The Apple iOS Update that Facebook Hates
On Monday (April 26) Apple released its iOS 14.5 big new update for iPhones. But unlike any other updates, this one will prove to be one of the most critical ones for the digital marketing world.
I’m referring to Apple’s new privacy change, that will provide users much more transparency and control over any app that wants to track them for advertising. And of course, if there’s one app that relies heavily on tracking for its advertising revenue, that app is Facebook.
With new App Tracking Transparency feature, iPhone users will see a new pop-up asking you if you want to be tracked by allowing the app to access your unique device ID for advertising purposes. For those who didn’t know, this type of tracking has been happening all the time, except that you weren’t asked before-hand if you wanted to opt out. The obvious result of this new “opt-in” requirement is that a lot of users will end up opting out and therefore, advertisers like Facebook will lose effectiveness and profitability of their targeted ads.
But Apple is not the only one (or the first one) to make changes to the way tracking technology will work in the future. Google also announced in early 2020 that they would be joining many other browsers, most notably Safari and Firefox, in eliminating the 3rd party cookies in 2022. When Safari and Firefox announced this change to their tracking technology, most advertisers simply shrugged and moved on. After all, Google Chrome has 66% of the market share. But when Google announced that they are joining forces, the advertising world took notice.
Browsers Are Done With Cookies. What That Means for Advertisers
The way programmatic advertising works today is complicated behind the scenes but fairly simple to describe in basic terms. Marketers can now find their ideal consumers and engage with them wherever they are organically online, regardless of what website or device they’re on. Most importantly, the impact of the ads placed can be measured and help travel marketers ensure they’re spending where it counts. In simple steps:
- A consumer visits a website showing intent to purchase your product.
- When the consumer goes to a different website, algorithms immediately bid to show an ad (relevant to your product) to the consumer on that website.
- As the website loads, the ad is placed in front of that consumer with the goal of engaging and ultimately, converting them.
The above is accomplished thanks to the application of two basic tracking tools: pixels and a cookies.
A pixel is a block of code placed on the backend of an advertiser’s website to track a user’s actions as they browse. When someone leaves the website without converting (buying), that data is passed back to the advertiser (Facebook, Google, etc) so they can target them with an ad and influence them to go back and complete the purchase on the advertisers’ website.
A cookie acts more as a storage utility. It works by collecting all of the information about a user’s actions on an advertiser’s website and stores it in the user’s browser (Chrome, Safari, Firefox, etc.)
For advertisers, the connection between pixels and cookies is critical. In effect, pixels track your actions (anonymously) and cookies store that information so that advertisers can serve them more relevant ads while they are online.
A couple of clarifications:
- It’s important to note that tracking pixels are NOT going away. Only third party cookies will be eliminated from most major browsers.
- When it comes to cookies, there are two basic types: 1st party cookies and 3rd party cookies. Only the latter will be phased out.
As opposed to 3rd party cookies, 1st party cookies are the type that remember passwords and preferences to enhance the user experience (for example, remembering language preferences), track history from websites visited and collect analytical data, and are stored by the owner of the website in a database. For example, when you log into Amazon, and return later, you don’t need to log in again thanks to 1st party cookies.
3rd party cookies are served to websites by scripts or tags from a separate domain (a “third party”), they track history of online behaviors across various websites, and are often set up by ad tech vendors. This is the type of cookie that is being phased out.
What all of this means is that in the new “privacy first” world, 1st party data will be worth its weight in gold. This is great for Google, whose platforms get billions of visitors per day. In fact, the bulk of Google’s revenue comes from ads on Google Search — more than half of it, according to its most recent quarterly earnings report, and far more than it makes from its ad network that currently relies on third-party cookies. And because Google Search won’t be affected by the cookie ban, that data-based revenue stream will continue to flow. Facebook on the other hand, has a more difficult task since they rely more on third party cookies. However, they can still convince their users that saying “yes” to the privacy pop-up on their iPhone will enhance their own user experience by being able to see advertisements for the products they actually like.
And now that you’re totally confused about which cookies do what, it’s time to download iOS 14.5 to your iPhone and experience this new level of privacy for yourself.
As always, if you need any assistance with your eCommerce marketing, our MGR Team will be happy to chat with you one-on-one. Use this link to contact us and set up your free consultation.
Thank you for reading. Until next time, this is Manuel Gil del Real (MGR).
Sources: Facebook, Apple, Google