Apple iOS 14 Privacy Update: Impact on Advertisers

By Andrew Heisler

The New iOS 14 Consumer Privacy Update

2021 is the year of change, especially for advertisers. Apple is rolling out a new customer privacy update with its iOS 14 that gives users the ability to opt-out of ad tracking.

What will opting-out mean for paid marketing? The full extent of the iOS’s customer privacy implications are unclear. However, it is likely that PPC advertisers will lose critical mobile iOS data they’ve relied on to measure campaign success and remarket to their site visitors.

What will happen with the new iOS 14 update?

When Apple mobile users update to the new iOS 14, they will be given the choice to “opt-in” to personalized ad tracking. Effectively signaling that they are, or are not, okay with apps tracking users’ data. Users will also receive an update about how each app uses their data within Apple’s App Store.

Previously, users were auto-tracked, but had the ability to “opt-out” of data collection and data sharing from various apps and websites. The process was ambiguous and often tucked away in an app’s settings.

This change gives iOS users the power to choose how their personal data is used from the start. Experts believe that most users will opt out of ad tracking data if given the option.

While this iOS update is likely to affect Facebook advertisers the most, it could impact all paid platforms to an unknown extent. What is known is that digital marketers will need to establish new workflows, benchmarks, and best practices.

Why is the iOS 14 update happening?

Apple’s iOS 14 updates are part of a larger movement to give digital consumers more control over how their data is used online. We’ve seen recent consumer privacy laws being implemented in Europe (GDPR) and California (CCPA).

When will the iOS 14 consumer privacy update go into effect?

Apple never provided a strict target date, although sources point to early 2021. Enforcement could begin as early as mid-January.

Who will be most affected by the update?

All advertisers will be impacted. But those who advertise on apps, rely on measuring specific actions taken on their websites, or use website retargeting will be most affected.

The updates will impact advertisers that:

Advertise their mobile apps
Run ad campaigns with a specific conversion goal (such as a purchase or lead)
Track and report on conversion data from the Facebook Pixel, LinkedIn Insight Tag, etc.
Rely on data tracking to retarget website visitors, or businesses that use conversion data to build lookalike audiences for prospecting
Run across multiple ad accounts
Seek prospects whose purchase cycle is longer than seven days

Please note, these changes likely will NOT affect the following AS MUCH:

Android users
Desktop users
Users that opt-in to tracking
Advertisers that use broad, interest-based targeting
Advertisers that use first-party data collected directly from consenting customers

Biggest Changes to Come With iOS 14 Update

OVERVIEW: With most iOS users expected to opt-out of tracking, remarketing audiences will shrink, fewer data points will be available for reporting and optimizing, and overall performance will drop. Conversions will still happen, however, they will not be trackable. Facebook — and likely other platforms — will rely on aggregated and estimated statistical modeling to account for lost data. Facebook advertisers will only be able to track a limited (8) number of online events per verified domain.

Until the rollout goes live across all iOS mobile devices, the effects of these changes are speculative. However, experts anticipate the following:

Limited & under-reported data: As more people opt-out of ad tracking, advertisers will lose some of their ability to personalize marketing campaigns and report on their results. Advertisers should expect to see only partial reporting, and will likely see a significant decrease in the number of reported conversions, which will ultimately increase overall costs.

*NOTE: These conversions may still be happening, but advertisers will not be able to track, optimize for, or report on those actions. Facebook will have to rely on estimated statistical modeling to account for that loss of data.

Fewer optimization events: Before this rollout, a Facebook advertiser could theoretically track unlimited events on their site or app. Now, a maximum of eight conversion events (purchases, add-to-carts, signups, etc.) can be tracked for each verified domain.

*NOTE: The events will need to be ranked by priority; if multiple events are completed, then only the highest will be prioritized.

Smaller website remarketing audiences: As more users update to iOS 14 and opt-out of data tracking, the size of retargeting audiences will shrink. This means it will be harder to reach people who have demonstrated an interest in your business, but haven’t shared personal information. If advertisers cannot find other sources of information in order to create lookalike audiences (think emails or phone numbers), their advertising efforts will likely need to prioritize reaching broader audiences.

Decreases in ad performance: Using machine learning technology, ad platforms analyze conversion data to help improve your campaigns. With a potential loss of significant conversion data, this process will prove more difficult, and conversion-based campaigns may suffer lower performance.

Delayed reporting: On Facebook, website event reporting may be delayed up to three days.

Changes to conversion windows: Previously, Facebook gave advertisers the option to report on conversions as far out as 28-days post-click/view. But now, only a seven-day click and one-day view window will be supported.

*NOTE: As a result, advertisers should not only expect to see fewer overall conversions, but also expect delivery to be less efficient. This could also affect conversion windows within Google Analytics. We are waiting for more information from Google on how these changes may affect how we tag our URLs with UTM parameters.

Four Ways to Prepare for the iOS 14 Privacy Update

OVERVIEW: While we wait for additional details about the new update and analyze its impact on advertisers there are four things you can do to prepare for the update:

Verify your domain on Facebook.
Identify the eight most important conversion metrics, and then rank them by order of importance.
Prepare yourself, your teams, and your leadership for an adjustment in performance expectations.
Consider installing the Facebook Conversions API (CAPI), a tool that lets businesses share web activity data directly from their servers to Facebook’s.

Final Thoughts on How Apple’s iOS Update Will Impact Advertisers

There’s no need to panic just yet. Until the update is fully rolled out, we won’t know how many people will opt-out of data tracking, or what impact that will have on advertisers.

We do know that businesses’ abilities to reach, understand, and engage with prospects via mobile website retargeting will likely be limited.

We also know that the level of data granularity that we’ve grown accustomed to on Facebook will no longer be possible. The updates will make the user data restricted, aggregated, and/or delayed.

Lastly, first-party conversion data from consenting users will be more important than ever. Advertisers should still be able to create remarketing and lookalike audiences from data sources like CRM.

While this update has the potential to reshape the paid media landscape considerably, it will take some time for advertisers to comprehend the extent of that reshaping.