Ad Targeting Privacy Changes — What You Need To Know
Apple’s Ad Targeting Privacy Changes
iOS 14.5, released earlier this year, gives users the option to opt-out of in-app data collection. Users can decide whether to block their IDFA (Identifier for Advertisers) from apps like Facebook or Instagram. If opted in, iOS will cloak the user’s personal information from advertisers.
This is all part of a large campaign to make consumers think about privacy when they think of Apple. I’m sure you’ve seen their ad campaigns claiming, “Privacy. That’s iPhone.” Which is a far cry from Apple’s reputation over the past decade, where we saw numerous iCloud hacks, resulting in private celebrity photos leaking to the public.
Apple released this statement,
“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.”
What Does This Mean For You?
With more than 1 billion iPhone users, it’s almost guaranteed to rock the ad targeting world. It will, however, depend on how many users actually opt-out of tracking. Keep in mind, Apple has made it incredibly easy to opt-out. All users have to do is answer a quick “Yes” or “No” prompt when they open an app for the first time after the iOS 14.5 update. If you are an iPhone user who has the most recent iOS, you’ve probably seen this already.
If a lot of users opt-out (they choose NOT to share their IDFA with advertisers), which is likely, current advertising methods might become less effective.
Overall, the volume of qualified leads that come in will decrease while the volume of unqualified leads will increase.
A qualified lead is a prospect who has a high likelihood of purchasing your product/solution and is ready to take that next step to purchase. An unqualified lead is someone who doesn’t know your product, your team, and is not ready to purchase your product/solution.
Advertisers use IDFAs to track consumers’ tastes and make profiles to help them understand their consumers. When a user opts-out, you won’t be able to make a complete profile for your consumers.
Information that marketers and advertisers have taken advantage of over the past decade is slowly being erased, leaving us to create new ways to capture and interpret consumer data.
The depreciation of advertising IDs, according to AdMixer, undermines the established practices of digital advertising. It will affect:
- Audience Targeting
- Frequency Capping
- Cross-Channel Attribution
“For advertisers, existing segmentation and retention scenarios will vanish, not to mention optimization models for ROAS and LTV. Most of the client base will become unusable for remarketing mechanics.”
Mykola Kryvtsun, Programmatic Specialist
The Beef 🥩
Facebook is not thrilled with Apple’s new privacy updates and they sure aren’t shy about it (see the full-page ad in The Wall Street Journal or TV commercials). They claim, “The average small business advertiser stands to see a cut of over 60% in their sales for every dollar they spend.” If this is true, small businesses that rely on Facebook for advertising will be hit HARD.
Dipayan Ghosh, writing for Wired, claims, “But while the social media giant (Facebook) is leading us in a seemingly virtuous direction, the reality is quite different. Facebook’s contentions that this is bad for small businesses are most likely self-interested. But they are also plain wrong.” He argues that Facebook is really only looking out for numero uno (Facebook, of course) and that small businesses, comprised of the same users Apple wants to give more privacy options, would be better off with a choice about their own privacy.
View Facebook’s Full Response.
By The Numbers
According to Flurry Analytics, around 4% of daily users, from a sample of 2.5 million, in the U.S. are allowing apps access to their IDFA tag. The data suggests that people are actively opting out of IDFA tracking.
The company found only 4% of iOS 14.5 users have the “Allow Apps to Request to Track” option in settings disabled.
Interestingly, the opt-in rate is much higher for apps that displayed the tracking prompt. (Facebook example under the Flurry Analytics chart)
If the numbers look a little bleak, that’s because they are. With 96% of users deciding to keep their IDFA tags private, there are certainly going to be new challenges for digital marketers. However, there is not enough data to conclude how bad, or even if, these new ad targeting changes have hurt advertisers or small businesses yet.
What’s Next for Ad Targeting?
The most important thing you can do right now is collect first-party data and consumer research. First-party data is information collected directly from your prospects or customers. It includes data from behaviors, actions or interests demonstrated across your website(s) or app(s), data you have in your CRM, subscription data, or social data.
First-party data:
- Available to you at no cost
- Easy to collect and manage
- Little to no privacy concerns
Most importantly, you own first-party data outright. Data that cannot be affected by any changes to privacy law, user preferences, or tech monopolies beefing it out with each other.
First-party data comes straight from your audience and customers, making it the most valuable form of data collection. It’s relatively easy to collect and manage, especially if you use a data management platform, and privacy concerns are minimal because you know exactly where it came from, and as a marketer, you own it outright.
First-Party Data Solutions for Ad Targeting
Alternatives to hyper-targeted ads driven by third-party cookies:
- Content in the email newsletter
- Email-based ads
- Targeted ads on social media
- Retarget your contact list
- Google’s Privacy Sandbox
Alternatives to third-party cookie tracking:
- Use email marketing data
- Monitor social media analytics
- Use your CMS or website’s first-party data
- Contextual Targeting
Src: Hubspot
Contextual Targeting
Contextual targeting is an alternative to third-party cookies and other ad IDs like IDFA tags. It works by displaying ads on relevant web pages. You focus on the content and keywords instead of depending on third-party tracking methods.
In contrast, interest and behavioral targeting focus on patterns in an audience segment’s behavior. These types of targeting are slowly being phased out by Apple and Google. Google, like Apple, is planning to transition to a complete ban on action tracking between sites via cookies in 2022.
“Third-party cookies,” according to AdMixer, “Are small files installed on a user’s computer by a third-party tech platform when a user visits a website, for a long time were a main user identifier on the web. They helped advertisers set ad targeting and show personalized content and ads to users.”
Simple web analytics can tell you what pages your customers click on, but how do you know which page elements are getting attention? Where people are clicking on your webpage? Or even if your designs and content are actually working?
These are all very important questions that you need to answer when using contextual targeting.
But how?
Heat maps are a cost-effective and fast option.
What is a Heat Map?
A heat map is a powerful tool that visualizes data, illustrating how visitors interact with a web page. It can tell you useful analytics like where users click and, even more importantly, where they don’t click.
Heat maps provide insights that give you the data needed to implement design and layout changes to optimize your site, improve engagement, increase conversions, and enhance customer experiences.
By being able to view where customers are interacting with your pages, you are able to learn about customer behaviors for different segments.
Heat maps, combined with contextual targeting, can help digital marketers segment customers, create a more complete customer avatar, and boost conversion.
Only time will tell whether these privacy changes have a lasting, negative effect on current ad targeting methods. In the meantime, it’s incredibly important to gather as much first-party data as possible. The more first-party data you collect, the less dependent you are on tech giants and their algorithms. I don’t know about you but when it comes to my business, I do not want a billion-dollar tech company calling the shots.
It would be outlandish to say we should just do away with Facebook and Google. Obviously, we need them. However, complete dependence on Facebook and Google is not sustainable. We are seeing this play out now with Apple’s privacy changes and Google’s changes coming in 2022.
Total independence from the tech giants may not be plausible yet, but you can start today through first-party data, contextual targeting, and heat maps.
