Editor’s note: I have since written a follow up to this article outlining things ecommerce business should do to prepare for the coming iOS 14 changes. Read part 2 of the series here.
Apple’s new data sharing consent policy delivers a massive blow to app-based businesses, but if you run a web-based ecommerce store, plan to evolve your current digital marketing strategy in 2021 and beyond.
The writing has been on the wall for at least the last year. The next major evolution in digital marketing looks to be the near total upheaval of the current ultra-sophisticated, ultra-effective data tracking technologies that ecommerce businesses of all sizes have come to leverage over the last five or six years to power tremendous growth (and tremendous profits for big tech). If you look at the broader landscape of privacy legislation, big tech antitrust hearings, and improved privacy initiatives across hardware and software alike, we’re probably looking at a watershed moment in our digital lives over the next three to five years. That watershed moment will be a return (in my guess, a temporary one) to slightly more private lives online.
Ultimately user sentiment that triggered legislative actions like GDPR & CCPA kicked off this moment. Blanket privacy-oriented updates to website cookie management across the Firefox and Safari browsers were the next chips to fall—and went somewhat under the radar. Now it looks like the changes to app privacy & consent functionality within Apple’s iOS 14 may be the first privacy-oriented functionality update with effects that are likely to noticeably trickle down to just about every digital advertiser.
The big losers this time around with the iOS 14 privacy update will most certainly be app-based business, think mobile gaming, mobile publishers, and mobile-based 3rd-party display networks. But, and I cannot stress this enough, every single entity that does any kind of digital advertising is likely to be noticeably affected by this change. That includes the folks most near and dear to my heart, ecommerce businesses, and small-to-mid sized ecommerce businesses with owned ecommerce channels.
What are the changes to iOS 14 privacy & consent I should be aware of as a web-based ecommerce business?
Beginning sometime in early 2021, Apple will implement a new privacy and consent workflow for every mobile app currently served from the App Store or downloaded on an Apple mobile device including iPhones, iPads, and Apple TVs.
The first change is smaller, has less direct implications on web-based ecommerce businesses, and ultimately is probably good for the greater digital universe. This change is a new privacy “nutrition label” that will be required of every mobile app and will be “mandatory” reading for the user when they choose to download an app (and I assume keep using previously downloaded apps). It’ll be an easier-to-read terms of service or privacy policy page with pretty icons and plain english. I think we can all agree this is for the better.
The bigger change that will affect web-based ecommerce businesses will be what I’m calling the “master data sharing lightswitch.” When users download a new app (and again I assume a similar experience with existing apps), they will basically be asked “do you want to allow insert app name to track you and share your data with 3rd parties.”
If you press “yes” that app can continue to track and share your usage information to almost anyone they please, Facebook, Google, Russia, etc. If you press “no”, then that app can only track your app usage for internal purposes like in-app functionality or improvements. Some early projections expect that somewhere between 75% and 90% of users will flip the switch and opt out of this data sharing program.
As a web-based ecommerce business you’re probably asking yourself but why should I care? If so, read on.
How will the iOS 14 privacy update affect my web-based ecommerce business?
Once this change goes into effect, all major digital advertising platforms could lose visibility on most daily activities across up to 90% of iPhone users (and iPad and Apple TV of course) almost overnight. This will result in a massive loss in a dataset that powers the ridiculously powerful algorithms behind big tech’s hyper effective ad platforms. Though your business isn’t exactly losing data, your business is losing access to a huge trove of data you’ve been mining (most likely profitably) for customers by using these ad platforms.
The bigger change that will affect web-based ecommerce businesses will be what I’m calling the ‘master data sharing lightswitch.’ When users download a new app (and again I assume a similar experience with existing apps), they will basically be asked ‘do you want to allow insert app name to track you and share your data with 3rd parties.’
Right now a not-insignificant tranche of the digital advertising infrastructure is built on these massive tech companies tracking literally everything you do when you actively spend 4 hours a day on your phone, plus the bonus 24/7 location, movement, sleep data from apps with background tracking. This data is far richer than the data they collect as you browse the web on your computer.
The big digital ad platforms know which users spend exactly 17.34564 minutes a day playing Angry Birds which is the optimized time for a mobile gamer interested in new games. They know which users are obsessively researching golf clubs but haven’t yet purchased thanks to Chrome app browser history and a lack of a purchase conversion at a golf-related ecommerce store. They know users that love skiing because they check the OpenSnow app daily, follow their annual vert on the Epic Pass app, and are regularly tracked driving to Vail and back through their car insurance company’s safe driver app.
After this update to iOS 14, the ability for big tech to peer into the entire 24/7 life of iPhone users, and for advertisers to leverage this ridiculous trove of data when targeting, could drop to damn near zero.
If your first reaction to this is “but Kevin, it’s only iPhones. It’s only mobile.” Then I’d ask you what’s the primary demographic of your customer? If it’s a grey hair running a concrete business with a flip phone who likes to share political memes on the Facebooks with his new laptop…well you’re probably ok. But if you audience is younger, more affluent residents of an industrialized nation with free time and money (i.e. the primary iPhone demo), you’re likely going to lose access to a significant chunk of digital ad targeting data, and you’re likely going to see at least some measurable decrease in ad performance over the next 12 months and beyond.
Ok, but how bad is this iOS 14 update if my ecommerce business uses digital advertising and likely has a lot of customers with iPhones?
As of December 2020, the short answer is, I don’t think anyone really knows. I fully expect ad performance across all of our clients to see a measurable decrease. I’m also pretty sure those effects will be somewhat immediately felt once this change goes into effect. I’m not at all confident in the scale of that decline and whether it will be a short- or long-term effect. Though in this last instance, I’m betting on the latter.
FWIW, Facebook seems to be extremely concerned. Every Facebook ad manager account got pinged with a thorough notification/warning and their documentation on this change is extensive. They also took out a hell of a full-page newspaper ad in the NY Times, Wall Street Journal, and WaPo (isn’t that ironic, print advertising) extolling the financial tragedy that will beset Facebook’s loyal advertisers, ruin the internet experience, and crush American small business as their digital advertising becomes “60% less effective”.
Meanwhile at Google, the response has been “Meh” as they work laboriously on their own plans of world domination.
I suppose it makes sense. Facebook is incredibly leveraged in mobile as the Facebook mobile application & Instagram drive a lion’s share of traffic from platform ads. And speculating a little here, I also think Facebook’s algorithm has become incredibly powerful over the last 2-3 years as their ability to process and use data (especially mobile data) has improved with increased processing power and broad adoption of the Facebook pixel across the web and in mobile applications.
Google on the other hand holds so much power in Google Chrome browser and app and their user’s search history. While they know iOS 14 will hurt a little, they’ve got significantly more digital-landscape-altering plans in store with looming 2022 privacy updates to the Google Chrome browser, which hopefully I’ll find more time to write about later.
My concern-level is like Mild Plus to Medium spice on the US Thai Cafe heat chart (IYKYK). My biggest concern is that I expect a decent hit to one of my favorite advertising features, lookalike audiences. Lookalikes are such an easy and useful feature for so many types of advertisers, and small- and medium-sized ecommerce businesses especially.
I also think the broader marketing world is fairly concerned about the implications of dynamic catalog retargeting. Extremely sophisticated advertisers should certainly be concerned that tracking things like ad display frequency across devices and environments pretty much goes out the door when an iPhone user is involved.
If I’m reading the tea leaves a little here, I actually think Facebook is trying to wean marketers off some of their legacy structures and begin to tamp down expectations as more privacy regulations are inevitably put in place.
Additionally, though this change affects app-based businesses more than anything else. Facebook seems to be rolling out some interesting new global changes to their ad platform, While Google has stayed low key.
Starting in 2021 in response to iOS 14, Facebook will be limiting advertisers to 8 total pixel events, which could seriously hamper things like custom conversions. Facebook will be switching to aggregated event metrics, which should alter everyone’s ad strategy and optimization in a pretty meaningful way. And finally, Facebook is defaulting to a 7-day conversion window with all advertising. Gone will be the days of 28-day view and 28-day click conversion windows and inflated metrics.
This last one is really interesting to me as the 1-day view and 28-day click conversion window has been such an industry standard for so long. It’s not the end of the world for the average ecommerce business. I’d actually argue this is a great change if you’re selling $0 – $500 widgets as it will give you a far more accurate picture of advertising’s direct effect on sales. But it will hamstring any company that sells a high-dollar item that takes longer than 7 days to encourage a purchase. I guess these folks will really have to up their retargeting game.
Some of these changes don’t feel like they are even necessary given what is actually happening with iOS 14. If I’m reading the tea leaves a little here, I actually think Facebook is trying to wean marketers off some of their legacy structures and begin to tamp down expectations as more privacy regulations are inevitably put in place. They’re purposefully trying to start to deflate the data, a topic I’ll try and save for another time…
In Conclusion, at least until I can find another 4 hours to write a blog post…
I do think this change will hurt a lot of digital ecommerce brands and digital ad agencies, including Craft 52. It will probably make starting something from scratch even harder than it already is. It also opens up opportunities for new thinking and new ideas in the digital traffic driving universe. Future entrepreneurs of America, take note.
And in real terms, this is only the beginning of the era of privacy initiatives. Consumers and the market want more privacy, and through a mix of legislative action, and market forces, I fully expect we’ll see more privacy on the internet (at least for a period). With additional privacy comes less powerful targeting with programmatic digital ad buying. With less powerful targeting, you’re gonna have to be a better digital marketer. It’s a cycle that tends to relentlessly repeat itself in this industry. Remember those simpler times when organic social actually did something before they changed the algorithms on us :).
I’m a digital marketer or own an ecommerce business, what do I need to do now with the iOS 14 date approaching?
I wanted to write way more about the below, but I figured I better stop this thing at 2000 words. I will make an honest effort to expand on these where relevant.
- Verify your domain with Facebook. This is a new feature within Facebook that I wasn’t even aware of till I started reading up on this topic. Gonna be important with these changes.
- Review your conversion events, both standard and custom, if you have more than 8 currently running, be ready to nuke some in early 2021.
- Get to know Facebook’s new Aggregated Events Measurement. I’ll try to write a bit more about this later. This could have major implications with ad strategy.
- Rerun your 2020 Facebook ads data with a 7-day conversion window, and use that for 2021 planning. Might as well rip the bandaid off now.
- Review Facebook’s documentation. Keep an eye out for updates, blog posts, tutorials, documentation from Google or any other 3rd party digital programmatic ad platforms you might use. Not sure what’s all out there, haven’t had time to fully dive in.
- Consider deleveraging a bit from programmatic ad platforms. If you’re a small- or medium-sized ecommerce business that isn’t looking into your full digital marketing mix across all channels, it’s time to start doing something about it. At Craft 52, we’ve always been lukewarm about FB & Google ads. We won’t argue their effectiveness but chalk them up to a necessary evils more than anything. We’re super pumped about owned-marketing like email & automation, organic search, and messaging, or any other cool, creative digital traffic-driving or relationship-building opportunity. Contact us if you want to have a conversation about any of the above.
- Hope for the best. Prepare for the worst. Sit tight, wait for the data to come in, and always expect there to be more digital marketing pain a’comin’. (hint: there is.) Don’t forget it’s just digital marketing. We ain’t curing cancer here. Solutions will present themselves.
Final Thoughts
I do hope to continue to write some long form on digital marketing topics that interest me. Especially when the topic inherently force me to do some important research because I know it will help my clients. If this was at all helpful, by all means drop us a line. I’ll put you on a list for the email distributions of this content as it comes out, infrequent though it may be.
Also typos, message me with typos. Took way too long to write this. So my editing was surface-level at best.
And cause this thing was so many damn words, I give you the reality we’ve all lived with for the last 10 years.
Cheers
