When Apple announced the iOS 14 update included a new App Tracking Transparency (ATT) policy, a shiver went down the spine of every paid digital media specialist on the planet. The update will require iPhone users (as well as other Apple devices) to opt-into third-party ad tracking at the app level.
Them’s fighting words, Apple.
Because that’s how a lot of marketers prove their ROI. But should digital marketing be so dependent on tracking people without their permission?
The ad tracking we’re referring to relies on Identifier for Advertisers (IDFAs) — one of the only ways to target and track users within apps on iOS devices. They’re kind of like cookies, only for devices, not browsers. These unique identifiers are also what allow advertisers to personalize retargeted ads to consumers.
But Apple is only one piece of the mobile device industry pie, right? Eh, yeah, but it’s a pretty big piece.
Apple is running the show
Apple’s iOS operating system has a share of 50 percent of the mobile operating systems market in the United States. And right now, by not opting out, around 70 percent of iOS users automatically opt-into sharing this IDFA data. After the update, that number is estimated to drop to between 10 and 15 percent. Yikes.
That means brands that rely heavily on paid, targeted ads designed to generate sales and leads will be reaching around 60 percent fewer consumers on Apple devices. And when Apple does something, the rest of the crowd usually isn’t far behind. Our prediction is Android will be next to implement similar tracking updates.
But here’s the light at the end of the tunnel and the main reason we believe this change is positive for digital marketing as a whole: Giving consumers the option of privacy actually identifies real leads. Rather than being strong-armed (or manipulated) into what’s easiest for marketers, consumers will be expressing an openness to ads if they opt-in and being very clear about their disinterest if they opt-out. That feels like a good thing. Here are three reasons why we think so.
1. Consumer behavior around privacy has changed
This wave of privacy change has been a long time coming. Third-party data should not have been so easily accessible to marketers in the first place, and the entire world is making changes to the laws around data-sharing as we speak. Apple’s privacy update is a positive change to the state of digital marketing because it’s an opportunity to improve the caliber of our advertising methods and stop relying so much on (expensive) retargeting.
In a 2019 study by Cisco, 32 percent of respondents said they care about privacy, and took action — they actually switched companies or providers over policies around data-sharing. Pre-iOS 14, while you might have been able to get every app user's information without having to ask, in reality, not all of those people wanted to be on your list.
Knowing what consumers want is half the battle for marketers. The iOS 14 update will eliminate the group of people who don’t want to be sold to and actually provide you with a list of people you CAN target that are perfectly fine with that. And those, my friends, are real leads with intent.
2. What you hate as a consumer, you should avoid as a marketer
While I’m a digital content marketer, I’m also a consumer, and I can honestly say pop-ups and banner ads are the bane of my online existence. And these days, I’m not sure I exist anywhere else…
These ads may be 100 percent relevant to my search intent. And they might even be perfectly written and executed. But I don’t care. I cannot find that X at the top right corner fast enough. Retargeting is an expensive way to bother me. However, I will absolutely engage with brands and their content if it’s worth my time and answers my questions.
I’m not alone in my aversion to being advertised to when I’m trying to read or watch something online.
I caught up with Faris Yakob, co-founder of Genius Steals and author of Paid Attention: Innovative Advertising for a Digital World to get his take on the privacy shift happening in digital marketing. He’s also the former Executive Vice President, Chief Technology Strategist at the world’s largest advertising agency, McCann Erickson. No big deal. Here’s what he had to say:
“Retargeting is basically a direct response spamming mechanic. Consumers are more annoyed by retargeting than they are by privacy incursions because they don’t actually understand retargeting.”
He went on to explain:
“As consumers, when we accept these privacy terms and conditions, we take on some of the guilt. That said, retargeting is actively annoying to people. The more retargeting spikes, the more ad-blocking goes up.”
Faris has written on the topic of paid media quite a bit, including a piece back in 2016 entitled, Personalized Advertising is an Oxymoron. It seems this trend towards a “freedom of choice” about the ads we’re served has been a long time coming.
Many of us (the digital marketers) need to stop advertising for a second and listen. If people opt-out of being tracked when iOS 14 comes out, doesn’t that mean they probably weren’t going to engage with ads following them around like a stalker all over the internet?
I think of retargeting ads as the modern-day car salesman. And I only buy cars at Carvana for that exact reason. I’ll do anything to avoid being hounded into buying something I don’t want. The only difference is, online targeting is less awkward and easier to get out of. Especially once iOS 14 comes out. Which leads us to our next point: Online shopping has taken over.
3. Online shopping has taken over
Even before the pandemic happened, consumers were shopping online more. In 2018, e-commerce increased 14.3 percent, and then 15.8 percent in 2019.
2020 left consumers with basically no other option than to shop online. Everyone got out their phones and started scrolling. Walmart’s online sales grew 74 percent in Q3 of 2020, positioning them as an actual competitor to Amazon, whose sales accounted for nearly a third of all e-commerce in the United States. And those are just the big players. Consumer spend with e-tailers was up 44 percent YOY in 2020.
It’s no surprise advertisers were frantically screaming at consumers on every platform and digital ad space available. For a few brands, some of those retargeting attempts actually worked. For others, the cost was too high.
Here’s a quick example. The search network on AdWords has a much higher intent-to-purchase than display remarketing ads, and the average conversion rate is 2.7 percent. The average cost per click in AdWords across all industries is $2.69 for search and $0.63 for display. Jeez. And those clicks don’t even necessarily translate into sales.
Depending on the industry, many of these expensive ads aren’t all that effective. And they could be cheapening your brand image online at a time when a brand story and differentiation and experience means more than ever. Online markets across the board are being oversaturated, and it’s getting harder and harder to stand out.
Faris Yakob also has opinions on this topic. In a recent WARC piece he says, “Since we are cognitive misers and easily get decision fatigue, we are easy targets for a Facebook notification. We tend to consume the easiest, least-satisfying media the most and correspondingly advertising money concentrates there.”
The research is telling us that social media, like a poor diet, is actually making us feel bad. So, if brands rely heavily on media placements on mediums like Facebook, what does that do to how your consumers view you long-term? Healthy food for thought.
You can pivot
If we know that consumers are shopping online and tracking them with ads is 1) expensive and 2) not as possible post-iOS 14, maybe the play is staring you in the face:
- Grow organic content
- Build your brand story
- Utilize first-party data
- Optimize your digital storefronts and marketplaces
Reallocating marketing dollars that were previously dedicated to paid retargeting tactics in order to up your game in these key areas will, without a doubt, have provable ROI. I personally work for an agency of experts in branding, and we’d be more than happy to talk to you about how we can help.
Privacy is a good thing for consumers and advertisers
Our media team probably hates this article. Yours probably will too. We’re not trying to downplay how massive this change will be for brands and advertisers. KPIs still have to be met. ROI still has to be proven to stakeholders. Sales will still have to be churned out every single day, and finding new tactics to make those things happen will be a bigger challenge without access to IDFA data that existed pre-iOS 14.
But building your brand is what really matters in order to stand the test of time, and if you have a CRM, you probably already have a lot of what you need. Cleaning up that first-party data will be a big part of the necessary plan moving forward.
The iOS 14 update is a challenge to everyone in our industry to find what sets you apart from the rest, and tell that story better.
The most exciting twist to come from the Apple iOS 14 update will be watching how brands and advertisers choose to fill the gap. Without so much consumer data upfront, digital marketers likely won’t be able to move so quickly. And more thought will have to be put into where their budgets are going.
Isn’t more thoughtful advertising to an audience who wants to hear from you good for everyone?