By: Tim Schmidt

Apple's iOS14 Privacy Prompt & How it Will Impact Automotive Advertising on Facebook

Any day now, Apple will begin enforcing its new privacy policy for iOS 14 iPhone users. This new policy forces any app that wants to offer their app on the Apple App Store to display a notification prompting users to opt in or opt out of device level targeting and tracking with a single tap. The interesting thing about this new policy is that in order for apps like Facebook or Instagram to utilize IDFA’s (Apple’s mobile ad identifier) users will need to actively opt in. This is an about face from how other privacy policies and regulations have worked to date, where users had to actively opt out of tracking in order for their devices to remain untracked.

The iOS 14 privacy update will undoubtedly impact the ability to target iPhone users who decide to opt out of allowing Facebook/Instagram to use their mobile identifier for targeting and tracking purposes. This will negatively impact the size of both 1st party retargeting and 3rd party behavioral audiences, but we do not know how much of an impact it will make until Apple releases the privacy prompt and users begin opting in or out.

What we do know, is that mobile users on Facebook and Instagram are skewed toward iPhone users when we look at Q1’21 data from Octane’s campaigns agency-wide. We are seeing 68% of mobile users on iPhones vs 32% on Android devices. To take the data a step further, we are seeing 90% of all impressions delivered on Facebook/Instagram to mobile devices, 7% to tablets, and 3% on desktops.

Based on this data, if 100% of iPhone users on iOS 14 decide to opt out of tracking, the potential impact could be as high as 61% reduction in 1st/3rd party audience sizes on Facebook/Instagram. If 50% of iPhone users on iOS 14 decide to opt out of tracking, the 1st/3rd party audience size reduction would be 31%. As you can see, this data illustrates how important user behavior is in this equation and predicting user behavior is much like throwing darts with a blindfold. Our guess is that roughly 70% of iPhone users will opt out, leading to a 43% reduction in 1st and 3rd party data audience sizes.

It is important to note that this reduction in audience size only pertains to 1st and 3rd party audiences. This does not stop Facebook/Instagram from advertising to these users all together, but it will make the ads those “opted out” users see in their feeds less personalized to their interests. What this means is that advertisers can still reach ALL of these users within the Facebook/Instagram apps, but will have to do so through different means. For example, advertisers will still be able to target these users based on their activity within the Facebook/Instagram apps. This includes their likes, comments, posts, groups, etc. Through testing and optimization, advertisers will be able to augment their typical retargeting and 3rd party data targeting strategies with Facebook/Instagram interest targeting.

This privacy update also impacts Facebook’s ability to track “opted out” users across their applications and pixeled websites. This means that any conversion tracking advertisers have setup on their websites via the Facebook pixel will see a reduction in the scale of website conversion tracking, and the conversion data recency. Real-time reporting will no longer be supported by Facebook, meaning data may be delayed for up to 3 days. This means conversions events will be reported based on the time the conversions occur, and not the time of the associated impressions. In addition, one of the more consequential impacts to reporting is the removal of 28-day click and view-through attribution windows, and the 7-day view-through window. Moving forward advertisers will only be able to attribute conversions for up to 7 days post click, and 1 day post impression. For industries like automotive, this will reduce the ability to attribute clicks and impressions to sales since auto shoppers are usually shopping for 30-90 days before purchase.

Although this privacy policy will impact the ability to target individual users, and track individual users who decide to opt out, we are confident the policy will not end advertising on Facebook as we know it. Will advertisers need to adjust their strategy to the changing times? Absolutely. Will all the value of advertising on Facebook/Instagram vanish overnight? Absolutely not. Just be sure you are up to speed with the changing tides and watch your data like a hawk to ensure you can adapt quickly and optimize based on the data you are seeing from your campaigns. In addition, be sure to diversify your digital strategy to ensure you don’t have all your eggs in one basket. It will be more important than ever to reach 1st and 3rd party auto shopper audiences across the web via Display, Online Video, Connected TV and Streaming Audio.