Has your Facebook ad performance been impacted by iOS 14? Find out why it’s been so catastrophic, and why this could be a good thing in disguise.
Ask any media buyer or small business owner who runs social media ads what has happened to their Facebook ads this year, and they are unlikely to share any good news.
In fact, most brands who advertise on Facebook have seen their performance significantly impacted, and their costs skyrocket. Even Facebook themselves admit that their ads have been hit hard by iOS 14. In September, Graham Mudd, Facebook’s VP of Product Marketing said:
“We’ve heard from many of you that the impact on your advertising investment has been greater than you expected. The cost of achieving your business outcome may have increased and it’s also gotten harder to measure your campaigns on our platform.”
What did iOS 14 change?
Announced at the Apple’s Worldwide Developers Conference on June 22, 2020, iOS 14 considerably raised the bar for internet-browsing privacy. Apple’s new application tracking transparency (ATT) measures were launched with iOS update 14.5 and went live in April 2021.
The changes means that users are now required to actively opt in in order to share their device’s identifier for advertisers (IDFA). IDFA is a random identifier that Apple assigns to its products with the websites and apps that they use. Before iOS 14, users were required to actively opt out.
Academic research commissioned by Facebook and published in June 2021 concluded that the iOS 14 update was in fact “an anti-competitive strategy disguised as a privacy-protecting measure” as Apple now “prohibits non-Apple apps from using information essential to providing relevant, personalized advertising, without explicit user opt-in”.
The research pointed out that users can only opt-in after they have been shown an “ominous and misleading prompt” about tracking:
Apple’s own apps and services don’t need to display this prompt because consumers are automatically opted in to Apple’s own tracking.
According to the research:
“Apple’s policy will have the pernicious effects of enhancing the dominance of iOS among mobile operating systems and the dominance of its own apps and services within the iOS ecosystem, while reducing consumer choice and devastating the free-app ecosystem.”
iOS 14 has had a dramatic effect on social media platforms
And indeed, the changes forced by iOS 14 have had a dramatic effect on social media platforms like Facebook, and have led to challenges for companies who rely heavily on online advertising to let consumers know about their products.
The impact of iOS 14 has been shown in the earnings of social media platform Snapchat, and led to shares of its parent company Snap falling by 25% in October 2021 after it reported missing out on its earnings targets thanks to the iOS 14 changes (this was despite earning $1 billion in revenue for the first time ever).
Advertisers are paying more and jumping through more hoops
So how does IOS 14 affect Facebook ads? Brands who advertise on Facebook have notice that it’s become much more expensive since iOS 14, and many are already changing their marketing strategy, and spending their former Facebook ads budget elsewhere thanks to the IOS 14 impact on Facebook ads:
“A large portion of SDC’s marketing budget was previously spent on advertising on Facebook’s platforms, and this had a high rate of conversion into sales. Now, the company is spending at least part of those funds elsewhere.”
Advertisers who are still spending their budget on Facebook ads are now facing incomplete data, shrinking audiences, rising CPMs and a greater number of hoops to jump through, including Aggregated Event Measurement, domain verification, and shorter attribution windows.
Three reasons why the performance of Facebook ads has dropped
The three key reasons why the performance of Facebook ads has nosedived since iOS 14 are targeting, reporting and optimisation:
- Targeting: The vast majority of iOS users are opting out of tracking which means retargeting audiences are a lot smaller. Also, Lookalike audiences that are based on a data source aren’t being tracked correctly anymore, reducing the quality of the audience and ad performance.
- Reporting: Following the release of iOS 14.5, most advertisers have seen big inaccuracies in metrics like ROAS and CPA. One media buyer reported that there is now a “57% gap between sales seen on Shopify and what Facebook is reporting”.
- Optimisation: Apple now limits Facebook advertisers to eight “conversion events” per website, providing fewer data points for the algorithm to use in its optimization processes, and impacting smaller advertisers who don’t have lots of data points from large budgets.
90% of users are declining app tracking
It was always anticipated by experts that there would be a drop in app tracking after iOS 14. But the reality is far worse than predicted. Statistics show that as many as 90% of users are declining access to app tracking, making it much harder for brands to accurately attribute their campaigns on Facebook.
We discovered that money spent on Facebook ads was wasted
But even before IOS 14, there were signs that Facebook ads weren’t delivering the results that brands thought they were getting.
Back in June 2020, in response to Facebook’s repeated failure to properly address the vast proliferation of hate, more than 150 brands participated in a boycott of the platform and pulling their paid social ad spend.
We saw this boycott as the perfect opportunity to test the impact that Facebook ads were having on our clients’ sales – and the results were so shocking that we had to run the numbers several times to believe what we were seeing.
We discovered that switching off Facebook ads made NO difference to our clients’ sales (you can download a copy of the whitepaper explaining the test and results here). This means that the money they had been spending on Facebook ads was wasted.
Why losing Facebook ads could be a good thing
Facebook does say that it’s working on a solution to the problem and is feeling “optimistic”. It is apparently working on technologies that will improve data protection by processing less personal data. However it acknowledges that the development of this new technology will “take some time.”
In the meantime, it could find itself losing more and more advertisers who are frustrated by the increased red tape and costs – and those advertisers may find that once they escape the ‘last click attribution trap’, they never look back.
Because rather than paying for ads they have no real evidence are actually bringing them any extra business, they can instead build full customer lifecycle advertising campaigns that deliver industry-beating incremental results, delivering more new customers, more sales and a greater customer lifetime value.
And even if Facebook does manage to find a solution to the iOS 14 challenges, they may no longer wish to return.
If you’d like to discuss the performance of your campaigns, and how we can beat your current results, please get in touch.