Press    Apple roiled advertisers in 2021 with privacy changes. Here’s what 10 experts think it’ll do to disrupt the ad industry next.

Original Publisher
Business Insider

When Apple announced in 2020 it was introducing a new privacy update that would allow users to opt out of being tracked via its Identifier for Advertisers, some people in the advertising industry thought Android’s AdID would be the next to follow suit shoe to drop.

On Wednesday, Google announced its early-stage preparations for its version of Apple’s privacy update. It set the countdown clock for its support of AdID at “at least two years.” In the meantime, Google said it would work with the industry to develop new privacy-focused AdTech alternatives as part of its “Privacy Sandbox” initiative.

Now the ball is back in Apple’s court.

Advertisers, app developers, and the tech vendors that connect then will be closely watching Apple’s annual Worldwide Developer Conference in June for yet more privacy announcements.

“They are still pointing at a north star of stopping pervasive cross-app tracking,” said an AdTech veteran who requested anonymity because they were not authorized to speak to the press on behalf of their organization. “You can set your watch by it: They will make an announcement, I’m sure, at WWDC.”

Insider spoke to 10 mobile ad industry experts who speculated on what could materialize at Apple’s summer event. Their predictions varied from Apple turning the privacy screws more tightly to the company making further strides to strengthen its own advertising business.

Apple didn’t immediately respond to a request for comment.

Apple could launch its own version of Privacy Sandbox

As Google’s Privacy Sandbox attempts to put its testing of privacy-focused ad tools out in the open, some experts speculated Apple might be doing something similar in private.

Madan Bharadwaj, CTO of analytics firm Measured, mused on whether Apple might have bigger plans for ad measurement, similar to the way that Google has posited grouping consumers into “cohorts,” based around topics of interest, rather than being able to identify and target individual users.

Apple could be planning something more ambitious — perhaps even another crack at launching a broader advertising business. A recent job ad description, for example, said the company is “setting new standards for enabling effective advertising while protecting user privacy.”

 

 

When Apple announced in 2020 it was introducing a new privacy update that would allow users to opt out of being tracked via its Identifier for Advertisers, some people in the advertising industry thought Android’s AdID would be the next to follow suit shoe to drop.

On Wednesday, Google announced its early-stage preparations for its version of Apple’s privacy update. It set the countdown clock for its support of AdID at “at least two years.” In the meantime, Google said it would work with the industry to develop new privacy-focused AdTech alternatives as part of its “Privacy Sandbox” initiative.

Now the ball is back in Apple’s court.

Advertisers, app developers, and the tech vendors that connect then will be closely watching Apple’s annual Worldwide Developer Conference in June for yet more privacy announcements.

“They are still pointing at a north star of stopping pervasive cross-app tracking,” said an AdTech veteran who requested anonymity because they were not authorized to speak to the press on behalf of their organization. “You can set your watch by it: They will make an announcement, I’m sure, at WWDC.”

Insider spoke to 10 mobile ad industry experts who speculated on what could materialize at Apple’s summer event. Their predictions varied from Apple turning the privacy screws more tightly to the company making further strides to strengthen its own advertising business.

Apple didn’t immediately respond to a request for comment.

Apple could launch its own version of Privacy Sandbox

As Google’s Privacy Sandbox attempts to put its testing of privacy-focused ad tools out in the open, some experts speculated Apple might be doing something similar in private.

Madan Bharadwaj, CTO of analytics firm Measured, mused on whether Apple might have bigger plans for ad measurement, similar to the way that Google has posited grouping consumers into “cohorts,” based around topics of interest, rather than being able to identify and target individual users.

Apple could be planning something more ambitious — perhaps even another crack at launching a broader advertising business. A recent job ad description, for example, said the company is “setting new standards for enabling effective advertising while protecting user privacy.”

 

Original Publisher
Business Insider

Press    Apple’s new major iOS change lets you decide if you want brands to track you across apps.

Original Publisher
Business Insider

It’s been just two weeks since Apple rolled out its iPhone privacy changes, and already chaos has ensued for many mobile advertisers and app developers, who are bracing for the full impact as more users update to the latest version of its software.

Apple’s iOS 14.5 update, which began rolling out on April 26, requires apps to serve a permission pop-up to users to gain permission to track them for advertising purposes. If a person clicks “Ask App Not to Track,” Apple will no longer grant access to that user’s Identifier for Advertisers, or IDFA, which allows advertisers to track users and build profiles on them as they hop between other apps and websites.

Already, some companies in the space are reporting low user opt-in rates, falling ad prices, and increased opacity around advertising measurement as a result of the App Tracking Transparency changes.

About 96% of iOS 14.5 users in the US who have been presented with the privacy pop-ups opted out of ad tracking, according to the mobile-analytics service Flurry’s daily tracker on May 7. Worldwide, that figure was a little lower, at 88%. Social apps have seen the lowest opt-in rates, with utilities, weather, and gaming apps having some of the highest, Ben Holmes, the senior vice president of performance and exchange at the mobile-ad firm AdColony, said during a panel on the Clubhouse app Thursday. (Some users’ settings prevent them from being served the pop-ups at all.)

It’s early days, but ad prices for iPhone users are also dropping, which could reflect a diminished trackable audience, though ad prices can often fluctuate over any given day or week. The location-focused adtech company Blis said the cost to reach 1,000 iOS 14.5 users — CPMs, in ad industry parlance — were 14% lower than the rates to reach users on the earlier version of iOS over the past week. Verve, a fellow location-focused mobile-ad platform, said CPMs across all versions of iOS had fallen 3% on average between the App Tracking Transparency rollout and May 6.

That’s bad news for developers who monetize their apps through advertising. The mobile-game publisher Tilting Point told Digiday earlier this week it had a 30% drop in CPMs between users with the IDFA and those without.

One of the biggest frustrations advertisers have expressed around the changes is the hampering of their ability to analyze which of their ad campaigns are working. Apple’s privacy-focused measurement solution, SKAdNetwork, lacks many of the real-time reporting bells and whistles that sophisticated mobile marketers are used to.

The biggest spenders on app advertising are often app owners themselves, which look to find users most likely to download their games, fitness, and delivery apps. Marketers in this field are adept at precision-targeting ads to people most likely to buy a product or download an app and accurately measuring which ads drove which actions.

Jenny Crook, the vice president of mobile product at the digital-ad agency Jellyfish, compared the disruption to these marketers to the retirement of the high-speed Concorde aircraft.

“Everything is regressing. You saw what was possible: I can target that person from an ad, to what they install, track it to the analytics, know they saw an ad of a dog, then personalize the app to being dog-related,” Crook said.

To be sure, many of the mobile-advertising experts Insider spoke with for this article said they hadn’t seen a marked decline in the performance of their Apple app-advertising campaigns since the App Tracking Transparency rollout. One media buyer even said they’d noticed an improvement in their iOS campaign performance over the past two weeks.

But with only about 8% of users on iOS 14.5 so far, according data from the mobile-measurement service AppsFlyer, the true influence of Apple’s privacy update may not be felt for some months to come. And even by May 4, only 13% of developers had rolled out their privacy pop-ups, according to AppsFlyer.

Apple did not respond to a request for comment.

There’s a big question mark over measurement and retargeting

Without carte-blanche access to the IDFA, accurate measurement of campaigns has become a tricky puzzle to solve for advertisers and their vendors.

Apple’s SKAdNetwork offers a more limited view, based on much larger cohorts of users than some advertisers are used to. Those cohorts are intentionally broad-based so advertisers, vendors, and data brokers can’t reverse-engineer the data and build user profiles. Apple hasn’t made public its “privacy threshold” — the minimum number of users required to create such a cohort — which Crook said could hurt smaller advertisers running smaller campaigns.

Another limitation of the SKAdNetwork, experts say, is that Apple allows advertisers to measure only 100 campaigns at any given time.

That’s a significant change, said Charles Manning, the CEO of the app-measurement firm Kochava, because one tactic in marketing is “to create and have unique tracking capabilities and exposure across every microtargeting category you can imagine” and run different ad campaigns for each.
“Being able to micromeasure every county, ZIP code, gender, demographic, with thousands of tracking links that are unique and different — when you spend money, immediately the wheat gets separated from the chaff,” Manning said.

Retargeting, an advertising technique where advertisers hit users with ads who have already browsed their site, is also proving more difficult. The audience segments available to advertisers are getting smaller, presumably because of low opt-in rates, Madan Bharadwaj, the chief technology officer at the measurement agency Measured, said.

As is often the case with major disruptions in the digital-ad industry, bigger platforms are in a better position to adapt to the changes.

Apple’s definition of tracking makes a clear distinction between the sharing of data between companies — or third-party data — or the sharing of data within a single company, first-party data, even if that company owns several apps. Despite vocally protesting the App Tracking Transparency changes, Facebook recently said it could be a tailwind for its business.

That’s the reason Apple’s privacy changes are thought to have sparked a wave of mergers and acquisitions between companies in the gaming and mobile-adtech space as companies look to build large networks of highly trafficked apps and in-house measurement capabilities. This week, the mobile-game giant Zynga said it planned to acquire the advertising firm Chartboost, one of the companies on this original list, for $250 million in cash.

Advertisers and app developers have no choice but to adapt

Apple’s App Tracking Transparency rollout isn’t the only privacy shift in digital advertising that marketers and publishers are making preparations for. Google last year announced plans to remove third-party tracking cookies from its Chrome browser. And new privacy regulations and enforcement of existing laws like Europe’s General Data Protection Regulation are coming to fruition around the globe.

As the industry adapts to more privacy-focused advertising methods, experts predict advertisers will need to place less focus on the hypertargeting of ads and more on the content of the ads and the context surrounding where those ads are placed.

On a Clubhouse panel on Thursday, Angelina Eng, the vice president of measurement and attribution, at the Interactive Advertising Bureau, predicted a rise in “shoppable ads.” In this type of format, a user completes a transaction inside the app, rather than being sent off to another website, which Apple would deem to be “tracking” if the advertiser wanted to measure that sale.

“The increase in the adoption of shoppable ads is going to be critical to help them at least be able to measure,” Eng said, pointing to recent developments by platforms including YouTube, TikTok, and Twitter to create shoppable ads and tools to keep users within their own platforms.

Some experts have predicted that if in-app advertising proves ineffective as the influence of the privacy changes shakes out, advertisers will shift their spending to other platforms. Those could include Android — which hasn’t made a similar move with its mobile-ad identifier — platforms with sophisticated data and targeting options like Facebook and Amazon, and traditional media.

Apple also recently, and perhaps by no coincidence, launched its own new ad product within the App Store, designed to help developers get their ads discovered.

As the dust settles on Apple’s privacy update, developers are looking to the next beat of the issue: enforcement and how hard Apple’s hammer will come down on companies who attempt to skirt its rules. The Financial Times reported Apple issued cease-and-desist letters to developers hoping to use a workaround in China called the China Advertising ID, and it has rejected other apps for using other adtech that flouts its rules.

“I think Apple has shown their hand in this — they are very, very, very serious about it,” said Dan Beasley, a cofounder of Viker, a developer that produces mobile games such as “Who Wants to Be a Millionaire” and “Word Puzzles.” “I think it’s going to be a constant game of cat and mouse.”

 

Without carte-blanche access to the IDFA, accurate measurement of campaigns has become a tricky puzzle to solve for advertisers and their vendors.

It’s been just two weeks since Apple rolled out its iPhone privacy changes, and already chaos has ensued for many mobile advertisers and app developers, who are bracing for the full impact as more users update to the latest version of its software.

Apple’s iOS 14.5 update, which began rolling out on April 26, requires apps to serve a permission pop-up to users to gain permission to track them for advertising purposes. If a person clicks “Ask App Not to Track,” Apple will no longer grant access to that user’s Identifier for Advertisers, or IDFA, which allows advertisers to track users and build profiles on them as they hop between other apps and websites.

Already, some companies in the space are reporting low user opt-in rates, falling ad prices, and increased opacity around advertising measurement as a result of the App Tracking Transparency changes.

About 96% of iOS 14.5 users in the US who have been presented with the privacy pop-ups opted out of ad tracking, according to the mobile-analytics service Flurry’s daily tracker on May 7. Worldwide, that figure was a little lower, at 88%. Social apps have seen the lowest opt-in rates, with utilities, weather, and gaming apps having some of the highest, Ben Holmes, the senior vice president of performance and exchange at the mobile-ad firm AdColony, said during a panel on the Clubhouse app Thursday. (Some users’ settings prevent them from being served the pop-ups at all.)

It’s early days, but ad prices for iPhone users are also dropping, which could reflect a diminished trackable audience, though ad prices can often fluctuate over any given day or week. The location-focused adtech company Blis said the cost to reach 1,000 iOS 14.5 users — CPMs, in ad industry parlance — were 14% lower than the rates to reach users on the earlier version of iOS over the past week. Verve, a fellow location-focused mobile-ad platform, said CPMs across all versions of iOS had fallen 3% on average between the App Tracking Transparency rollout and May 6.

That’s bad news for developers who monetize their apps through advertising. The mobile-game publisher Tilting Point told Digiday earlier this week it had a 30% drop in CPMs between users with the IDFA and those without.

One of the biggest frustrations advertisers have expressed around the changes is the hampering of their ability to analyze which of their ad campaigns are working. Apple’s privacy-focused measurement solution, SKAdNetwork, lacks many of the real-time reporting bells and whistles that sophisticated mobile marketers are used to.

The biggest spenders on app advertising are often app owners themselves, which look to find users most likely to download their games, fitness, and delivery apps. Marketers in this field are adept at precision-targeting ads to people most likely to buy a product or download an app and accurately measuring which ads drove which actions.

Jenny Crook, the vice president of mobile product at the digital-ad agency Jellyfish, compared the disruption to these marketers to the retirement of the high-speed Concorde aircraft.

“Everything is regressing. You saw what was possible: I can target that person from an ad, to what they install, track it to the analytics, know they saw an ad of a dog, then personalize the app to being dog-related,” Crook said.

To be sure, many of the mobile-advertising experts Insider spoke with for this article said they hadn’t seen a marked decline in the performance of their Apple app-advertising campaigns since the App Tracking Transparency rollout. One media buyer even said they’d noticed an improvement in their iOS campaign performance over the past two weeks.

But with only about 8% of users on iOS 14.5 so far, according data from the mobile-measurement service AppsFlyer, the true influence of Apple’s privacy update may not be felt for some months to come. And even by May 4, only 13% of developers had rolled out their privacy pop-ups, according to AppsFlyer.

Apple did not respond to a request for comment.

There’s a big question mark over measurement and retargeting

Without carte-blanche access to the IDFA, accurate measurement of campaigns has become a tricky puzzle to solve for advertisers and their vendors.

Apple’s SKAdNetwork offers a more limited view, based on much larger cohorts of users than some advertisers are used to. Those cohorts are intentionally broad-based so advertisers, vendors, and data brokers can’t reverse-engineer the data and build user profiles. Apple hasn’t made public its “privacy threshold” — the minimum number of users required to create such a cohort — which Crook said could hurt smaller advertisers running smaller campaigns.

Another limitation of the SKAdNetwork, experts say, is that Apple allows advertisers to measure only 100 campaigns at any given time.

That’s a significant change, said Charles Manning, the CEO of the app-measurement firm Kochava, because one tactic in marketing is “to create and have unique tracking capabilities and exposure across every microtargeting category you can imagine” and run different ad campaigns for each.
“Being able to micromeasure every county, ZIP code, gender, demographic, with thousands of tracking links that are unique and different — when you spend money, immediately the wheat gets separated from the chaff,” Manning said.

Retargeting, an advertising technique where advertisers hit users with ads who have already browsed their site, is also proving more difficult. The audience segments available to advertisers are getting smaller, presumably because of low opt-in rates, Madan Bharadwaj, the chief technology officer at the measurement agency Measured, said.

As is often the case with major disruptions in the digital-ad industry, bigger platforms are in a better position to adapt to the changes.

Apple’s definition of tracking makes a clear distinction between the sharing of data between companies — or third-party data — or the sharing of data within a single company, first-party data, even if that company owns several apps. Despite vocally protesting the App Tracking Transparency changes, Facebook recently said it could be a tailwind for its business.

That’s the reason Apple’s privacy changes are thought to have sparked a wave of mergers and acquisitions between companies in the gaming and mobile-adtech space as companies look to build large networks of highly trafficked apps and in-house measurement capabilities. This week, the mobile-game giant Zynga said it planned to acquire the advertising firm Chartboost, one of the companies on this original list, for $250 million in cash.

Advertisers and app developers have no choice but to adapt

Apple’s App Tracking Transparency rollout isn’t the only privacy shift in digital advertising that marketers and publishers are making preparations for. Google last year announced plans to remove third-party tracking cookies from its Chrome browser. And new privacy regulations and enforcement of existing laws like Europe’s General Data Protection Regulation are coming to fruition around the globe.

As the industry adapts to more privacy-focused advertising methods, experts predict advertisers will need to place less focus on the hypertargeting of ads and more on the content of the ads and the context surrounding where those ads are placed.

On a Clubhouse panel on Thursday, Angelina Eng, the vice president of measurement and attribution, at the Interactive Advertising Bureau, predicted a rise in “shoppable ads.” In this type of format, a user completes a transaction inside the app, rather than being sent off to another website, which Apple would deem to be “tracking” if the advertiser wanted to measure that sale.

“The increase in the adoption of shoppable ads is going to be critical to help them at least be able to measure,” Eng said, pointing to recent developments by platforms including YouTube, TikTok, and Twitter to create shoppable ads and tools to keep users within their own platforms.

Some experts have predicted that if in-app advertising proves ineffective as the influence of the privacy changes shakes out, advertisers will shift their spending to other platforms. Those could include Android — which hasn’t made a similar move with its mobile-ad identifier — platforms with sophisticated data and targeting options like Facebook and Amazon, and traditional media.

Apple also recently, and perhaps by no coincidence, launched its own new ad product within the App Store, designed to help developers get their ads discovered.

As the dust settles on Apple’s privacy update, developers are looking to the next beat of the issue: enforcement and how hard Apple’s hammer will come down on companies who attempt to skirt its rules. The Financial Times reported Apple issued cease-and-desist letters to developers hoping to use a workaround in China called the China Advertising ID, and it has rejected other apps for using other adtech that flouts its rules.

“I think Apple has shown their hand in this — they are very, very, very serious about it,” said Dan Beasley, a cofounder of Viker, a developer that produces mobile games such as “Who Wants to Be a Millionaire” and “Word Puzzles.” “I think it’s going to be a constant game of cat and mouse.”

Original Publisher
Business Insider

 

Without carte-blanche access to the IDFA, accurate measurement of campaigns has become a tricky puzzle to solve for advertisers and their vendors.

Press    Apple Is About to Roll Out Privacy Changes, And Advertisers Worry They’ll Make It Harder To Tell If Their Ads Are Working

Original Publisher
Business Insider

Apple’s looming privacy changes are about to upend digital advertising.

The controls are expected to take effect in March and will require app developers to ask users for permission before tracking them via Apple’s Identifier for Advertisers (IDFA). They’re expected to dent advertisers’ ability to pinpoint ads for people and see if they’re working.

“This is our industry’s equivalent of Y2K,” Doug Rozen, the CEO of Dentsu Media Americas, said.

One big concern for advertisers is how Apple’s policy will limit campaign measurement and attribution on Facebook, with the measurement startup Measured’s chief technology officer, Madan Bharadwaj, calling it “a huge blow to measurement.” While these changes affect the whole mobile-app ecosystem, many advertisers rely on Facebook and its massive Audience Network to run and personalize ads on their own platforms and other third-party apps.

Facebook said it would shutter conversion-lift studies in a blog post published last week. Such studies use test and control groups to measure incremental returns on ad campaigns and gauge people’s propensity to buy the products after seeing ads on the platform, and have been widely used in recent years by a variety of advertisers, including Dick’s Sporting Goods and eBay.

With these lift tests going away, some buyers said they expected the industry to go back to older measurement techniques like geo matched-market testing, where advertisers would test TV campaigns by comparing results from ads in one geographical market with another similar market where the TV campaign wasn’t aired. One media buyer, who spoke on condition of anonymity because they weren’t authorized to speak publicly, said Facebook was running a beta test for such a tool.

“It’s like going back to the ‘Mad Men’ era,” Bharadwaj said. “It’s not the most high-quality approach, but you can automate it a lot more today.”

For others, measurement getting less granular isn’t necessarily bad. Andrew Richardson, the senior vice president of analytics and marketing science at the performance-marketing agency Tinuiti, said the IDFA changes would lead advertisers to opt for approaches like media-mix modeling and use insights from a variety of sources, rather than one platform like Facebook.

Facebook, for its part, said it had started informing advertisers about the effects to conversion lift and giving them guidance to prepare for the changes.

The changes are also expected to hurt Facebook’s own business, the company said. IDFAs going away could wipe out as much as 7% — or $5 billion — of Facebook’s total revenue in the second quarter of 2021, according to the mobile consultant Eric Seufert. The company also has a new ad campaign touting how it helps small businesses personalize their advertising.

Apple’s changes could especially hurt DTC advertisers

Buyers said they were preparing advertisers for the impact by encouraging them to beef up their first-party data. Some brands have been getting increasingly creative with gathering first-party data as Apple and Google clamp down on ad targeting and privacy regulations loom. Google said this week that it would no longer track individual users as they browse the web, as part of its move to eliminate third-party cookies that are used to target digital ads.

It’s unknown how many Apple users will opt out of being tracked when given the choice. More than 50% of mobile marketers surveyed by the mobile-attribution provider AppsFlyer and MMA Global in September said they expected at least a 50% reduction in the availability of IDFAs to them once the changes took effect.

The impact could be particularly devastating for a subset of advertisers, including direct-to-consumer and other direct-response advertisers that rely heavily on the Facebook ad ecosystem for performance marketing and user acquisition, ad buyers told Insider. The dating app Bumble, for example, said Apple’s changes could hamper its business. Facebook itself relies on such advertisers for the bulk of its advertising revenue.

“Performance-driven brands that have built their entire user-acquisition engines on the back of Facebook measurement and attribution are on edge,” Measured’s Bharadwaj said. “Brand advertising, where you throw half a million dollars on a campaign and can’t measure everything as granularly, is just not the type of advertising that they can afford to do.”

If people don’t opt in, targeting and tracking them across media channels including Facebook will get harder, making it more difficult to measure how ads work on the platform, Simon Poulton, the vice president of digital intelligence at the digital-ad agency Wpromote, said. This may prompt small businesses that make up the bulk of Facebook’s advertisers to cut spending in the short term, which would hurt their growth, he said.

“When you’re dealing with million-dollar budgets, some targeting-efficiency losses hurt, but you are more resilient to explore new targeting techniques,” he said. “But smaller brands typically have much smaller budgets and may not be able to maintain investment levels if they aren’t seeing the returns.”

 

It's like going back to the 'Mad Men' era. It's not the most high-quality approach, but you can automate it a lot more today.

Apple’s looming privacy changes are about to upend digital advertising.

The controls are expected to take effect in March and will require app developers to ask users for permission before tracking them via Apple’s Identifier for Advertisers (IDFA). They’re expected to dent advertisers’ ability to pinpoint ads for people and see if they’re working.

“This is our industry’s equivalent of Y2K,” Doug Rozen, the CEO of Dentsu Media Americas, said.

One big concern for advertisers is how Apple’s policy will limit campaign measurement and attribution on Facebook, with the measurement startup Measured’s chief technology officer, Madan Bharadwaj, calling it “a huge blow to measurement.” While these changes affect the whole mobile-app ecosystem, many advertisers rely on Facebook and its massive Audience Network to run and personalize ads on their own platforms and other third-party apps.

Facebook said it would shutter conversion-lift studies in a blog post published last week. Such studies use test and control groups to measure incremental returns on ad campaigns and gauge people’s propensity to buy the products after seeing ads on the platform, and have been widely used in recent years by a variety of advertisers, including Dick’s Sporting Goods and eBay.

With these lift tests going away, some buyers said they expected the industry to go back to older measurement techniques like geo matched-market testing, where advertisers would test TV campaigns by comparing results from ads in one geographical market with another similar market where the TV campaign wasn’t aired. One media buyer, who spoke on condition of anonymity because they weren’t authorized to speak publicly, said Facebook was running a beta test for such a tool.

“It’s like going back to the ‘Mad Men’ era,” Bharadwaj said. “It’s not the most high-quality approach, but you can automate it a lot more today.”

For others, measurement getting less granular isn’t necessarily bad. Andrew Richardson, the senior vice president of analytics and marketing science at the performance-marketing agency Tinuiti, said the IDFA changes would lead advertisers to opt for approaches like media-mix modeling and use insights from a variety of sources, rather than one platform like Facebook.

Facebook, for its part, said it had started informing advertisers about the effects to conversion lift and giving them guidance to prepare for the changes.

The changes are also expected to hurt Facebook’s own business, the company said. IDFAs going away could wipe out as much as 7% — or $5 billion — of Facebook’s total revenue in the second quarter of 2021, according to the mobile consultant Eric Seufert. The company also has a new ad campaign touting how it helps small businesses personalize their advertising.

Apple’s changes could especially hurt DTC advertisers

Buyers said they were preparing advertisers for the impact by encouraging them to beef up their first-party data. Some brands have been getting increasingly creative with gathering first-party data as Apple and Google clamp down on ad targeting and privacy regulations loom. Google said this week that it would no longer track individual users as they browse the web, as part of its move to eliminate third-party cookies that are used to target digital ads.

It’s unknown how many Apple users will opt out of being tracked when given the choice. More than 50% of mobile marketers surveyed by the mobile-attribution provider AppsFlyer and MMA Global in September said they expected at least a 50% reduction in the availability of IDFAs to them once the changes took effect.

The impact could be particularly devastating for a subset of advertisers, including direct-to-consumer and other direct-response advertisers that rely heavily on the Facebook ad ecosystem for performance marketing and user acquisition, ad buyers told Insider. The dating app Bumble, for example, said Apple’s changes could hamper its business. Facebook itself relies on such advertisers for the bulk of its advertising revenue.

“Performance-driven brands that have built their entire user-acquisition engines on the back of Facebook measurement and attribution are on edge,” Measured’s Bharadwaj said. “Brand advertising, where you throw half a million dollars on a campaign and can’t measure everything as granularly, is just not the type of advertising that they can afford to do.”

If people don’t opt in, targeting and tracking them across media channels including Facebook will get harder, making it more difficult to measure how ads work on the platform, Simon Poulton, the vice president of digital intelligence at the digital-ad agency Wpromote, said. This may prompt small businesses that make up the bulk of Facebook’s advertisers to cut spending in the short term, which would hurt their growth, he said.

“When you’re dealing with million-dollar budgets, some targeting-efficiency losses hurt, but you are more resilient to explore new targeting techniques,” he said. “But smaller brands typically have much smaller budgets and may not be able to maintain investment levels if they aren’t seeing the returns.”

Original Publisher
Business Insider

 

It's like going back to the 'Mad Men' era. It's not the most high-quality approach, but you can automate it a lot more today.