We are in the midst of a digital privacy revolution as consumers are profoundly concerned with advertisers’ access to personal data. With the rollout of iOS 14.5, Apple has prioritized user privacy by restricting the tracking capabilities of all apps including Facebook and Instagram.
Specifically, users are automatically opted out of tracking which stops apps from accessing and tracking user data to create highly targeted advertising experiences. This change is expected to reduce the efficacy of ad campaigns, increase the cost of acquisition, and reduce attributed ROAS (Return On Ad Spend). While users have the opportunity to allow tracking, a study performed by Flurry Analytics indicates that around 96% of users will opt out.
Whether you’re currently struggling with your Facebook Ads account or you’re anticipating to, this article will shed some light on immediate measures your brand can take to mitigate the negative impact of this change. At the bottom of this article, we uncover two supplementary strategies for Food & Beverage companies to thrive during the transition.
Immediate action to take control of your Facebook Ad Account.
At this year’s AdWorld conference, Facebook representatives explained the direct implications of the new iOS update. We’ve summarized exactly what your business can expect in the coming weeks.
- Immediate changes to app campaigns
- Immediate changes to reporting (app and web)
- Performance fluctuations
- Audience size decrease
We understand that this is very concerning for many DTC and eCommerce businesses especially because niche audience targeting and optimizations based on user activity is central to successful ad campaigns.
While these privacy-enhancing technologies are flipping advertising on its head, we at Heart are prepared with dedicated plans to alleviate the potential backlash of the new update. The two spaces subject to rapid change in the coming weeks are audience targeting and campaign reporting, each with their own respective challenges. These four key changes to your Facebook Ad Accounts are essential to mitigate the impact of iOS 14.5.
1. Niche audience sizes and pixel-based custom audiences will decrease
Facebook advertisers can expect a significant decrease of custom remarketing audiences based on pixels that track user activity such as your website visitors or those who initiate checkout or add-to-cart events. Implementing custom audiences based on those engaged with your social media channels and shifting to broader interest-based targeting can help expand the size of your target audiences.
2. Conversion attribution is significantly more challenging
If users have opted out of tracking, Facebook Business Manager will have difficulty attributing sales or other conversions to your ads, which means your performance will go down – at least according to the Business Manager as it stands now. Facebook will soon release a tool called ‘Aggregated Event Management’ to mitigate the impact of this change. However, you can expect significantly lower attributed conversion rates until then. We recommend ensuring your Google Analytics is set up properly and you utilize data to reconcile activity on your website that will be unavailable through Facebook.
3. Each domain is now restricted to 8 pixel events
Effective immediately, your Facebook Ad Accounts will only be able to optimize for 8 pixel events due to Apple’s new update. As an advertiser, it’s crucial that your Ad Account prioritize which 8 pixel events are most important to your business and goals (Purchase, Initiate Checkout, Add-to-Cart, Subscribe, View Content, etc). Some strategies to alleviate these restrictions include creating zero-friction website funnels that require fewer tracked conversions.
4. Facebook Domain Verification is now mandatory
Due to the iOS update, a Facebook Business Manager account must be verified in order for it to have the authority to configure the 8 available conversion events. While this process was available prior to the Apple update, it is now integral to adhere to Apple’s Private Click Measurement update. You can find the exact steps to verify your domain here.
2 actionable strategies to overtake your competitors during this transition
Diversify your social presence
As organic social media performance has declined on Facebook and its partner apps, other social platforms are filling the gap in the market. While TikTok is the talk of the town, we urge you to turn your attention towards Pinterest. It is currently one of the most undervalued paid media platforms with huge ROI potential.
“85% of weekly US Pinners have made a purchase based on Pins from brands”
We are investing in Pinterest advertising because it is not going to be impacted as much from the new privacy updates. Unlike Facebook’s aggregated data, the Pinterest algorithm uses user-searched keywords to create customized feeds (so you could say, it has more in common with Google than it does Facebook or Instagram!). What sets Pinterest apart is the ability to deliver contextually relevant content. Pinners are presented with food ads as they browse for delicious lunch recipes, not when they’re reading their father-in-law’s Facebook post.
The Food and Beverage CPG industry is very successful on Pinterest. From brand awareness to conversion campaigns, we’ve helped our clients diversify their digital ad campaigns and increase their return on ad spend (ROAS). Notably, the average order value (AOV) of Pinterest sales is usually significantly higher than AOV on FB/IG. As Facebook and Instagram campaigns face potential performance dips in the coming weeks, the companies that prepare and transition accordingly have a significant advantage over the competition. We can help answer your questions whether your Facebook ad campaigns are underperforming or you’re curious about the emerging digital ad landscape.
Focus on Customer Retention
With foreseen limitations to niche targeting, conversion-based campaigns, and reporting, new customer acquisition is going to be increasingly challenging. In order to offset losses from this segment, we recommend that businesses dedicate more attention to customer retention.
The core of this strategy involves converting one-time buyers into repeat customers. Customers who are already acquainted with your value proposition require a smaller investment for further conversion. They are also more likely to recommend your brand when the opportunity arises. As finding new customers through ads will become more difficult, look to engage your current customers as a means to propagate your message and product.
One strategy to engage with your customers is to create and optimize ‘previous buyer’ custom audiences based on your privacy-complaint customer lists. While Facebook Ad Manager will significantly reduce its tracking capabilities, you will still be able to reach this core audience.
By creating a ‘previous buyer’ custom audience you will be able to deliver unique advertising experiences that build loyalty and repeat purchases. In addition, we recommend creating look-a-like audiences so Facebook can more effectively deliver ads to consumers that behave like your current customers.
The specific avenue you follow to increase customer retention is unique to your brand but we’re seeing great results by implementing supplementary marketing strategies that focus on nurturing the business-customer relationship. Feel free to ask us if loyalty, referral, and affiliate programs are right for you.
Facebook Ads are going to be less effective but this is an opportunity for alternative advertising strategies
This new iOS update is going to change the digital advertising landscape for better or worse. Nevertheless, digital advertising remains the most common and effective tool for DTC and eCommerce.
We are all gearing up for a radical paradigm shift in the world of advertising, leaving the market ripe for disruption. Those who pivot and transition effectively are going to dominate. If your marketing department needs some support with the upcoming changes, consider reaching out to us at Heart Creative for more in-depth information on how to stay ahead of the curve.
