New IOS tracking and what it means for marketers

If you work in marketing chances are this years IOS updates have been the most difficult obstacles to overcome in quite some time. I want to explain in simple terms what is happening and how I’ve adapted. Also the economic consequences the public doesn’t consider in the name of, so called, privacy.

Essentially, what’s happened is that consumers using Apple products now have a higher functioning option to op-out of browsing and location tracking. I believe the misconception is that there’s some random creepy guy monitoring every move you make online and that couldn’t be further from the truth. It’s all an algorithm and processes your data and categorizes you into people that should be targeted with particular ads. People like me pay platforms like Facebook/Google/Amazon/Pinterest/Bing to present my products to the most likely people to be interested in them. Since half the mobile users out there are on Apple products, those platforms ability to find and target the highest quality consumers have diminished by half. The system is under reporting the conversions we’re seeing by at least a third. The good news is that, I personally haven’t necessarily seen a huge drop in sales or ad performance, however, the data available to me that I use in order to properly tweak my campaigns is now far less accurate. This means there’s a lot more guess work going on, which is dangerous. I spend about 5 hours a week studying ad performance, experimenting with different tactics, creating A/B comparisons to see how different audiences react to different styles of content and behavioral differences by platform. If the data is a third less accurate, my targeting is that much worse. Thankfully, for now, my conversions are only slightly less than normal, but it’s growing difficult to get them better, which is always the goal. I’m sort of stuck in a stagnated conversion performance. I’m getting by for now, but I have a good reason to doubt growth in this new temporary normal.

My budget allocation by audience is split up between getting website traffic from musicians that have never heard of my brands, retargeting those consumers until they turn into customers and then retaining those customers so that they are regularly engaged and remain long term repeat buyers. There are different types of ad campaigns you can use that accomplish each one of those varying goals. Retargeting existing or past customers isn’t affected as much with this change, as I already have emails and can target them directly with email campaigns or social media. Where the delusion of potent data hurts me the most is reaching new people. In other words, growth. Historically, I’ve relied on Lookalike ads and other similar targeting tactics for this. If you’ve ever watched a podcast or have read previous industry op-eds from me, you’ve heard this before. Lookalike ads were my bread and butter for 5 years until about 60 days ago. Lookalike means the platform’s algorithm targets users that are similar or that “lookalike” other users that have purchased from you before. It’s a great way to reach folks with similar interest and behaviors of others that use your products or services. Well now that half the market can’t be tracked to your website, the source of that behavior, that the algorithm uses to determine who shares similarities, is now diluted and less accurate. Brands are then paying more per click and getting less return on their ad spend, not to mention, spending way more time trying to decipher their next move.

Marketing is a cost of production, so like taxes, companies don’t just eat that, they raise prices. This is happening at a time where suppliers are busting at the seams trying to soak up price increases. Here’s a little secret for people that only see prices on the retail level. The first stop of the supply chain raises a price, the distributor/designer/middleman soaks up that price as long as they can because they’ve marketed and designed a product within a particular pricing model that then the resellers are operating within. It’s now September 3rd. Suppliers and middlemen have been soaking up increases all year. Most of my price changes happened in the spring because the closer to the 4th quarter the harder it is to throw an increase on the resellers. The rest of the year will mostly keep the same. January is pretty much an extension of December in the goods and services economy. February 1st will be one of the largest price increases across all of the North American economy we’ve seen in literally years. The people producing can only hold on for so long. The resellers are the last entity to finally pass it on to the consumers. We can see these changes a year before they happen. That’s why we call it a supply chain.

There are multiple reasons for this increase which is actually a whole other piece so I won’t go too far into it. Gas prices, lack of employment, executive branch regulations on manufacturing, real estate market, inflation, are just the main few. It’s all happened at once. You can’t just create 6 trillion dollars out of thin air in order to buy votes and assume the fed can just fix a natural law that is macro economics. Another big cause of this, that isn’t related to the economy, is the increase of ad spend and the watering down of research data directly caused by fear of a mythical boogie man violating your privacy and Apple subsidizing said fears. Apple could not have done this at a worse time. It’s the cherry on top of a pricing disaster.

Let me ask you something…What if I told you that advertisements are going back to the old school cable TV style of casting a large net? No matter what your interests are you will be targeted by ads for personal injury lawyers, breakfast cereal, sporting events, genres of music you’ve never listened to etc. Remember those days? Now isn’t it much better to have to sit through ads for products and services you are actually interested in? What if I said, not only are we going back to a non-interest based targeting, but all your prices are going to go up on literally everything and you’re going to have to start paying monthly to use Instagram, YouTube, Facebook, Google and now your Amazon Prime fee is going up, as well? Would you prefer all of that over a computing algorithm of 1’s and 0’s accumulating personal data based on your behavior online? That’s a very subjective question, but it’s a valid question. You can either have all the free stuff you utilize, and make it easier for brands to find customers, or you can pay for all the services you currently use and still be subjected to ads for products you’d never be in the market for. The only entities that win either way are the largest corporations. It’s small businesses with lower margins and budgets that rely on the tools we use to get in front of potential interested parties.

Lastly, how have I mitigated this issue? As I’ve said before, Lookalike ads have been my go-to for several years, but now that only half my web traffic is being reported to Facebook, they are now not accurate enough to invest in. I’ve reverted back to my early advertising days of detail interest based targeting. I’ve chosen guitar manufacturers, gear magazines, job titles, pedal companies and key words like, Fingerstyle or Stratocaster. The system then targets those that engage with posts or pages that feature the above listed “interests.” As I’ve ben told by my fakebook ad rep, now that far less data is being reported you need to adjust your thinking from small potent audience (ie 1-3% lookalike – 2 million people) to a large net approach. The broader the better. The goal is to always feed the algorithm the food of mass data. The broader the better in this case. After including the interest based detailed targeting, my reach covers millions more people, which would have been a bad idea before the IOS update, but now it’s the only way. Include a large pool of people and then give the system time to narrow it down on it’s own. It may take longer to get out of the learning phase or “learning limited” as Facebook and Instagram call it, but once it does, I for one have experienced almost the same conversation level. It’s still not quite as great as the 1% lookalike of last year, but it will do for now until Facebook creates a solution. Start off with the highest you can go on your budget and once it’s out of learning, back off 20% a day until you are comfortable with your return. Remember that changing a budget more than 20% at one time will revert the campaign back to learning limited and restart your process. That means you’ll pretty much just loose all of the dollars you spent getting it out of learning. Changing anything but the media will do this so if you really want to test something out on an ad set that’s made it out of learning, it’s best to create a fresh ad set or completely new campaign to A/B results.

The official word from all the social platforms is that they are working on a solution. With rising negative public options on tracking and the op-out option, I can see where they’ll have to get a bit creative to go around some of these obstacles. They’ve known about this issue for months before the Apple update and still no solution. My guess is that it’s proven to be difficult to skirt regulations while also keeping Apple customers happy with the balance of privacy and personalized advertising. The main issue with the public is that there is a lot of ignorance about what the data is and how it increases their online experience. The irony will be seeing Apple users upset with the terrible ads being presented to them without knowing they’ve asked for this.

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