acquisition tactics completely. The best move is to stay calm and be ready to pivot your approach — there will continue to be new restrictions and concerns over data privacy, and the brands that remain nimble and creative in the face of these massive changes are those that will win.
For more e-commerce tips and tricks, check out AdRoll's Marketing Resource Library.
Last updated on September 16th, 2022.