Apple vs. Facebook: The Fight Over Consumer Data and What It Means for Businesses and Advertising
There’s been a lot of noise around data privacy and consumer protections recently. If you’ve seen (or heard about) the film The Social Dilemma, you probably know what we’re talking about. The film and the rallying cry of many data privacy advocates have spurred a call for limiting what information tech companies and the advertisers and businesses that utilize their platforms can collect and track about users.
Last summer, Apple announced its new AppTrackingTransparency framework as part of a future iOS 14 update, which will enable users to choose how they want apps to track their data and movements around the Internet. The change will specifically impact companies like Facebook and Instagram that make money by selling this information to third parties.
Businesses and advertisers that use these platforms as a medium for mobile advertising won’t have the visibility and insight they previously had into consumer behavior and activity for many users with Apple devices with iOS 14, and how they interact with ads. The changes will limit advertisers’ ability to target and access specific audiences/potential customers. Apple reports that iOS 14 is installed on 80% of all active iPhones and on 86% of iPhones introduced in the last 4 years, as measured by the App Store on February 24, 2021.
Boathouse has been actively monitoring all of the changes, especially relative to how they will affect our clients. Let’s dig into some of the back story: what it means, how it will affect businesses and advertisers, as well the steps we’re taking to help our client businesses prepare for the changes.
Background on the Battle Over Consumer Data
As part of their marketing campaigns, advertisers have successfully used the Facebook platform, in addition to many other platforms, to target prospective customers by tracking their online behaviors and interests, and then serving them hyper-targeted content and ads tailored to them based on that information.
Apple CEO Tim Cook said the change is rooted in the company’s belief that “users should have the choice over the data that is being collected about them and how it’s used.” So, at some point this spring, Apple’s iOS software for iPhones will require that apps get explicit consent to track what people are doing on their mobile devices for the purposes of sharing it with third parties. Apple will require apps in the App Store to send push alerts to users, through which they can either opt in or out of tracking their data and interactions. Facebook has argued that these changes will be “devastating to small businesses” that rely on personalized advertisements to reach customers and find new ones. They even launched an ad campaign supporting their opposition to Apple’s changes: “We’re standing up to Apple for small businesses everywhere” and Good Ideas Deserve to Be Found. These changes will continue to allow measurement of conversion events from iOS 14 devices, albeit with limitations, to bridge the gap between user privacy and effective campaign management.
NPR reports that during a recent interview, Facebook’s director of privacy and public policy, Steve Satterfield, argued that this is an attempt by Apple to undercut the business model used by Facebook and other ad-supported free apps. “[T]his is going to have a real impact on the Internet as we know it, which is increasingly going to move to a paid experience, which again, benefits Apple’s bottom line,” Satterfield said.
However, in recent days, according to a report from CNBC, Mark Zuckerberg now says Apple’s iOS 14 privacy feature might benefit Facebook: “It’s possible that we may even be in a stronger position if Apple’s changes encourage more businesses to conduct more commerce on our platforms by making it harder for them to use their data in order to find the customers that would want to use their products outside of our platforms.” Facebook has prepared for the looming Apple changes by introducing more commerce products. Most notably, the social media company in 2020 introduced Facebook Shops and Instagram Shops. These features make it possible for brands to list their product catalogs directly on Facebook’s most popular apps, and sell goods directly on Facebook and Instagram.
Whether these changes are in response to questionable practices around tracking consumers’ online activity and data collection, or a culmination of the fierce competition between these two tech titans, they pose real challenges for businesses and advertisers that have come to rely on the platform to reach potential customers.
The Technical Aspects of the Changes
To adapt to Apple’s requirements, Facebook has made extensive changes that will affect campaign setup, pixel strategy, reporting, and analytics. Below is a summary of some of the changes that will affect our clients directly. You can find more detailed information on the Facebook changes here.
Pixel Limitations: Advertisers will now be required to choose and prioritize eight events that can be used for optimization per website domain (includes both standard events and custom conversions). For people who opt in to tracking, Facebook will return the maximum eight events. When a user opts out of sharing their data with Facebook and the family of apps, only the highest-ranked event will be tracked.
For example, previously, for a website visit, we were able to track and measure when a user:
Visited the product page
Added a product to a shopping cart
Purchased a product, for this segment of users
Now, only the highest-priority event will be reported: the purchase.
Campaign and Ad Set Limits: Each ad account will be limited to nine campaigns with five ad sets each.
Shortened Attribution Window: Facebook will now report fewer conversions, relying on a default 7-day click attribution model for all conversions. 28-day click-through, 28-day view-through, and 7-day view-through attribution windows will not be supported.
Delivery and Action Breakdowns: Reporting by age, gender, region, and/or placement will not be supported for conversion events.
Delayed Reporting: Real-time reporting will no longer be supported, and data may be delayed up to 3 days. Pulling reports any sooner than 3 days after campaign end could exclude performance.
Audience Size: Because less data will be collected, remarketing audiences will be smaller.
Over the last few months, Boathouse developed a plan of attack to prepare for the changes. We have been working with clients to ensure a smooth transition to work within Facebook’s coming changes and successfully pivot active or upcoming campaigns.
The Boathouse Approach to These Changes
In the world of advertising and online marketing, there will always be changes, disruptions, new players, and innovations right around the corner—especially as consumers become more attuned to data privacy concerns. In a recent interview, analyst Dan Ives contends that this Facebook-Apple row is setting the stage for a larger fight over how technology companies will balance privacy with data collection in the digital economy.
These changes are a reminder for advertisers that we can never become complacent with our strategies and tactics. We constantly need to stay at the forefront of potential industry and platform changes and what they mean for our clients’ bottom lines.
At Boathouse, our commitment to our clients’ business goals remains uncompromised. While the current changes by Apple and Facebook pose some near-term challenges, they are also an opportunity for us to cut through the clutter and focus on fundamentals.
The results we used to see from Facebook and Instagram will change, but at Boathouse we are constantly looking holistically at data and will plan to quickly adapt based on performance. Our proprietary methodology and analytics tools monitor all aspects of a campaign across all platforms, allowing us to let the data drive our decision-making. Guided by the deep knowledge and expertise of our channel experts, we are able to optimize strategy and tactics as necessary.
Currently, Facebook has not established a solid date for when this will all be enforced and put into action, but we know it will occur soon, so we are getting ahead of it to limit any disruptions to our clients’ campaigns. As this rolls out, products will adapt, workflows will change, and new best practices will emerge, but we will continue to work through it and aim to keep our clients updated and informed.
Concerns about consumers’ data privacy will likely spur more changes to how our data is collected. The changes from Apple’s and Facebook’s subsequent responses, we believe, are an indication that there will be more changes on the horizon from other platforms, including Google, LinkedIn, and more.
Being on the cutting edge of “what’s coming next,” anticipating and strategizing for the long term, keeping our clients’ business goals at the forefront, and achieving the best marketing performance possible on their behalf will always be our main priorities at Boathouse.