Commentary

Apple's Tracking Prompt Disrupts The Advertising Industry

With the latest iOS update, Apple announced a new tracking prompt that will require users to accept permissions from apps to track their actions.

Facebook is concerned that this prompt — which they will need to include on all their apps and services, to be available to download in the App Store — is phrased in a way that will make it more likely for people to accept, which would therefore make tracking user activity much more tumultuous. This will also give brands less information to inform optimization and strategy, impacting bottom-line performance.  

This push toward privacy will inevitably change tracking within Facebook, but also in the digital ecosystem at large as consumer tracking is threatened.

Advertisers will have to adapt to this audience-first privacy approach and shift more focus toward consumer behavior, first party data and persona modeling than before. Looking completely from a direct-response lens will no longer be an option, as the user-journey data is about to be truncated.

advertisement

advertisement

There will need to be a solution for attribution across channels, and advertisers/brands will need to holistically approach media and agree on a unified view of tracking. Apple has not released the effective date for this prompt, but the change is rumored to go into effect as early as Q1. The attribution change has already begun rolling out across Facebook and Instagram.

What changes with this prompt?

Facebook has announced several changes that will be made to the Ads platform. Perhaps most importantly, the company has announced that these changes will not just be applied to ads that target iOS users, but will be implemented platform-wide and affect targeting to all operating systems, including Android/Desktop users.

Platforms like Snapchat, LinkedIn, Twitter, Pinterest, and all paid-social channels will need to make their own set of changes in response to Apple’s updates, and we foresee more impact to overall digital media as this prompt goes into effect.

Remarketing costs will increase on all platforms with reduced audience sizes across the board. This will in turn affect assisted revenue impact on search/display and other paid touchpoints, so this news will substantially affect paid-media plans and put more emphasis on first-party data.

Attribution will change

Facebook will now model the first-day view-through window, and only receive 7-day click-through data after this prompt is rolled out. A slow rollout of this has already taken place this week. However, using the compare attribution windows, historical data is still available.

What does this mean?

  • Historically, Facebook and Instagram have been view-through channels -- not as likely to convert as users targeted from search ads, but a major driver of assisted revenue, site traffic, low CPMs, and a sizable audience pool ideal for awareness and brand lift. Removing view-through and the introduction of a modeled algorithm will weaken understanding of the holistic user journey, including the impact of platforms on assisted revenue and ROAS across channels. While modeled data will use historical information to estimate the impact, the insight will be inferred rather than actual. Trusting the Facebook algorithm to predict performance is a digital trust test that brands are not fully ready to embrace. And given the removal of the longer 28-day click-through and 28-day and 7-day view-through attribution windows, advertisers will need to convert users faster or dive into first-party data to analyze trends.

Remarketing costs will increase

  • Higher price points: As users need to "opt in" to be a part of a remarketing pool and there is less data to work with, costs will increase and remarketing segments will decrease across the board. This will also reduce the effectiveness of lookalikes and put more emphasis on first-party data and persona targeting. First-party data will be integral, as there is more robust data on customers, and marketers can control the opt-in/opt-out process in a CRM list. By qualifying the user ahead of media launch, the shortened attribution window will not be as dire and match rates will increase, decreasing costs and increasing the likelihood that end users will have a high lifetime value and convert. Analysis of CRM lists ahead of time will ensure personas are developed, and that marketers' media strategy is set up without relying on platform lists.

What does this mean?

  • Remarketing lists will decrease in size. As a result, audience size will shrink and costs will rise. Marketers must ensure CRM lists are properly vetted and prepare for the impact of higher bids in the market, for social, remarketing and prospecting segments across the board. Importantly, this is not just an iOS change, and Facebook has emphasized that these changes are happening with iOS, Android, and desktop users for data compliance. This might push more traffic to platforms like LinkedIn that attract a more nuanced audience, with targeting such as employment status, LinkedIn Groups and specific audience targeting that doesn't rely on remarketing and lookalike modeling as much as other channels. As more brands look to other channels, there will be more competition on these platforms seeing these shifts.

Marketers need to be more meticulous about events

  • Facebook will only allow eight events across all agencies per domain. This means all agencies and lines of business that use the same domain will need to consolidate conversions. It is very important to select events in your configurations, as there is one event that will be tracked even if a user “opts out,” which should help mitigate some of the data loss that will occur. For instance, if you select “purchase” you will still be able to see a purchase if a user opts out in the new Apple prompt, but not the add to cart/viewed specific pages if they are not part of that prioritization.

What does this mean?

You need to verify your domains in the platforms and edit web-event configurations as soon as you can to be ready for any changes coming in the pipeline. See website event configuration dashboard below. Instructions for domain verification are found here.

Effect on the industry

A change of this scale on one of the largest social buying platforms will have a profound impact on the industry beyond Facebook, and impact how brands use touchpoints holistically.

Reporting will need to move beyond using 14 days for display, 28 days for social and 30+ days for Google – now more than ever, brands must commit to a holistic strategy for performance measurement, particularly as privacy laws and browser updates come to fruition.

This has always been the case, as advertisers should always be diligent about aligning attribution across all channels.

However, these changes will make it even more difficult to track the user journey, prompting companies with predictive modeling and qualified audiences (such as PlaceIQ and Intent) to push the audience-first approach to the industry even further, especially as the one-day view through will now be modeled in the Facebook platform.

How marketers can prepare for these changes

  • Verify domains. Marketers will need to work with the brands/agencies under their company umbrella to select the 8 events in the configuration tool. This will most heavily impact companies with many sub-brands or agencies under their employ, a variety of important custom events, or a full-funnel strategy that takes in more than 8 events.  It also can potentially have a major effect on verticals such as education, which have an extended buyer journey/lead time. Upper-funnel success metrics will be more important to focus on moving forward. The world of direct response will have to rethink how data is modeled and agree on a unified method or focus on products such as lead generation and brand lift.
  • Unified measurement: Agency in-house analytics teams can help brands with functions including finding areas and data points with customer data platforms (CDPs) and data management platforms (DMPs) to plot the full user journey from ad impression to conversion, and conducting landing-page analyses to find the channel that is driving repeat users and customers with the highest LTV quality and retention.
  • Brands will need to fully understand their company’s unique path to conversion. This is an important first step, as well as understanding the intent/consideration cycles to optimize micro-conversions that take place earlier in the funnel. If the cycle for an application from an education brand was 29 days, now it may be necessary to optimize to content views vs. completed registrations.
  • Look at available data: Brands should be looking critically at the customer data they have available and determine how to integrate and activate it. It is possible (using first- /third-party data along with tools like a CDP) to create a unified view of the customer that will facilitate this type of deeper analysis and allow brands to put into market campaigns with robust audience criteria.
  • Change your window and look at impact: For Facebook specifically, use the compare window to begin understanding how conversions will be impacted by a shortened attribution window. Look to Ads Insights and the Conversions API as a short-term workaround while you work on your marketing strategy and figure out how to scale campaigns with these new changes. Invest time in understanding user behavior across the digital landscape and plot the user journey to find where the attribution path drops off.
  • Adjust your strategy now: For Facebook specifically, begin adjusting your strategy for bid optimization and frequency analysis, and expect the impact on dynamic retargeting for dynamic creative optimization, store locator ads and dynamic product acquisition. For apps and brands that use Audience Network, this will impact revenue and ability to see real-time events and actions. It will take 72 hours to see events post-install, which will make optimization less robust, and after each event configuration change, it will take 72 hours to see results.

These are just some of the changes that will impact marketing capabilities. Look for short and long-term solutions -- adjust as quickly as you can to the shorter windows, test to see if you can add third party tags like DCM to non-custom segments and ensure you are continuing to vet the industry in-market, as changes are happening each week.

These new methods will not kill the social industry, but they are seismic.

The pivot and push toward new attribution and privacy tracking will evolve, so the best marketers can do is adapt, and understand that audience-first privacy is a priority and CRM/first-party data is key.

Now more than ever, adapting is key to staying relevant in this ever-changing digital space.

Next story loading loading..