I In recent years, Apple has taken a more privacy-focused stance in the digital marketplace, including new hardware and software releases geared toward stronger protection of user data. In fact, Apple’s most recent software announcement (expected to be released in early 2021), will start notifying users of any data it intends to share, and provides the user with the ability to opt out of data sharing. This change has come under fire by Facebook which relies heavily on data collected from users to fuel its advertising platform.
The truth is no one really knows how this is going to impact our ability to advertise with the Facebook platform, but based on their alarmed response, they obviously believe it will be significant. Now the assumption here is that once an Apple user has been provided the choice to continue sharing their data with Facebook that they will elect to keep it private.
This primarily affects how Facebook processes conversion events. When they are unable to see how users ‘who see ads’ on their iOS devices are converting (filling out forms, purchasing products, etc.), it restricts their ability to effectively optimize, report and further target the user in the future (due to the way that the algorithm works).
The biggest potential impact for advertisers that Think Shift typically works with is in how we can effectively target users. For example, say I’m browsing online for home fitness equipment to improve my physique. Because many of the sites I’m using have the FB pixel installed, and because other users exhibiting similar behavior typically converted on these sites (purchased fitness equipment), FB then adds me to a targeting list of people interested in home fitness. As a result, I start seeing ads for fitness equipment. Without the conversion information, FB will likely have a harder time knowing if my behaviors are similar to others who have purchased a product.
What we don’t know is how much these changes will actually impact our efforts. This is due to a few factors:
- As of now, these limitations are only affecting iOS devices, so FB still gets data from Android, desktop and laptop devices, and because it is people-based targeting, a user’s behaviors on a laptop device are connected to my FB account on all devices.
- No one seems to really know how much these changes are going to actually limit FB’s abilities to build audiences (as in, we don’t know how much data will be affected by these changes).
- No one seems to really know how many users are going to change their privacy settings due to Apple’s changes.
What we can say for sure is that this is part of a larger general trend in the online advertising space (think GDPR, California Consumer Privacy Act, Chrome limiting third-party cookies, etc.). Online advertising providers have gone through a data gold rush and have benefitted greatly, at the expense of both advertisers and users. However, we are now seeing an increasing response from users and government to get control of data back into the hands of users and greater data-gathering restrictions placed on advertising networks.
I believe that the glory days of hyper-targeting based on behaviors and interests are now behind us and we are beginning see a shift towards broader-based digital advertising tactics that don’t rely on third-party data.
As a result of this shift, there are a couple of considerations for weaning ourselves from our reliance on digital advertising platforms. Investments today will yield big returns as our access to third-party data is slowly eroded. The additional benefit is that these investments are into balance-sheet items – that is improvements that will continue to benefit and provide long-term value to your marketing and advertising initiatives.
First, is that advertisers need to gather and leverage as much first-party data as possible. First-party data is information that you have gathered and that you own (whereas third-party data is the information that is provided by platforms like Facebook and Google). This means getting information about your customers and audience and using that, vs. trusting digital look-a-like profiles. Plenty of organizations have begun investing in things like CRMs, databases, and marketing platforms.
The second recommendation is to reduce our reliance on paid media channels and to focus more on owned and earned digital media. This includes things like SEO, website content, email newsletters, digital sales enablement, public relations and customer experience.
For now, I would not panic about this FB thing. In the short term, I don’t believe it will have a significant impact on the way we use FB ads for our clients. That said, it’s certainly an indicator of what the future has in store for online advertising.