The Impact of Apple iOS 14.5 on Facebook Ad Campaigns

On April 26, 2021 Apple released an update to the recent iOS 14 software, iOS 14.5, which put an emphasis on user privacy through their App Tracking Transparency feature. Companies running Paid Social Ad campaigns on Facebook saw an impact on performance as users were opted-out by default. Instead, they now have the option to opt-in to receiving ads.

This update has been in place for some time now, giving us enough data to see the impact on Facebook Ad campaigns across our client portfolio. These insights can help marketers address this change and evolve their digital marketing strategy.

How Many Users Have App Tracking Transparency?

When we looked at data available to us across high-volume accounts, we saw 16.6% adoption of iOS 14.5 in the first 10 days after being released (April 26th – May 6th). The chart below shows how this compares to adoption rates of other iOS updates in the past.

As of July 2021, more than 64% of iOS mobile and tablet devices were operating on iOS 14.6, according to Statcounter Global Stats. This means a majority of iOS devices include the App Tracking Transparency feature.

Source: StatCounter Global Stats – iOS Version Market Share

Another key metric to monitor is the number of users who opt-in to having their personal data shared with advertisers. According to Flurry Analytics, 15% of iOS 14.5 users in the United States opted-in to ad tracking four months after the software was released—noticeably lower than the 21% of users who have opted-in worldwide.

Early Impact of Apple’s iOS 14.5 Update on Facebook Ads

Apple’s App Tracking Transparency program was a major foray into a privacy-centric marketing environment. We have only just begun to understand its impact. But one thing is clear: marketers will need to adjust their strategies and campaigns to keep up with this evolving marketplace.

When we looked at Facebook campaign performance data across high-volume accounts in 2021, we were able to dig deep into the impact of iOS 14.5 on Facebook Ad campaigns. Here are a few key findings:

Decline in Ad Impressions Makes Reaching Audiences More Expensive

More users opting out of tracking means target audiences are harder to reach, which increases acquisition costs. Total ad impressions on Facebook declined by nearly 19% from Q1 to Q2, 2021. With shrinking audience sizes, marketers will need to consolidate campaigns on the platform.

Smaller audience sizes have resulted in higher demand to reach target buyers. Companies were willing to pay a premium on audience impressions in Q2. In our dataset, the cost-per-thousand (CPM) impressions rose by a staggering 67% from Q1 to Q2 (see the monthly breakdown below). 

It will be interesting to monitor what this threshold looks like as more users opt-out of tracking. Will companies ditch Facebook and seek out advertisements on other platforms? Only time will tell.

Fewer Audience Insights Means Less Control for Marketers

Ad campaigns on Facebook can vary depending on your strategy and goals. “Conversions” can be anything from a video view, a website page visit, or a purchase. However, despite the nature of these conversions, we noticed Facebook quickly phased out audience insights like website conversions by various demographics.

The week of the iOS 14.5 update, two-thirds of weekly website conversions were grouped into an “unknown” age category. By June, 100% of website conversions through Facebook campaigns were grouped as “unknown.” In just six weeks, this valuable demographic data was stripped away.

Other demographic data was impacted, too. For instance, monthly website conversions by gender reached 100% unknown by June, 2021. The same goes for geo-location data, too.

Phasing out reporting abilities by this demographic data is a fairly significant blow to marketers who relied on Facebook for audience insights and targeting. Some say Apple created an unfair advantage with their iOS 14.5 update. Louis Belpaire goes in-depth about this topic on our podcast:

How Should Marketing Strategies Evolve After iOS 14.5?

It was inevitable. Consumers now have more power and control over their data than ever before. Not only can they seek out privacy settings, but now, they’ll be prompted to make a decision before anything is decided for them.

These changes present an opportunity for marketers using paid media campaigns to out-maneuver competitors. We are accelerating towards a more automated, less transparent experience with advertising platforms. On top of that, marketers will have smaller audience sizes to work with. This means creative needs to get better, offers need to be more enticing, and value exchanges need to be seamless.

All of this depends on how effectively companies can collect use first-party customer data in their marketing strategy. This valuable information, collected directly from customers and prospects themselves, can be used to personalize messages, target geographic locations, and inform machine learning. But it requires a thoughtful and intentional strategy.

Marketing leaders running campaigns impacted by this change should work with their marketing teams or agencies to understand the deeper impacts of smaller audiences, limited reporting, and the effectiveness of their advertising content. Or, request a digital marketing consultation with one of our experts.