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Apple’s iOS ad tracking changes can be good for brands

November 29, 2021
Prasad Shringarpure

Prasad Shringarpure is the Founder & Managing Director of Amplifyr

It’s been a few months now since the launch of iOS14 and the launch of Apple’s privacy features that were hugely disruptive for the online advertising industry, particularly for Facebook ads. If you’re unfamiliar with what happened, earlier this year Apple announced major changes to third party tracking on their devices with the launch of iOS14.

Any business that wanted to track user activity outside of their own app, would now have to get explicit consent from the user to do so. This had a huge impact on online advertising companies and Facebook in particular as users started to opt out of being tracked. This impacted personalised ads and the ability to track advertising performance.

Through the year, we’ve been speaking to advertisers who were deeply concerned about these changes. They feared this would be hugely damaging to their business as Facebook ads are an important source of growth, particularly for new emerging brands.

The good news is that so far, none of those fears have turned out to be true. There’s no sign that advertising effectiveness has reduced. Most of the changes have been in the ‘measurement’ of online advertising success. As users opt out of tracking, it’s harder to measure effectiveness of ads. So when we see Facebook advertising reports for example, metrics like ‘Return on Ad Spend’ look much worse. This doesn’t mean that ads are actually less effective. Just that there’s a lot of missing user response data (e.g.: orders on an online store).

The reality is that these metrics were always flawed. A customer’s journey to purchase a product is often complex and takes several weeks or months. Online ad reports are great at measuring immediate response e.g.: an order made a few days after someone clicked on an ad. But they’re not great at measuring long term success of advertising messages or a deeper brand connection with the consumer.

This visibility of response has been a key driver of increased online ad spending, but can often lead to poor decisions. For example, online ad budgets are often directed towards audiences that are already familiar with the brand, as these campaigns look more effective in reports. This approach doesn’t deliver incremental sales growth, as the brand isn’t growing their potential customers base. They’re just advertising to users that would’ve bought something anyway. Driving true incremental growth requires advertising to audiences that will not convert immediately.

We strongly believe in user consent and more transparency in user data being shared with advertisers, and support the general direction of these privacy changes. Although it’s hard not to see the double standard in their implementation. Apple’s own services like Siri, Apple Music and others make similar use of personal user data without the same burden of transparency. Infact, Apple runs an ad platform itself, which doesn’t require the same level of user consent for sharing data.

Apple seems to equate online advertising with spam, which is unfortunate. In the age of fake news, advertising serves a really important function. Not all businesses can make subscription models work, particularly small publishers. Nor can they hire internal media sales teams to sell ads directly. So stifling personalised advertising ends up hurting small media companies as well, not just large tech platforms like Facebook and Google.

Personalised online ads have been a huge equaliser for smaller brands. They’ve made the same tools available to emerging brands that are available to major corporations. The vast majority of Facebook’s advertisers are small businesses that use the platform to find relevant new customers.

In the short term, these changes will be disruptive for brands as current methods of measuring success won’t be as effective. In the long run however, we don’t believe these changes will impact the momentum of digital advertising. Infact, they may end up being good for the industry as brands will be forced to move away from flawed short term ad measurement and consider methods of measuring true long term sales.

The exact nature of these is still unclear. Facebook and Google are already testing advanced machine learning based techniques to measure ad effectiveness. We’ve been working with brands to implement new ways to measure advertising success. Until we have a clearer path forward, our advice to brands is to consider the long term effectiveness of advertising and not be driven by short term metrics.

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