In April 2021 Apple came out with an update that introduced ATT or App Tracking Transparency. The purpose of which was to return some control back to iPhone users, and give people a choice, to allow or not allow apps to track your activity across other companies’ websites. Apple’s company line is that they are doing this to improve privacy of the iPhone users and give them greater control over what apps were using to market products or services to them.
Built into the Apple operating system was a tracker called IDFA, (Identifier for Advertisers) which tracks your activity between applications. As more companies accessed that data, it became concerning to many about the access the apps had to this personal data.
As consumers became tired of seeing pop up Privacy Agreements at the bottom of the screens, forcing them to accept that the app used cookies to optimize your experience, Apple felt it should be at least a choice for the user and not a decision dictated to them. The ATT was initiated and delivered a choice to either let the App Track user’s activity or ask it not to track their activity. They even went as far as allowing users to go into the privacy settings and opt-out of tracking. This was good news for users, but bad news for advertisers trying to target their ads.
One example of the impact of this change was demonstrated when one store had been spending $27 in advertising on Facebook for every new customer they acquired. Since the elimination of activity tracking, they will be forced to spend $270 for every new customer added. What provides protections for consumers, drives the costs up for businesses to properly reach and add the same types of consumers, they reach before the change.
Apples new approach of ATT is important, when one considers the end to third party cookies in Chrome starts in January 2022. These actions on top of the governmental privacy regulations such as GDPR & CCPA, and as of November 2021 layered with Facebooks changes in ad targeting, will make for a more challenging ask of advertisers and agencies attempting to reach the correct potential consumers.
As part of the rebrand of Facebook with “Meta” the company is removing targeting options like health, race, ethnicity, political affiliations, religious or sexual orientation beginning January 19th, 2022. It will take effect on all three platforms they control, Facebook, Instagram, and Messenger. In 2018, it removed 5,000 ad-targeting classifications to keep advertisers from excluding certain users. This effort to prevent discrimination, prevent ad targeting abuse and attempt to improve privacy has substantially restricted legitimate ad targeting methods. While the reasons behind the changes may be admirable, this leaves Digital and Mobile advertisers scrambling to find new ways to segment their ad delivery and provide the right ads for the right products and services reaching the right people.
So How Will Advertisers and Agencies Find the Right Path to Potential Consumers?
Apple’s introduction of ATT will make ads substantially less relevant for consumers, except ads delivered through Apple’s own personalized ad system. Apple Search Ads has displaced Facebook as the best ad network for mobile marketers on iPhone and iPad. Apple is introducing a measurement solution called SKAdNetwork (SKAN), which makes performance data available at the campaign level. SKAN is considered “differential privacy” which is the approach of using statistical methods for marketing measurement which make it impossible to infer and individual user’s behavior.
What can Advertisers and Agencies Do to Persevere Through These Challenges?
- Deepen your understanding of your audience. Products that suffer most due to these identifier-based targeting methods are those with niche products. By building a broader appeal for your product or service, the more people that will be receptive to it and less targeted you must be in your ad segmentation.
- Get more creative. The focus to develop new, engaging, and attractive ads can help minimize efficiency loss due to removal of the identifiers. As your ads reach the most important members of your audience, your products will break through the generic and non-descript advertising from competitors.
- Increase Opt-In retargeting. Not all digital ads reach the right potential consumers, but by utilizing the reduced targeting categories of FB, Instagram or Messenger for your initial digital ad campaigns, while increasing the frequency of retargeting to those that have engaged or opted in with emails, you have limited your ad waste, and increased your chances of success since retargeting can lift ad engagement rates up to 400%. The average click-through rate (CTR) for display ads is 0.07%, while the average CTR for retargeted ads is about 0.7%. Those that engage with your re-targeted ads have a far greater likelihood of becoming future customers.
It’s imperative that every agency and company who uses digital ads understands the changes coming and the ways to succeed despite the changes.