Apple’s iOS 14.5 Update: How Advertisers Can Prepare for the Impact
Preparing for Apple’s AppTrackingTransparency Framework across Facebook, Instagram, Pinterest, LinkedIn, TikTok, and Google.
Note: Adlucent co-hosted a webinar with Facebook, that you can watch on-demand, where we discussed privacy, advertiser solutions, and what brands can do now to effectively use Facebook’s suite of tools to drive purchase decisions.
Table of Contents with Links
- What Does the iOS 14.5 Update Mean?
- Are You Prepared for the iOS14.5 Update Next Week?
- The Potential Impact of Apple’s IDFA Update in iOS 14.5
- Timeline of iOS 14.5 Impact
- iOS 14.5 and Facebook & Instagram
- Facebook’s Current Measurement Solutions for iOS 14.5
- iOS 14.5 and Pinterest
- iOS 14.5 and LinkedIn
- iOS 14.5 and TikTok
- Will the iOS 14.5 Update Impact Google Advertising as Well?
- Looking Ahead: A Privacy-First Digital Landscape
- What Advertisers Should Focus on Now
On Tuesday, 4/20, Apple announced that iOS 14.5 will be available to all iPhone users the following Monday, 4/26. While this software update has been in beta since February, its widespread availability next week will usher in a new era of targeting, measurement, and attribution for advertisers utilizing app ad placements.
iOS 14.5 is Apple’s latest software update available to both the iPhone and iPad and includes multiple new features alongside reinforced protection against app tracking. In this blog, we will focus on the latter and what this means for advertisers.
What Does the iOS 14.5 Update Mean?
All iPhone apps will be required to adopt Apple’s AppTrackingTransparency (ATT) framework. ATT requires apps to obtain user permission to track them across apps and websites. Users will be opted-out of app tracking by default. This includes app tracking from notable social apps such as Facebook, Instagram, Pinterest, LinkedIn, and TikTok.
The impact of ATT won’t be immediately understood and cannot be fully predicted. There are known variables such as the information currently released by Apple and the social network apps, and unknown variables, such as user adoption, app update timelines, upcoming privacy-first solutions to measurement and attribution, and consumer response.
Are You Prepared for the iOS14.5 Update?
First, the update itself should not come as a surprise. Apple announced last June that they planned to ask users permission in order to track and share their IDFA (Identifier for Advertisers), or the unique device ID assigned to a user in place of personal information.
Many advertisers have been preparing for the past few months. For information about exactly what advertisers need to do to prepare for iOS 14.5, particularly on Facebook, refer to our earlier blog post: The iOS14 Update: What You Need to Know.
It’s important for advertisers to understand that Apple’s ATT framework is only one aspect of the current privacy landscape, which includes privacy-first solutions from other ad networks as well as government laws and regulations. To better understand the full landscape, check out our March blog post: Understanding the Impact of Privacy on Digital Marketing.
We also recommend watching our recent privacy webinar, co-hosted with Google’s chief measurement strategist Neil Hoyne, available on-demand.
The Potential Impact of Apple’s IDFA Update in iOS 14.5
While no one knows what percentage of Apple users will opt-out of app-tracking, we are planning for a substantial percentage to take that route given the privacy landscape as a whole and the directness of Apple’s prompt.
Data released earlier this month by Apps Flyer showed that 39% of people exposed to the IDFA prompt across 550 apps opted in for tracking. The percentage of users who allowed social apps to track them was lower than the average opt-in rate at 25%.
App Flyer notes that there are preliminary findings with some caveats, however, these findings are good news for digital marketers and advertisers who have been preparing for the worst.
We do expect to see changes in audience size, action delivery, performance measurement, and reporting for advertiser campaigns. We are preparing for the most immediately observable shifts to come from performance measurement and reporting due to the nature of social attribution, namely view-through attribution.
View-through attribution uses impression tracking and gives credit to a social app for a conversion by tracking the user from ad impression to website conversion, even if the user didn’t engage with the ad beyond viewing it.
While view-through conversions are a way for social advertising to show its value as a demand gen driver, most retailers already ‘view’ them as less valuable than conversions from ad engagement (i.e. ad click). Last-click attribution is the holy grail of digital conversions, however, most offline advertising (television, out-of-home, print) arguably uses the same view-through conversion model without tracking.
The reduction of view-through attribution will be reflected in a business’s on-platform reporting; these conversions generally account for up to 70% of prospecting conversions and 50% of retargeting conversions.
Timeline of iOS 14.5 Impact
The significance of the iOS 14.5 update on digital marketing will be understood over time and largely dictated by user adoption. Previous iOS updates indicate that widespread user adoption is a few months away.
Since the impact can not yet be quantified, we do not recommend advertisers make premature decisions based on a small window of data following the update.
Each social platform is actively planning new advertiser solutions, which will include new ad types as well as privacy-first targeting and measurement tools. Stay up-to-date during this important time by following Adlucent on LinkedIn, or subscribing to our blog content.
In the meantime, we’re providing a breakdown of what we do know about the significance of the iOS 14.5 update, as well as some of the known and unknown impacts across Facebook and Instagram, Pinterest, LinkedIn, and TikTok at this time.
iOS 14.5 and Facebook & Instagram
Among the social apps, Facebook is expected to be the most heavily impacted due to the expansive nature of its advertising network across Facebook’s suite of apps.
[Important] actions prior to Monday, 4/26:
- Verify your domain
- Prepare for aggregated event measurement
Facebook has worked to prepare advertisers for the general availability of iOS 14.5 over the past few months, and we outlined the steps advertisers need to take to prepare for this update in an earlier blog post.
Below is a breakdown of changes to Facebook’s ads ecosystem advertisers should prepare for:
- Impact for all users – Known:
- 1-day click attribution will be modeled
- 28-day click-through, 7-day view-through, and 28-day view-through attribution will no longer be available
- Attribution timing will switch from time of impression to time of conversion (for context, this is how Google reports conversions)
- Breakdowns in Ads Manager, such as demographic breakdowns, will be significantly diminished
- 7-day click and 1-day view reporting will not be available
- This will likely represent one of the biggest drops in advertiser measurement and visibility
Audience sizes are expected to fluctuate, and likely decrease, due to the gradual nature of iOS 14.5 adoption and subsequent user opt-outs.
- Impact – Not Yet Known:
- Retargeted audiences are currently expected to be the most heavily impacted
- Prospecting audiences utilizing an off-platform custom audience source, including customer lists and website users, will likely be generated from a smaller set of data which could impact subsequent targeting and performance
- In-app user activity on Facebook’s suite of apps will still provide a window into user behavior
- Advertisers, along with their marketing team, may need to shift their audience strategy to reflect reduced off-app user signals
Advertisers should anticipate a drop in revenue reported in Facebook ads, and therefore should have other measurement platforms to gain a better understanding of data and performance.
- Impact – Not Yet Known:
- Reduction in attributed revenue and subsequent return on ad spend
- The impact can not be quantified at this time
Advertisers already utilizing different measurement platforms know that attribution looks different for each. While this is frustrating when attempting to understand the precise impact of ad dollars across channels, it’s important to remember that it’s standard for users to interact with multiple touchpoints leading up to a purchase decision.
Measuring Facebook performance will become more difficult even though the touchpoints remain vital to a consumer journey. This is why we recommend a more holistic measurement solution-focused on-site lift to better understand the impact of your ad dollars.
Our Lift Mentality tool was developed by in-house data scientists and expert marketers to do just that, and has helped advertisers allocate ad spend more efficiently to drive better performance. You can learn more about Lift Mentality or request a demo here.
Facebook’s Current Measurement Solutions for iOS 14.5
- SKAdNetwork is an Apple technology designed to track last-click mobile app attribution without a user’s IDFA.
- Facebook’s SKAdNetwork API allows advertisers to measure the results of iOS 14 ad campaigns and uses Apple’s conversion information to measure attribution in an aggregated way while preserving a user’s identity.
- SKAN will be used for iOS 14.5+ mobile app install campaigns attribution.
- Impact – Known:
- Web-to-app install
- Re-engagement of users who recently uninstalled the app
- View-through conversions via App Store search
- User LTV past day 1
- SKAdNetwork will limit attribution for many app conversion paths, resulting in more installs being attributed to Organic. Impacted data includes:
Aggregated Event Measurement (AEM)
- This is a protocol that limits advertisers to 8 conversion events per domain which can be used for conversion optimization.
- Advertisers determine the priority level of their 8 events.
- Impact – Known:
- Advertisers can only use 8 conversion events at any given time.
- If a user takes multiple event actions during a single conversion window, only the highest priority event will be sent to advertisers for reporting purposes.
- Changing the priority of your events will now automatically pause ad sets using affected events for 72 hours.
- Ad sets using an event outside of the selected 8 will be automatically paused
- Ad sets that have not selected a verified domain will be paused.
Facebook will begin to roll out the first of its new advertiser solutions. We anticipate Facebook will continue to introduce new tools and methodologies to assist advertisers in serving relevant ads to their users, as well as new ways of measuring and understanding attribution.
In addition to these changes, Facebook recently announced they are retiring both Facebook Analytics and Facebook Attribution this summer.
While Audience Analytics does not appear to be getting a replacement, Facebook is planning on releasing a new version of their Attribution tool. According to Facebook, the new version, “will provide comprehensive measurement of ads, organic and commerce activities across the Facebook family of apps. The new attribution tool will no longer support cross-publisher attribution.”
Looking at the Impact of iOS 14.5 Beyond Facebook’s Suite of Apps
While Facebook and Apple have been the most prominent voices in the media around this update, it’s important to remember that Apple’s ATT framework affects all apps on an updated iPhone and iPad.
The social apps below, which include Pinterest, LinkedIn, and TikTok, are anticipating less of an impact on advertiser targeting, reporting, and performance.
iOS 14.5 and Pinterest
Advertisers on Pinterest can expect a gradual decline in measurement and targeting capabilities consistent with iOS 14.5 user adoption. Because Pinterest usage favors their mobile app, we recommend advertisers take steps to understand their Pinterest performance and device breakdowns prior to Monday’s release.
Pinterest has a unique understanding of its audience based on in-app activity, which usually revolves around a user’s planning of life moments and discovering of new ideas. Pinterest’s characteristic on-platform user signals and subsequent targeting capabilities will remain valuable for advertisers in a privacy-first world.
The greatest impact to targeting will be from audience lists relying on IDFA to match contacts and retargeting audiences.
- Impact – Known:
- Audiences lists leveraging IDFA will see an immediate and gradual reduction in match rates and size.
Advertisers won’t lose the audience insights Pinterest provides, and will still be able to leverage these on-app signals to target Pinners with relevant paid Pins. Pinterest reports 93% of users say they use the platform to plan purchases, and this value is passed on to advertisers who can position their products or services in front of Pinners during this discovery phase.
While Pinterest has not been as vocal as Facebook regarding a decline in conversion measurement, we are anticipating a gradual decline in performance given that the majority of Pinner’s use the mobile app.
- Impact – Not Yet Known:
- Advertisers should expect a decline in platform-reporting conversions, however, this decline cannot be quantified based on current information.
- Pinterest does not appear to be retiring its 30-day view-through, engagement, and click-through conversion windows at this time. However, we anticipate Pinterest attribution will be forced to evolve alongside the shifting privacy landscape.
Pinterest is also in the process of rolling out new ad types, including interactive ad types, which will help advertisers better understand the effectiveness of their targeting within Pinterest’s walled garden.
In addition, the inspirational social platform is planning new first-party measurement solutions to help advertisers understand campaign effectiveness. No timeline or further details have been released at this time.
Here is the latest Pinterest business article on preparing for iOS 14.
iOS 14.5 and LinkedIn
LinkedIn does not anticipate their advertiser products to be heavily impacted by the release of iOS 14.5.
LinkedIn targeting relies largely on user and company-provided information, such as job title and company size. This makes the professional-networking platform a unique and effective solution for advertisers seeking to target users based on job-related criteria.
The greatest impact to targeting will be reflected in Matched Audiences, particularly if advertisers are relying on IDFA to match contacts and retargeting audiences.
- Impact – Known:
- Matched Audience lists leveraging IDFA will see an immediate and gradual reduction in match rates and size.
- Retargeting audiences using off-app activity will see a similar reduction. Advertisers are encouraged to leverage other behaviors for retargeting such as video views, Lead Gen Forms, Pages, or Events.
LinkedIn is not anticipating a large decline in performance tracking overall.
- Impact – Not Yet Known:
- Conversions tracked through IDFA will decline; this is not expected to be significant and requires no immediate action.
LinkedIn is encouraging advertisers to utilize their lead generation campaign and on-platform lead forms as an additional way for advertisers to capture leads and measure conversions within their walled garden.
iOS 14.5 and TikTok
The most downloaded app of 2020, TikTok shows no signs of slowing down its growth trajectory.
Advertisers currently leveraging the platform’s engaged user base are enjoying TikTok’s low CPMs as early adopters. A less desirable feature of advertising on TikTok is their attribution methodology, which is currently single-session. This means that a user’s engagement with an ad is only tracked during that single session.
Another interesting note: TikTok only made relevant ads the default for users a few days ago, 4/15.
Due to the reasons above, we anticipate less of a perceived impact for TikTok advertisers utilizing the website promotion type.
The largest known impact will be related to TikTok app promotion type campaigns. Advertisers will need to run dedicated iOS 14.5+ campaigns for many of these objectives in order to reach users running the updated software. If you’re running app promotion campaigns, we recommend reading TikTok’s latest update for more details.
Will the iOS 14.5 Update Impact Google Advertising as Well?
Google programs touching Apple devices will be impacted across channels, including Search, Display, and Video. In contrast to many Social apps, much of the advertising in Google – especially Search – sits closer to the bottom of the marketing funnel and the end of the shopping journey. Search campaigns will see the least impact, as a result.
All campaigns do benefit from delayed and view-through conversions, which have been reported based on modeled data since Apple first began rolling out ITP privacy protections in 2017. To date, Google’s public statements around measurement and optimization of existing campaigns have indicated that there will be an increase in usage of modeled data in reporting.
For more details about Google’s privacy-first solutions to targeting and measurement, check out our on-demand webinar with Google from earlier this year: Retail Advertising in a Post-Cookie World: Privacy & The Future of Measurement.
Looking Ahead: A Privacy-First Digital Landscape
The iOS 14.5 update and its impact on app advertising remain uncharted territory for both brands and users.
We do know this represents a significant step towards giving users control of how their online data is stored and used, which is important for the longevity of digital advertising. We don’t know what the impact will be on top-line revenue next week, and we might not have a clearer understanding of this for some time.
What Advertisers Should Focus on Now
- Ensure you are in full compliance with updates to privacy regulations.
- We put together a downloadable Privacy Guide, which includes an interactive checklist, to help ensure your digital marketing strategy stays compliant with regulations and proper data integrity is prioritized.
- Review your approach to measurement and your tracked conversions, considering the shorter lookback windows available going forward.
- Understand the tools and best practices available to you for each of these unique social networks, ideally through the lens of how your audience engages with each.
- Stay-up-date on new creative and measurement solutions and work with your advertising team to effectively incorporate them into your evolving social strategy.
- Keep in mind, platforms are actively developing new features designed to align with the interests and behavior of their user base, allowing advertisers to experiment with new purpose-built touchpoints.
Each of these social apps provides a different opportunity for advertisers to engage with consumers. For the foreseeable future, social platforms will continue to boast robust user bases and therefore remain an important aspect of the consumer journey.
Adlucent will be providing updates as this story develops, and sharing our insights on the impact of iOS 14.5 based on our proprietary data findings. For those updates and more, subscribe to this blog or follow us on LinkedIn.
If you’re a brand or retailer that needs support driving measurable performance through social advertising, our expert team at Adlucent is here to help. Contact us today and learn more about how our management services achieve success and reach your digital marketing goals. And if you want to gain more insight into tactics and trends that can help improve the performance of your social strategy in 2021, download our Shifting Social Strategy in 2021 white paper!
March 28, 2023
Three Tactics to Optimize Paid Search for Lead Generation
In our latest blog post, learn how to optimize your paid search for lead generation with these three tactics. Discover how to improve Quality Scores, use ad extensions, and utilize smart bidding tactics to generate high-quality leads. Read now!
March 21, 2023
Google PMax Videos Are Required by Q2 2023
Starting March 31, 2023, Google Performance Max campaign groups without uploaded video assets will auto-generate videos. Brands should plan for the transition and maintain control over their video assets by uploading their own creatives.
March 14, 2023
The Last Gift | Customer Chronicles
Finding the right gift for a loved one can be stressful, especially when on a tight budget. Our latest blog post tells the story of a relatable customer and their journey to finding the perfect gift. Discover the marketing insights that can be learned from their experience and how you can better understand your target audience.