How The Apple iOS 14 Changes Impact Facebook Advertising for DTC Companies

Apple iOS 14 changes will have a huge impact on the efficiency of DTC companies to advertise to their customers across many platforms, especially Facebook. These changes regarding demographics and targetting are a direct threat to the way Direct to consumer companies reach their audience and potential buys, all in the name of security and privacy.  While security and privacy are incredibly important, unfortunately, that ” chicken has already flown the coup” and the available information about individuals available on the net is staggering.

That said DTC companies need to find new ways to attract customers and create their own database of interested /potential customers. Methods like content marketing, influencer marketing, and partnering are just some of the ways we will explore.

Just remember, that a Direct-to-Consumer business owner has much more control of how their products come out and what resources are used to make their products, they can also decide how they choose to market and distribute their products. As stated earlier, most DTC businesses are completely online businesses where they post about their products, they market to their target audience, they sell from their online website, and most importantly, they use things like paid Facebook advertising and other paid advertising to reach their target market.

 

Table of Contents

How Direct-to-Consumer Companies Market to Their Audience

What Changes Came with Apple iOS 14?

The 3 Ways Apple IOS 14 Will Affect Facebook Advertising

  1. Loss of valuable insights
  2. Decrease in Segmentation
  3. Custom lists

4 Issues Apple’s iOS 14 Created for Facebook Ads & Their Solutions

  1. Pixel-Based Conversion reporting isn’t accurate anymore
  2. Inconsistent conversion rates
  3. Budgeting is unreliable
  4. Target Audiences are smaller than ever

Conclusion

 

 

How Direct-to-Consumer Companies Market to Their Audience

Because a lot of DTC business owners depend on Facebook for their advertising and marketing, the recent Apple iOS 14 update has made a huge impact on how they can run their online business, how they can analyze their data, and how they can use Facebook ads (and others) to their advantage.

Remember that the benefits of this kind of business model are that it costs a lot less to make and sell your products since you are the ones putting in the hours putting your products together. As the owner of the business, it is up to you to make your target audience aware of the benefits of your product over others so that consumers will want to buy. You do not have the luxury of offloading the marketing and advertising to a retailer. Therefore, how you reach your target audience is incredibly important.

Existing marketing predominantly focused on paid ads to get in front of potential buyers. There were other marketing channels of course but with the breadth of data available about potential customers and how to target them, many companies, not just DTC companies, relied on PPC ads primarily followed by email marketing to get in front of and keep customers.

The decision by some major ad platforms to change the way ads could be target sent cataclysmic shockwaves through the marketing departments of many companies. Chief among these far-reaching changes were the updates to Apples IOS 14.

 

What Changes Came with Apple iOS 14?

The recent Apple iOS 14 updates has introduced a variety of features that have made Facebook advertisers very upset. The update was created to give consumers more control when it comes to things like keeping their search history ‘private’ as well as more security when it comes to data collection on consumers. This control isn’t new by any means, and it has been around for a while, but instead of it automatically being checked and dismissed, consumers had to go into their own setting and manually check their settings and adjust them to what they wanted. So, if you felt like targeted ads were stalking you, you had to go into your settings and adjust your privacy settings so that would stop happening, but with the iOS 14 update, it’s now an automatic process.

When it came to data collection, it used to be an automatic ‘opt-in’ whereas now, this update allows consumers to make their own choice – they will be promoted to opt-in or opt-out of having their data collected for every app they use on their phone. If you do a lot of online shopping or social media browsing and you click on something, you will be asked if you want to opt into data collection or not.

This data collection is essentially data that shows what you search for, what you watch online, what you browse through online, etc. While it doesn’t seem like an invasion of privacy, it is. You may be looking for dog beds one day and then for the next couple of weeks the only ads you will see will be about dog beds. After a while, it can get annoying.

These changes with the Apple iOS 14 update will mostly affect those running their business and their advertising on social media platforms like Facebook, Snapchat, Pinterest, and TikTok, but it also affected different publishing sites like Buzzfeed and ad tech companies.

This change has caused a lot of people to ask why Apple made these changes. Apple wanted to reduce the amount of automated tracking that was happening online since so many people felt like their privacy was being violated. Have you ever been talking about something and then the next day you are seeing ads on your phone about that same thing? That’s a form of automated tracking that totally freaked people out. Apple made this change to make the consumers feel more protected and safer from these stalking ads.

 

The 3 Ways Apple IOS 14 Will Affect Facebook Advertising

This change will mostly affect those who choose Facebook as their main advertising platform, so if that’s you, this is the most important part to read. Regardless of what kind of provider your consumers have (Apple, Android, or Windows), they will all be affected by this new update.

Facebook is completely changing the way they collect data on their users, and it’s to protect their safety – not yours, the business owners. Here are the 4 major ways the iOS 14 update will affect Facebook advertising:

1.     Loss of valuable insights

One of the biggest things business owners will lose out on is their valuable insights from non-Facebook websites where pixels have already been installed. There is a large network of Facebook pixels installed web-wide, and this is what made business owners able to understand their consumers and get inside their minds essentially. These Facebook pixels are what told you what kind of shoes your target audience was looking for, or what kind of dog equipment they were looking for. Without these pixels, you can’t get inside the mind of your buyer as easily as you once could. You can still see their buying patterns, but you can’t see what they were searching for leading up to the actual purchase.

 

2.     Decrease in Segmentation

As a Facebook advertiser, you used to have access to performance breakdowns such as grouping your audiences by age or gender. With the new Apple update, you aren’t able to do this as easily anymore. Those segmentation breakdowns used to use different optimizations and data analysis and now that there is no longer any data to breakdown, you can categorize your audience anymore.

 

3.     Custom lists

Facebook advertising used to give you access to these amazing remarketing lists and other custom lists that used to allow you to understand everything about your buyer – it was almost like you knew them more than they knew themselves. These lists allowed you to tailor your ads and show them only things they were searching for or browsing, so you can put the right ad in front of them at the right time. These lists acted as monthly reporting for business owners because they could analyze them whenever they needed to. If sales weren’t increasing, they could use these lists to determine what changed in their consumer’s behaviors and they could better tailor their ads to those consumers.

 

4 Issues Apple’s iOS 14 Created for Facebook Ads & Their Solutions

You know what changes were made and how they affected Facebook advertisers. But what challenges do these business owners face and how can they avoid or resolve them?

1.     Pixel-Based Conversion reporting isn’t accurate anymore

Since Facebook pixels no longer exist, the reports and data you analyze from your Facebook advertising doesn’t seem to make sense anymore. Everything used to be accurate and up to date and now that you can’t see every action your target audience is taking, how can you gather accurate pixel-based conversation data? This used to tell you where people came from and what steps they took to get there. Without this information, you’re going to have a very hard time understanding the thoughts and processes of your consumers.

 

The Solution

To resolve reporting inaccuracy, you can do things like using Facebook lead-generating tactics such as their messenger function to gather much more reliable data. Or, you can implement conversions API and optimize your campaigns as back-end events instead.

 

2.     Inconsistent conversion rates

One of the most frustrating things Facebook advertisers are running into is inconsistent conversion rates. As an online business owner, your conversion rates are one of the major key performance indicators (KPIs) you have access to that measure success within your business. Data is constantly changing and it’s never going to be consistent, but the major drops people are seeing in their business aren’t consistent with the revenue coming in – meaning something is off somewhere along the line.

 

The Solution

If this is the main issue you are dealing with, you should start diversifying your targeting by testing different kinds of targeting. Test our targeting tactics to those already interested in your brand, those who look like they are interested in your brand, and even third-party audiences.

 

3.     Budgeting is unreliable

Depending on the size of your business, your budget can be tight. Meaning, if your Facebook advertising budget is thrown off at all, it can ruin your year-end reporting. This is another issue Facebook advertisers are noticing after the iOS 14 update. Business owners go into Facebook and set their budget and the platform pushes their ads based on their budget. The way Facebook is allocating budgets is becoming very disproportionate and causing issues with business owners.

 

The Solution

If this is the issue you are dealing with, you can update your settings to stop Facebook from pushing your ad so you don’t go over your set budget. Put the ‘backstop’ rule to pause when your budget has been reached so you don’t have to worry about overspending.

 

4.     Target Audiences are smaller than ever

While Facebook advertisers saw this issue coming, it didn’t make the blow any less harsh. Pixel-based targeting is creating smaller groups that seem to be harder to reach. Meaning, you can’t easily find your target audience and show them the relevant ads to what they are always looking for. The loss of pixel-based tracking has made it harder for even Facebook to gather this data and create these groups, so it’s really just a domino effect that Facebook advertisers are taking the biggest hit for.

 

The Solution

When it comes to not being able to find and market to your target audience as easily, you need to leverage what information you do have and find alternative data sources. The first type of data you want to use is first-party data. These are things like consumers’ emails, phone numbers, etc. The second option is to use engagement-based targeting and targeting consumers who engage with your business on social media, on your website, etc. The last option is to try out video-based targeting. If you post a lot of video content on your social media platforms, you can target consumers who have watched a certain amount or percentage of your video content. Each option is great, you just have to figure out which exact one works for you and your business.

 

Conclusion

When it comes to talking about the future of Facebook advertising after one of the biggest iOS updates Apple has ever launched, there isn’t much certainty. But what will be said is that as a business owner, especially if you’re a DTC business, you will be constantly learning new ways of how to run your business, more specifically, how to get your ads in front of the right people.

Facebook advertising was never easy – it involves a lot of data analysis and reporting, and if you can’t turn that data into actionable solutions, that data is useless. When it comes to getting inside the mind of the buyer, you can’t just think “Okay if I was them, what would I do next?”, you have to look through the different actions they took leading up to an actual purchase and ask yourself “Okay, why did they do that and what did it take for them to actually make the purchase?”

 

While navigating these new Apple iOS 14 changes is going to be constant anger and frustration, it’s the way the world is moving but there are always ways to get inside the mind of your buyers – you just have to get a little creative!

 

about jay sung

About the Author

For over 25 years, Jay Sung has been a passionate leader in driving sustainable growth through direct-to-consumer, e-commerce, and customer acquisition strategies. Mr. Sung oversees corporate branding and growth initiatives utilizing a continuously evolving toolkit of digital marketing strategies and technologies to drive innovative direct marketing programs for portfolio companies – from startups to Fortune 500 organizations.

Previously, Mr. Sung served as the Chief Marketing Officer for Guthy-Renker, a $1.3 billion industry leader in the direct-to-consumer health and beauty market. He is best known for developing consumer acquisition and marketing strategies for leading brands such as Meaningful Beauty® with Cindy Crawford, Wen® Haircare by Chaz Dean, IT Cosmetics™, and many others. In addition, he served as the CEO of such well-known brands as The Proactiv Company and Lot18.

Mr. Sung lives in Los Angeles, enjoying all Southern California has to offer. You’ll frequently find him reading the latest business journal, cooking, or practicing the piano to relax. Mr. Sung earned his Bachelor of Science degree in economics with a double concentration in marketing and accounting from the Wharton School at the University of Pennsylvania.

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