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Last spring, Apple introduced the AppTracking Transparency framework. Now, different companies need to provide information on how their app collects and uses consumer data. The user will then be able to decide whether they want this app to follow them and use the device’s advertising identifier or not.
Digital advertisers will not find it easy to reach their audience. As a result, they will not be able to understand the overall effectiveness of their campaigns.
Where are the social media platforms?
This change will have a direct impact on several social media platforms and businesses. But Facebook openly opposed it, saying the update will affect the growth of millions of businesses around the world. And that will prove to be a death sentence for small businesses with limited advertising budgets and no open path to reach their target audience.
In response to the above claims from Facebook, Apple has hit back. The company believes that if a business depends on deceiving its consumers into exploiting its data, it shouldn’t be praised for its policies.
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What kind of positive change is Apple handling with its iOS update?
From a user’s perspective, this change is a positive sign as they have more control over their privacy. They will be able to control how much of their data can be used and by whom.
People are welcoming such an initiative from tech companies with open arms because they are more aware of their data and how it is used. Of course, many users can opt out of this service because they do not want their data to be tracked. But it will have a negative impact on companies that specify a budget for advertising on these social media platforms.
Is all this so bad?
For some, Apple should be applauded for this effort as it gives individuals more control over the privacy of their data. But all is not well if you see the other side of the picture.
Small businesses will feel the blow directly. This is because they cannot afford advertising campaigns other than social media platforms. But we have to dig deep here.
Facebook uses different metrics to provide advertisers with data on the effectiveness of its campaigns. One of those statistics is “post-view conversions”. This metric measures how many people are viewing a particular ad but not clicking on it. Now, losing the source of this kind of information can be a big blow to Facebook. And with the iOS 14 update, that’s exactly what’s happening.
Advertisers who do not accurately measure the overall effectiveness of ads on Instagram and Facebook will turn to other platforms. These will be the platforms on which they can see the exact ROI (return on investment) of the theoretical advertising campaigns. Thus, Apple’s policy directly influences Facebook and not small business owners.
How will this impact advertising on Facebook?
Other platforms, like Snapchat and Google, haven’t talked much about this problem. But they make sure that this policy does not have too great a negative impact on their uses.
These platforms might be more supported than opposed to the iOS 14 update. But they will also feel the impact that Facebook is talking about. In fact, with this update, Facebook has less access to data. And the same goes for its customers. Now, they are unable to effectively target advertisements. These customers are also small businesses claiming they would be affected by the update.
But for many small businesses, this update hasn’t changed anything. Some small businesses do not need data as specific as the Identifier for Advertisers (IDFA). They only need the location, distance, or primary age of the user. These data are available from the Facebook application. Thus, no follow-up is required here.
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Measurements and ratios have changed
We have yet to examine the full impact of Apple’s new policy on Facebook’s revenue, but things don’t look bright for the latter. Almost all iPhone users have downloaded the latest update, and experts say most users will opt out of tracking features. This can reduce Facebook’s total revenue by up to seven percent, as advertisers won’t be able to optimize their ad targeting. There will also be delayed reports as there will be no real time data available.
Changed metric attributions and calculations
Some metrics and attributions have also changed. This happened due to data loss when users chose not to track. Now, Facebook has to rely on Apple’s SKAd Network API to get its data. And that won’t be real-time data that Facebook was able to get directly from its app.
This will cause a delay in reporting. Advertisers will have to wait at least three days to get what they want from Apple’s SKAd Network API. Thus, they do not rely on real-time data to design their campaigns.
The change is definitely scary enough, but Facebook has been very good at managing change. And it will bounce back strongly in those scenarios as well. The basic idea here is to assess the overall impact and develop strategies to deal with it.
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