iOS 14.5 and Ads: What I’ve Learned So Far

iOS 14.5 iPhone 12 feature

It’s now been five weeks since Apple launched its iOS 14.5 update, featuring Apple’s new privacy protections for users, App Tracking Transparency (ATT). The move has been championed by iPhone users tired of invasive ads, while advertisers frantically adapt to the changes, especially small businesses that rely on targeted ads.

While the changes present major challenges to advertisers around the world, privacy is an important issue that is long overdue for consideration by them.

Over the past four weeks, the two dozen Facebook Advertising accounts I manage have been affected by iOS 14.5 in various ways. Here’s what I’ve learned so far:

Tracking the Opt-Out Rate

As of May 18, Flurry Analytics reported 94% of all iOS 14.5 users who have had the option to restrict tracking have chosen to turn it off and preserve privacy. Original reports from various industry sources expected two-third of users to opt out. Although this data was collected just three weeks into the launch of iOS 14.5, the predicted estimates have been blown away, which further accelerates the need for companies to adapt.

The Effect On Audience Targeting

Facebook and Instagram ads are powerful because they allow you to target based on interest and behavior. With thousands of targeting options available to advertisers, to work effectively the system needs to be able to match the online behavior with the preselected target. For instance, people who love dogs will most likely visit sites related to dogs, which will then bucket them into the “dog-owner” targeting category.

However, when users opt out of tracking, it becomes more difficult to bucket those users into an interest or behavior group. Thus, the pool of users to target advertisements becomes smaller and results in fewer users seeing the ad. Interest and behavior groups are not completely doomed yet. Although we are seeing some decrease in performance from preset targeting, it pales in comparison to the effect on custom audiences.

Custom audiences such as remarketing are already seeing sharp declines in their audience groups. For example, an ecommerce remarketing group often targets users who “added to cart” in the last 14 days but then abandoned. This type of targeted ad typically receives one of the highest Return on Ad Spend (ROAS) ad sets, with the ability to target thousands of users.

Three weeks into the iOS 14.5 update there was a noticeable drop in ROAS. When looking at the available audience size, the iOS 14.5 update severely impacted the number of users available to target in this category. With 79% of customers accessing Facebook ads from Apple devices, the number of users in this bucket is now below the requirement to advertise.

Solutions to address these issues are resolved in real time. However, a new solution to fix remarketing issues includes expanding the client’s remarketing audience from a 14-day to a 30-day window. This solution expands the targeting pool to begin to advertise again. Testing broader remarketing audiences is another solution for advertisers to test against, as iOS 14.5 has created the need to build new baselines for performance.

The Effect On Conversion Campaigns

Conversion campaigns have been disproportionately affected by IOS 14.5 changes. They traditionally relied on the Facebook Pixel to track conversions such as form fills or purchases. The new way to track was known as Conversion API, a server-side setup that allegedly helps preserve tracking by avoiding third-party cookies. Thus far it’s clear that the conversion API can still miss conversions.

To understand the effects fully, cross reference revenue data from all sources on your Shopify site. When analyzed, the results confirmed that the conversion API is not 100% accurate in its tracking.

Cross-analysis is a powerful tool to help understand the true impact of the campaigns. Utilizing CRMs and other analytic tools outside of Facebook to get unbiased reporting remains highly effective and crucial.

The Effect on Lead Gen Campaigns

While conversion campaigns have been negatively affected by iOS 14.5, lead generation campaigns that use in-app lead forms for Facebook and Instagram have not received the same drop in performance. The most impactful difference is the dependence on the conversion API or pixel to determine a completed conversion.

While lead generation campaigns are not fully protected by the changes, this observation prompts the question of using in-app lead generation forms as an alternative to sending users to a site. For those who depend on landing pages, the instant experience feature can act as an in-app landing page that adds more context to your products or services.

Never Stop Testing

The iOS 14.5 update is a reminder that digital marketing is one of the fastest-evolving industries on the planet. While the privacy updates are a massive headache to marketers, these changes are here to stay, and rightfully so, as consumers now more than ever value privacy.

Adapting to these changes will require business owners and marketers to leverage new techniques, technologies and best practices to continue growth. Now is not the time to completely divest your Facebook and Instagram ad spend, but rather put in the work and find the formulas for success.

Dean DeCarlo is president at Mission Disrupt