How the iOS14 Update Will Change The Way We Run Digital Ads

     Apple’s iOS 14 update is set to change paid advertising as we know it, and Facebook is not happy about it. The update is the latest move to cause friction between the tech giants. Although we won’t know the entire effects of the update until it is rolled out, it's clear it will change the advertising landscape on Facebook for businesses. User data allows businesses to target and segment potential customers effectively. Without that data, advertisers will be forced to come up with other strategies to make sure their ads are being placed in front of the right people. 

The Update

   The iOS update will now require apps to ask for permission from users to use their data for advertising purposes. It’s important to note that Apple is holding the cards on how this will be displayed to iPhone users. Facebook has described this as a “discouraging prompt”. Apple has already added a section at the bottom of App pages in the App Store showing data “linked to you” and data “not linked to you”. Without diving into the sea of information on privacy issues, the majority of users are likely to decline Facebook and others’ invitation to share their data. This damage to paid Facebook ads is intensified by the fact that 80% of Facebook users are mobile only.

Personalized Ads

     Producing relevant ads for each user creates the best opportunity for businesses to convert ad spend into sales. Personalized ads help businesses reach people who have already shown interest in their product. They also help to find audiences similar to existing customers. Facebook has launched campaigns online and in major US newspapers in an attempt to educate the general public on how they can expect this update to affect their online experience. For businesses owners, Facebook released an example of the effect this could have on a local bookstore. “Currently a local book store could spend $50 on a relevant and personalized ad and may win 5 sales. Without the use of their own data to personalize an ad, that business would spend $50 and may win only 2 sales.” A study from Deloitte found that 44% of small businesses have turned to personalized ads to adapt to the Covid-19 pandemic. Apple’s iOS update will make it more difficult for businesses to reach customers as well as measure campaign effectiveness.

Apple Defends Upcoming Privacy Changes

     Apple has responded to Facebook’s critiques of its upcoming privacy changes by saying that is “standing up for our users,” in a statement shared with The Verge. In their full statement they said:

     “We believe that this is a simple matter of standing up for our users. Users should know when their data is being collected and shared across other apps and websites — and they should have the choice to allow that or not. App Tracking Transparency in iOS 14 does not require Facebook to change its approach to tracking users and creating targeted advertising, it simply requires they give users a choice.”

     iOS makes just 25 % of the total global mobile market. The remaining is dominated by Android but the iOS operating system is more valuable as iPhone users are often from a higher economic class. Businesses and marketers should continue to follow along with updates from both sides as the story continues to develop. Awareness and preparation are key to making sure the effects of this update are minimal on small businesses. Prepare with alternative strategies of advertising and data collection, and stay up to date by following Ppl Media Inc. on all of our channels @connectwithppl.