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Last spring, Apple introduced the AppTracking Transparency Framework. Now different companies need to provide information about how their application collects and uses data from consumers. The user can then decide whether or not to be tracked by this app and use the device's ad identifier.
Digital advertisers won't have an easy time accessing their audiences. Therefore, they cannot understand the overall effectiveness of their campaigns.
Where the social media platforms are
This change will have a direct impact on several social media platforms and companies. But Facebook has openly opposed it, claiming that this update will affect the growth of millions of companies around the world. And it will prove a death sentence for small businesses with limited advertising budgets and no open avenues to access their target audience.
In response to Facebook's claims above, Apple immediately hit back. The company believes that if a company is reliant on misleading consumers by exploiting its data, it should not be praised for its policies.
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What positive change is Apple making with its iOS update?
From the users' point of view, this change is a positive sign as they gain more control over their privacy. You can control how much of your data can be used by whom.
People embrace each such step by tech companies because they are more aware of their data and how it is used. Of course, many users can opt out of this service because they don't want their data to be tracked. However, this will have a negative impact on companies that set a budget for advertising on these social media platforms.
Is it all so bad?
For some, Apple should be applauded for these efforts as it gives individuals more control over their privacy. But all is not well when you see the other side of the picture.
Small businesses will feel this blow right away. This is because they cannot afford any advertising campaigns other than social media platforms. But we have to dig deep here.
Facebook uses various metrics to provide advertisers with data about the effectiveness of its campaigns. One of those metrics is view-through conversions. This metric measures how many people view a particular ad but don't click on it. Now, the loss of the source of this type of information can be a severe blow to Facebook. And that's exactly what happens with the iOS 14 update.
Advertisers who do not accurately measure the overall effectiveness of the ads on Instagram and Facebook will switch to other platforms. These are the platforms where you can see the exact ROI (Return on Investment) of theoretical advertising campaigns. So Apple's policy directly affects Facebook, not small business owners.
How will it affect Facebook advertising?
Other platforms like Snapchat and Google haven't been very vocal on this issue. But they make sure that this guideline doesn't negatively affect their use too badly.
These platforms may have more support than the iOS 14 update. But they will also experience the ramifications that Facebook is talking about. In reality, Facebook has less data access with this update. And the same goes for its customers. Now they are unable to target advertisements effectively. These customers are also the small businesses that claim to be affected by the update.
But for many small businesses, nothing has changed with this update. Some small businesses don't need information as specific as Advertiser Identifier (IDFA). All you need is the location, distance, or primary age of the user. This data is available in the Facebook app. So no tracking is required here.
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Measurements and reports have changed
We still have to look at the full impact of Apple's new policy on Facebook's revenue, but things don't look good for the latter. Almost all iPhone users have downloaded the latest update, and experts say most users will turn off the tracking features. This can reduce Facebook's overall revenue by up to seven percent because advertisers cannot optimize their ad targeting. There will also be delayed reporting as there is no real-time data available.
Assignments and measured value calculations changed
Some metrics and attributions have also changed. This is due to the loss of data because users turned off tracking. Now Facebook has to rely on Apple's SKAd Network API to get its data. And that won't be real-time data that Facebook could pull straight from its app.
This leads to delayed reporting. Advertisers must wait at least three days to get what they want from Apple's SKAd Network API. So you don't rely on real-time data to design your campaigns.
Change is pretty scary without a doubt, but Facebook has been very efficient at handling change. And it will rebound strongly in these scenarios as well. The main idea here is to assess the overall impact and develop strategies to manage it.
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