Editor’s Note: This blog post is Part 2 in a two-part series discussing how the 2021 iOS 14 Privacy updates will affect ecommerce businesses. For more information about the changes coming to iOS 14, i recommend you read part 1.
In early 2021, Apple will officially launch the long-announced, moderately delayed updates to the iOS 14 operating system. These changes will introduce strict, first-of-their-kind privacy restrictions on all apps sold on the App Store and running on an iOS device. As we previously discussed in Part 1 of this series, this change will be, in our opinion, the first major change in the personal digital privacy environment that will be broadly felt by every business, including ecommerce businesses, leveraging digital advertising on the current market-leading platforms like Facebook, Google, and others.
Once this change goes live, 100 million Americans, or roughly 45% of all US smartphone users will be asked in plain English if they would like the apps installed on their devices to share their usage data with 3rd-parties. Current estimates show an opt-out rate somewhere in the 80-95% range for these 100 million users. As we discussed, this is an absolutely massive dataset that will disappear, and it will kneecap the algorithms currently powering the major digital advertising platforms. As the algorithms get less effective, you can expect that your ecommerce business will see meaningful declines to your digital ad performance in 2021. So the question becomes, what can you do about it?
8 Steps You Should Consider As An Ecommerce Business On The Eve Of iOS 14 Privacy Changes
Step 1: Don’t Panic.
We are 100% confident that your digital ad performance across the major platforms will take a hit next year. The iOS 14 changes are projected to affect several of our favorite features for ecommerce businesses like lookalike audiences and dynamic ad content. If you use more sophisticated features tracking ads across devices and platforms, then you’ll likely start to lose visibility on ad delivery frequency metrics. But until the iOS 14 changes are implemented, no one will really know the true impact.
However, these platforms are still some of the most sophisticated traffic- and sales-driving tools ever developed. Additionally, while Facebook has really jumped out ahead of this change with significant platform changes and documentation, it seems as Google is taking a “business as usual” approach. Perhaps Google feels that this change won’t affect their platform as drastically.
Despite these changes, we expect these platforms will continue to drive quality traffic to your ecommerce store even after these changes. The challenge will be adapting to the new environment quickly, and having strong marketing initiatives in other channels (see step 6).
Step 2: Verify your domain with Facebook.
As part of the iOS 14 rollout, Facebook is implementing a domain verification system. It’s pretty easy. And if you’ve ever verified your domain with Google, like when setting up Google Search Console, then this step should be cake. Upload a TXT record to your domain DNS, and you’re good to go.
One important caveat here is that the domain needs to be verified on the primary business manager account of the business. It can’t be implemented through an agency partner’s account.
Step 3: Review Your Facebook Conversion Events
Facebook is taking some pretty drastic steps with the iOS 14 rollout. Some of these steps don’t even feel related to the new iPhone privacy updates, but rather seem like foreshadowing of future privacy restrictions to come. One such change is the new limit on total trackable conversion events within the facebook ad platform. In 2020, Facebook offered 17 standard conversion events including things like, “View Content”, “Subscribe”, “Add to Wishlist”, “Purchase”. Then a savvy developer could implement a near unlimited amount of custom conversion events. Each event, whether standard or custom, could be the targeted and optimized conversion action of your advertising.
Now in 2021, Facebook will limit each verified domain to a total of eight (8) trackable conversion events across standard or custom conversions. If you have implemented more than eight conversion events on your website, and if your Facebook advertising targets more than 8 events, you will need to be prepared to simplify your data collection and ad strategy around only 8 events.
Before you say, “My Facebook advertising strategy is pretty simple, this shouldn’t affect my ecommerce business,” know that the Shopify -> Facebook integration sets up 6 conversion events automatically. Throw in a “Lead” conversion (which you should have if you collect email addresses anywhere on your website), or maybe a “Find Location” conversion for your brick & Mortar stores and it’s pretty easy to see how an ecommerce business can quickly bump against the eight total conversion events now allowed for Facebook Advertising.
As of right now it’s not exactly clear if Facebook will require advertisers to uninstall any conversion events they don’t want to use or if there will be an easy tool that will help people select the eight events of the currently installed events they will use going forward. But most of the documentation indicates that there will be a clear and obvious decision point when all verified domains will need to “choose” their preferred conversions.
Step 4: Familiarize Yourself With Facebook’s New Aggregated Events Measurement
This is a biggie. The official documentation on aggregated events measurement is a bit thin right now so here’s a breakdown as we understand it. In 2021, Facebook plans to only report the deepest conversion event a user triggers in a session under the assumption that the user triggered all the conversion events underneath it.
Here’s an example for an ecommerce business.
A user clicks a Facebook ad directing them to your Shopify ecommerce website. While on the site that user views a product triggering a “ViewContent” event. While shopping, the user receives a newsletter signup incentive popup, signs up, and triggers a “Lead” event. Then, that user adds a product to their cart triggering an “Add To Cart” event, followed by an “InitiateCheckout” event, then an “AddPaymentInfo”, and finally a “Purchase” event.
When reviewing the data in ads manager for the Facebook ad that drove this user experience, only a “Purchase” conversion will show in the report. Facebook will no longer report on any of the other metrics within their reporting.
Wanna know how to see your ad purchase performance & ROAS fall off a 10-20% cliff almost immediately? Try a tighter attribution window. Good, bad, or indifferent, the industry standard attribution window has been at 1-day view, 28-day click (30-day click for Google ads) for years. Facebook will be changing to a universal 1-day view, 7-day click window in 2021.
On one hand this makes sense as a purchase obviously added to cart and initiated checkout, but, I’ll be frank, this change, if we are interpreting the documentation correctly, sucks. Sure, when advertising for ecommerce, we’re targeting purchase events more often than not, but tracking things like lead acquisition resulting from our purchase-optimized ads is a massive value-add to advertising on the Facebook platform.
While not as concrete as a purchase, a captured email has a quantifiable value. Combining the purchase value and the lead values deliver an even more accurate assessment of an ad’s performance. Based on some of the early documentation on these iOS 14 changes, this kind of visibility across metrics may be gone for good.
Here’s another hypothetical that I’ve yet to fully answer. What happens if you target a lesser conversion action, say “add to cart” or “view content”? This is something you might do for a Top Funnel audience to get a lower cost per click and drive more website visits with your ads. Will Facebook count and report any purchase events that happen as a result of these ads or will they only report on the selected conversion? It’s very unclear.
This would be a significant issue for ecommerce advertisers. Though you don’t always target the purchase event with advertising, you always want complete visibility across all ads on the purchases you influence and your ad strategy’s total return on ad spend. This has potential to really upset your brand’s proven strategies, especially if you really rely on purchase conversion and ROAS metrics.
Step 5: Rerun your 2020 Advertising Data & Change Your Attribution Windows
Wanna know how to see your ad purchase performance and ROAS fall off a 10-20% cliff almost immediately? Try a tighter attribution window. Good, bad, or indifferent, the industry standard attribution window has been at 1-day view, 28-day click (30-day click for Google ads) for years.
This window is the default setting, and the setting we’ve grown accustomed to measuring our ads against. Is it the right window? Arguable. Giving credit for ads that a user clicked almost a month prior has always felt like a stretch. But hey, that’s been industry standard.
Well that’s all changing in 2021. Facebook will be moving to a universal 1-day view, 7-day click attribution window. This is a major change in the platform. We’ve run the numbers, the overall sales/ROAS performance difference when comparing the new 1-day view, 7-day click vs the traditional 1-day view, 28-day click is between 10-20%.
What’s worse, businesses with high-dollar products or long customer nurturing cycles will likely need to completely reinvent some of their ad strategy as they lose visibility on social advertising’s ability to drive sales for any ad delivered more than 7 days prior to the sale. If you don’t have a funnel-based advertising approach, or solid lead capture on your website, it’s probably time to get your hands dirty.
Because all businesses will start 2021 at this 10-20% disadvantage, we recommend that you rip the bandaid off now. Facebook easily allows you to adjust your attribution window. When you do, all historical data in your Ads Manager will update to the new window. Then reassess your 2020 advertising numbers and build any 2021 modeling and forecasts from the new numbers. It’s the only way your year-over-year growth/advertising metrics will have any relevance.
Step 6: Plan to deleverage from digital advertising platforms in 2021.
I won’t lie to you, we use digital advertising on the major platforms to drive traffic and sales across almost every one of our client accounts. However, these ad initiatives are always part of a larger more holistic audience and customer development strategy.
Our end goal is to help our client’s to better leverage the data they collect through their ecommerce stores. Then use that data to develop more ownable traffic driving channels. As those ownable channels grow, the overall need for digital advertising decreases. In our opinion healthy digital businesses are built on engaged audiences and an actionable customer base, not high-volumes of empty traffic from advertising.
Right now we’re extremely high on email marketing and automation, great digital customer experiences, and an SEO strategy that integrates with the larger brand story our clients are telling through more traditional marketing channels. We also see some new channels on the horizon that project to become major revenue drivers as customers continue to develop deep relationships with the companies they trust. Give us a call if you have any questions.
Digital advertising with the major platforms will certainly be part of the mix in 2021, but it can’t be the only tool in the toolbag this year, or any year going forward. This is a great year to invest in new channels, and explore new partnerships.
Step 7: Build Trust With Your Audience and Customers
The digital customer will not tolerate empty marketing, empty functionality, or empty relationships much longer. As the broader digital ecosystem gets noisier, more confusing, and more negative, value-add experiences online will only stand out more prominently to a user. Brands that can identify and capture an audience and immediately deliver value-added experiences, then continue to deliver those experiences will win the day.
One side effect of increased privacy online will be the loss of personalization. As users opt-out of data tracking, the content, the advertising, and their overall digital experience will be less and less tailored to them. Internet users will be forced to paddle out of their comfortable little internet eddy into the main channel of the river, navigating all the turbulence that comes with it. My bet is they’ll row like hell when they spot something familiar on the shore.
I always think about the email newsletter as an example of this trend. While we’re all inundated with emails, we each have a handful that we click and read with at least some kind of regularity, because over-time, we’ve grown to trust that within that email will be something of value. That level of trust is irreplaceable for digital marketers and it can be built and nurtured just about anywhere in your brand’s digital footprint—social, blog content, purchase experience, etc.
Any small change you can do this year that cuts any fluff or improves a user’s experience with your business will be a win. A couple examples: Put an extra 10% of thought into organic social posts, improve the quality of your product photography, develop a more intuitive size chart, speed up the time it takes for customer service inquiries or fulfillment turnaround times, or just send better marketing emails.
Trust in your brand, in your product, and in your digital experience will never be affected by a new privacy initiative or algorithm change. And trust us, there are many more on the way.
Step 8: Revisit Step 1
This iOS 14 change is only the latest and certainly not the last challenge digital marketers will face as the platforms, strategies, regulations, and demand within a medium as fluid as the web evolves. The only real proven strategy over the last few years has been to try and do things mostly right, most of the time. But the tactics behind that strategy are constantly changing.
Wishing you the best of luck in 2021,
Kevin.