In an age where data is the new gold, concerns on privacy protection have been increasing lately. Most customers share their information without thinking twice because they trust the company they do business with. But when these entities misuse the information, they lose the trust of the customer as well as the customer's connected network.
Hence customer privacy is important more than ever because it potentially impacts the brand, disrupts the customer experience, and damages the brand reputation.
The digital era has made the world a smaller and more connected space where customers can be found with ease and the required services can be researched online. When users research, purchase and communicate about services available around them, the data is collected by their internet providers, device manufacturers, and applications installed in the device.
The data that is used is shared with third-party sources for ad targeting efforts based on the user activity. At times, the ads displayed are so personal, that we even think when this was ever been shared with someone other than yourself.
The iOS 14.5 Update
The highlight of this year's iOS update was the Application Transparency Tracking feature. This new feature prompts user authorization for all applications before tracking their data.
Before ATT, applications on iOS devices tracked users based on their IDFA number (IDentifier For Advertisers). Facebook used those IDFA numbers to target specific ads for its audience that fit the ideal customer profile for applications that want their content to be advertised. This IDFA specific targeting helps in optimizing the conversion rates as content is being targeted to their right customer profile based on the information provided by the users on Facebook.
As ATT is implemented in the latest update, this requires all applications to explicitly ask for user authorization to share their IDFA information with third-party sources. This potentially changes how social media marketing is done at its foundation, Without customer-related data, applications will have a harder time identifying the right customers for the ads resulting in a hit on conversion rates. Only applications that are allowed to be tracked get to be advertised to the users. This changes the entire fabric of how data is being handled online.
Facebook's Impact
Upon the release of the update, Facebook was very vocal about how it is going to impact their business significantly. The company believes that given a choice, users will choose not to be tracked. The company added that the feature does not give the content about the benefits of personalized ads for its users.
While estimating the best case, base case, and worst-case scenarios, the company is likely to have a hit of 7% on their revenue by Q2 2021 for their base case. Apple's ATT restrictions will govern campaign tracking. Facebook has stated that it believes its ability to personalize targeting on Facebook Audience Network, contributes to about ~50% of an ad channel's CPM prices.
This move changes the landscape of how internet companies work and Facebook went ahead with an ad criticizing Apple for its anti-competitive behavior
But Apple did not stay silent, They believe that customers have the right to be in control of what data they choose to share and with whom they want to share.
The Future for Marketeers
If you run a successful online store and have a sleek app that makes shopping a breeze,
Most of your sales come from paid ads on social media, and your usual process involves retargeting customers who open your app but leave without purchasing anything. With this process, you’re able to track user activity across apps and optimize your ad spend as you see what works and what doesn’t.
The iOS update prevents applications from accessing the IDFA data, making it harder for these businesses to convert customers.
How can Marketeers adapt to this change?
While this change could impact current ad campaigns, and the size of its impact is still somewhat uncertain, there are a few areas marketers can still lean into and optimize for the right audiences:
While the times ahead are uncertain and may not seem as ideal for marketers and advertisers, the industry is likely to evolve and find ways to reach prospective customers. As Apple rolls out this update, we’ll be paying close attention to how advertisers respond and will continue to update this post in the future.