The Impact of iOS 14.5 on Digital Advertising Networks

Advertising
Facebook
July 30, 2021
Consumer Electronics

Key Takeaways

In April 2021, Apple released the latest iteration of iOS 14.5 which included privacy measures that digital advertising platforms have been preparing for since its introduction in 2020.

  • iOS 14.5+ Penetration: By the end of June 2021, 90% of iPhones made in the past 4 years had adopted a version of iOS 14 or higher. In order for users to allow data tracking, they must opt-in themselves, as of June 2021 only about 4% of users have opted-in for tracking. 
  • Impact on Facebook: Facebook will initially see the most changes and challenges due to their advertising model and have prepared advertisers to recognize new changes across event measurement, reporting limitations and different attribution windows. 
  • Public Sentiment: Currently, the public is less inclined to opt-in for tracking as they want to keep their data private as is aligned with the 4% opt-in rate. The main reasons people are not interested in having their data tracked are due to repetitive post-purchase messaging, wanting to see a resurgence of native ads such as print and billboards, lack of trust due to Facebook’s previous data scandals, and genuine disinterest in ads and having any content tailored to them. 
  • Impact on Marketers: 70% of marketers are saying that their ad performance has gotten worse since the roll out of iOS 14 due to a lack of reporting, lower sale generation, issues with domain ownership, lower click through rates but higher costs per click and less engagement on promotions.
  • Advertising Solutions: Marketers are getting creative and seeking solutions through increased testing on creatives, updating their data sources, focusing on lead generation, integrating omnichannel strategies, mixing campaign and ad set budget optimization, segmenting Android and Apple device targeting, merging funnels and building interactive in-app experiences.

Since September 2020, Apple has been rolling out their latest iOS 14 software. In April 2021, the latest iteration, iOS 14.5, was released which includes the privacy measures that digital advertising platforms have been preparing for since 2020.

iOS 14

From the beginning of April 2021 to mid June 2021, 70% of iPhones had adopted iOS 14.5 or higher. 

iOS 14 - Penetration Rate
Source: via Brand Metrics

After a slow launch and many iterations, by the end of June 2021, iOS 14 had been installed onto 90% of iPhones sold in the past 4 years. 

iOS 14 - iPhones

As iOS 14 has been rolling out since September 2020, the updated release of iOS 14.5 in April 2021 included the introduction of strict transparency and privacy regulations for app data tracking and collection. This update directly affects applications and developers in the following ways: 

Describing How Apps Use Data

App developers must now be transparent about how data is used and how it will be tracked if the user selects to allow tracking.

Asking for Permission to Track

Apps will have to follow the AppTrackingTransparency framework to track users or access a device’s advertising identifier.

AppTrackingTransparency (ATT) Framework

A prompt must include a statement to describe why the app wants to track user data. The user’s advertising identifier will only be presented when the user actively opts-into the tracking.

Adhering to iOS 14.5

If an app does not adhere to the new policy restrictions they will not be able to be featured in the App Store.

Apple’s new privacy features include Private Click Measurement (PCM) which restricts the data that can be shared across platforms.

How do Facebook & Google track data on specific ads with this restriction?

The SKAdNetwork

An ad network API that helps advertisers measure the success of ad campaigns.

The API Involves:

  1. Ad Networks that create ad signatures and receive install-validation after ads result in conversions
  2. Source apps which display ads provided by the ad networks
  3. Advertised apps that appear in ads that have been given a signature

In order for the SKAdNetwork to work:

  1. Ad networks must register with Apple
  2. Developers must configure their apps to work with ad networks

While many platforms may be affected by these changes, Facebook’s Ad Network will face the majority of the impact through the following factors:

Event Measurement

Facebook is moving to an Aggregated Event Measurement system. Advertisers can configure 8 prioritized web conversion events per domain which Facebook will eventually focus on optimizing based on your ranking and what they believe is most relevant to your business.

Reporting Limitations

Delayed Reporting: Data may be delayed up to three days. Web conversion events will be reported based on the time the conversions occur and not the time of the associated ad impressions.

Estimated Results: Web conversion events may feature statistical modelling to account for conversions from iOS 14 users.

Attribution Windows

New ad set attribution settings can be accessed during the campaign creation. It ensures that the conversions measured are the same ones used to inform campaign optimization. Default for campaigns will be a 7-day click attribution window.

The Impact:

"4% of ‌iPhone‌ users in the U.S. have actively chosen to opt-into app tracking after updating their device to iOS 14.5"

This data is based on a sampling of 2.5 million daily mobile active users by Flurry.

What do the public think?

As iOS 14 is continuing to roll out, the general public who are getting served ads fall into the following three categories:

what do people think
Source: Content data via API & Scraping from Linkedin, reddit and Twitter from Mar. ‘21 to Jun. ‘21

How is iOS 14 affecting marketers?

Since March 2021, slowly marketers have been feeling the effects of users opting in and out of tracking. Marketers are claiming that their ad campaigns have either:

How is iOS 14 affecting marketers
Source: Content data via API & Scraping from Linkedin, reddit and Twitter from Mar. ‘21 to Jun. ‘21

Currently, marketers are facing issues with five main areas in their campaigns: 

Source: Content data via API & Scraping from Linkedin, reddit and Twitter from Mar. ‘21 to Jun. ‘21

These challenges have led marketers to build stronger and more creative tactics in their digital ad campaigns such as: 

Building & Testing Extra Creatives

Instead of hoping for certain elements of campaigns to remain the same as before iOS 14.5, marketers are testing large amounts of creatives to see what is resonating with audiences. Each iteration provides a winning example of ads that can be expanded on for further marketing.

Updating Data & Analytic Sources

Traditionally marketers would rely on Facebook’s ad reporting to see their metrics. Action is being taken to move all analytics to Google’s Data Studio. UTM parameters are playing an even larger role in digital advertising to account for this shift.

Focusing on Email-Based Solutions

Retargeting isn’t what it used to be and gathering information won’t be as effortless as before. Marketers are focusing on lead generation to put leads back into Facebook and help identify audience sets as well as to use for marketing communication purposes.

Integrating an Omnichannel Approach

If marketers had not previously considered building a holistic strategy outside of Facebook ads, many are now looking to Snapchat, TikTok and influencer strategies that don’t rely on gathering data as much as Facebook advertising.

Campaign Budget or Ad Set Budget Optimization?

CBO and ABO are being leveraged together throughout testing to see what’s working across Facebook ads. Marketers are testing new content campaigns with CBO while evergreen campaigns are set to ABO.

Android & Apple Targeted Ad Sets

(For now) Android users aren’t facing the same privacy opt-in as Apple users. To leverage this, marketers are experimenting running ad sets for each device separately to test if there are differences in acquisition and CPC.

Experimenting & Stacking Funnels

Marketers are experimenting by merging the middle and bottom funnels. This translates into a larger audience compiled of: 

  • social engagers 
  • all website visitors 
  • ‘viewed content’ visitors
  • ‘add to cart’ visitors with previous buyers removed

Keeping People on the Native App

In an effort to experiment with new landing pages and keeping users on the app for longer, marketers are leveraging the “Instant Experience”. This is a mobile optimized landing page for marketers to tell their story and editable within Ads Manager.

Source: Content data via API & Scraping from Linkedin, reddit and Twitter from Mar. ‘21 to Jun. ‘21


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