By Bob Myhal – Director of Digital Marketing, CBC
“The wise adapt themselves to circumstances, as water molds itself to the pitcher.” – Chinese Proverb
I don’t own a crystal ball, but it doesn’t take a fortune teller to recognize that Apple’s latest iOS 14 update (iOS 14.5) will have a significant and lasting impact on digital advertising in general, and Facebook advertising in particular.
What exactly is the latest iOS 14 update? How does it impact Facebook advertising?
As you are likely aware of by now, in their latest iOS 14 update Apple is moving towards proactively requiring app users to opt-in to allowing an app to track online behavior, and thereby customize the user’s ad experience.
On the surface this looks like a relatively minor change similar to the pervasive cookie tracking prompts websites put in place in response to the GDPR (General Data Protection Regulation) requirements. However, our expectation—and Facebook’s as well—is that most iOS app users will not opt-in to this tracking. That will result in a series of limitations and significant changes in the way Facebook ads are served, targeted, and measured. Specifically, the ability of Facebook to process conversion events and build remarketing audiences through the Facebook pixel will be diminished. As a result, all businesses that advertise on mobile apps, including automotive dealers, will be impacted by these changes.
What’s the expected impact of the latest iOS 14 update on Facebook ads?
It’s likely that the latest Apple iOS 14 update will have significant impacts on Facebook ad targeting and performance.
We expect a drop in Facebook advertising audience sizes and performance metrics. How significant a drop remains to be seen, but there is little doubt the impact will be considerable. Much of the effectiveness of current Facebook advertising campaigns is directly tied into the data gathered by the Facebook tracking pixel. The utility of the tracking pixel is critically damaged when consumers opt-out of tracking in their apps.
We expect some depersonalization of Facebook advertising. Losing part of the ability to track a consumer’s online behavior will naturally result in a lessening of personalized ad targeting. A drop in ad personalization may also result in a decline in response rates. Less-targeted ads likely equal lower engagements.
We expect limitations on the ability to reach ideal customers. For automotive dealers, this likely means restrictions on the power to segment audiences, create lookalike audiences, track conversions, and remarket based on the Facebook pixel.
How should dealerships address the latest iOS 14 update?
The largest negative impact of the latest iOS 14 update will be for those advertisers that optimize campaigns purely based on hard conversions. E-commerce advertisers are a good example. With a weakened Facebook pixel, the ability to set algorithmic-driven campaigns based on conversions becomes compromised.
Fortunately for automotive dealers, hard conversions are only one piece of the consumer-buying journey. There are other automotive marketing engagement metrics that we can still measure and optimize on. For instance, running Facebook campaigns optimized for website visits will still be viable. There are other tracking methods marketers can use such as UTM (Urchin Traffic Monitor) codes in combination with internal analytics that enable marketers to make data-driven decisions about how best to allocate digital marketing budgets.
What does the future hold for Facebook and data-driven advertising?
I’ve been involved in digital marketing long enough to recognize that the only constant is change. While Apple’s latest iOS 14 update is significant, I have little doubt that smart, results-driven advertisers will not only weather the storm, but will also be particularly well-positioned to turn these changes in the digital marketing ecosystem to their advantage.
Results will need to be monitored closely. Changes and optimizations will need to be made quickly. Well organized, nimble marketers and agencies will be able to capitalize.
There will certainly be workarounds as well. New data identifiers will emerge and digital marketers with access to identity graphs and the wherewithal to use them properly will thrive.
If you’re an automotive dealer, then you want to make sure that your marketing team or agency is on top of this and other changes coming to digital marketing. Nothing short of top-level expertise will be able to successfully navigate the waters ahead. If you’d like to discuss your digital marketing at your dealership or group, let’s have a conversation.